Shopsmith's new website is up....

[HopefulSSer]

Typo! Yes $950k :-D

[DLB]

If it were the case that there were only two options, being:
1. Higher prices but SS survives and is able to continue supplying new machines and to support older ones, or
2. Shopsmith ceases operations

...which would you prefer?

Before answering, I would ask: how much higher prices? But I don't think those are the only two options, or even that they are both options. Not too long ago there was some optimism involving engineering and/or marketing that would bring new customers into the fold. Fifty plus years ago this was the strategy that Shopsmith Inc. used to breath new life into the Mark 5 line that had been dormant for several years, and they were incredibly successful. They did, of course, eventually fail and we have extremely limited insight into the causes for that, but I think that the focus we saw under RLF suggests it didn't have a lot to do with the Mark V/7 line, because that became the primary focus for the next decade or so. I spend money at Shopsmith and am happy to do so, but higher prices will result in me spending less, not more. Engineering resulting in improvements and upgrades, and perhaps new products, are what will entice me to spend more.

- David

[HopefulSSer]

Before answering, I would ask: how much higher prices?

If it is the case that I posited in my hypothetical, then high enough that SS survives & grows. Obviously that means they can't be too high, else SS would not survive & grow. ;-)

[dusty]

Typo! Yes $950k :-D

I do not know. where this $950,000 figure came from and I seriously doubt that it is a real ticket price.

Someone, if you can, prove me wrong.

[adrianpglover]

@dusty - All I could find is that @jpg mentioned the number earlier in the thread. I assumed it came from some interview with the new owner, but I can't find a reference to it anywhere. Hopefully JPG can let us know where the number came from.

For my view, I wouldn't put most price increases in the Shopsmith line of products to be due to inflation, but rather that a new owner is looking through the books and adjusting prices to reflect a minimum of 15% profit (pretty standard profit on products) once all costs for manufacturing and storage of the product are taken into account. I also take the view that Shopsmith has been/is possibly circling the drain, in that the only new engineered product that I've seen in the last decade or so of me looking at the company every once in a while, which led to my eventual purchase in early 2020, is the introduction of the touchscreen interface to the MK7. And, to heap more on, that touch screen interface doesn't seem to add any functionality to the headstock. It's not like it makes the tool cut in a new and innovative way. It is just a different HMI, which was likely designed due to upcoming part obsolescence since the other MK7 interface was introduced in 2010, some 14 years ago.

We do need to face reality though - woodworking is a hobby that fewer and fewer people are picking up (on the decades long timeframe). I imagine a lot of people who purchased the MKV in the '80s and prior would have done so in an effort to do some projects for DIY home improvement and not have it take up a lot of space, as many other tools available at the time were rather large. Jump to modern day, i think a lot of DIYers will just order something already manufactured overseas and put that in their house. What I'm trying to say with my horrible attempt here is that I think there is a large consumer segment that stopped buying larger power tools like what SS offers that exited the marketplace due to inexpensive goods entering the market. I also think the availability of products through online vendors has opened people up to a much larger selection, and that may have played into this. Then there's also the availability of used parts and whole tools. Since the new tools haven't changed much and the old tools are still supported, the cheapest route is to buy used, then buy a few upgrades to get you to the point you want to work at. This is interesting from the viewpoint of the consumer, but for SS this means lower sales volume. In fact, look at what we were discussing on my thread about my tool rest arm being cracked - I mentioned that I'd like the UTR, but don't have the budget for it as I'm just getting into turning and not sure I'll keep it up, so the options that were offered to me were to purchase a used part off of ebay, rather than spend more for the part from SS. I don't fault anyone for this logic, but rather highlight it to show what the pricing of new from SS has done compared to the availability of used parts.

I do hope that SS can find a way to reduce their costs though. I don't view the company as a highly innovative one (though I do understand when you are in an industry where there isn't much to innovate). I mean, what we used to call a MKV 520, the 520S with all of the packages on it, is now $4,199 + freight + tax, and the MK7 is $5,245 + freight + tax. That's a pretty high entry price, vs craigslist adds frequently for $1k.

[RFGuy]

I want Shopsmith to succeed and continue operations, but of course I also want to afford repair parts, accessories, etc. I gave up on affording a PP quite a while back. I do wish them well, but my relationship with them is complicated. I loved my Shopsmith equipment for decades, but also over this time some of the aspects of it that I hate (annoyances and things that should be easier, higher quality, etc.) have grown. I still find more positives than negatives with the equipment which is why I still use it, I still come here to learn from other forum members and maybe occasionally share what I know. Tack on some rather difficult experiences with customer service and shipping snafus (their fault) over the past few years that I have had so I don't hold the company in as high of a regard as others on this forum. I can't apologize for this, because my experience is real and I choose to share it here so that it might help others.

So, I naively thought that Shopsmith manufactured everything, or almost everything, that they sold for a long time. Then I bought a speed reducer a few years ago. Shopsmith kept delaying the delivery date over and over and over again. It was over 6 months before I finally received my new in the box speed reducer from Shopsmith. Over the course of many phone calls talking to customer service, I learned that that particular product was manufactured by a small machine shop...really small because I was told it was a guy working out of his garage making them on his mill. He had been doing it for years so presumably was getting up there in age and they seemed to indicate they weren't sure how much longer he would do this for them. I can't say if 100% of it was manufactured by him or just the internals, but this is why it took over 6 months to receive mine. Also, the impression that I got from customer service at that time was order placement does not mean manufacturing start, i.e. I think they accumulate orders over a period of time to get up to enough quantity for a batch order. They then place that order with their supplier (man in his garage for speed reducer) and secure the best price they can for that quantity of parts. I don't know how many other parts that Shopsmith sells follow this and how much is manufactured on-site at Shopsmith, or just assembled there, etc.

Given all of the above, I hope you can now see why I bring up whether it is a supplier cost increase (perhaps new supplier now), a new owner cost increase to justify operational costs, etc., or the nebulous inflation and price increasing in the world answer. I have leaned on the inflation answer too in the past on other threads - perhaps too often. That is why I was trying to dive deeper into this to expose the truth behind why several parts are increasing in costs at Shopsmith. Inflation, which is the rate of price increase on an aggregate group of products, is getting back to "normal" which is around 2-3%. Since it had ticked up and peaked at around June 2022, it is now retreating back to normal, which means many prices that had inflated are now deflating - otherwise the inflation rate would not be returning to normal as it is an aggregate of many product prices. For sure, some product prices have NOT returned to normal, which is why I was trying to deduce how much of a price increase might be considered normal for Shopsmith assuming inflationary pressures from their suppliers. Not going to rehash all of that again, but simply say I don't think these large price increases from Shopsmith are directly related to inflation. I do think it is a combination of a) their suppliers charging more now since Shopsmith L.P. is a new corporate entity and b) new owner charging more to keep the lights on and/or fund new development. The latter may be wishful thinking, but I too find it difficult to consider new purchases from Shopsmith as 20-33% increases are difficult to swallow or afford.

[JPG]

I do not recall the specific thread, but a post by RFGUY revealed the investment offering by Nick that amounted to $1,000,000 with $50,00 being his fee. What we do not know is if that transferred ALL SS assets or not.

[dusty]

Just how much financial detail are we entitled to anyway. We are not investors. We are, at best, noisy members of an open forum paid for by Mr. Cupps.

[adrianpglover]

Inflation, which is the rate of price increase on an aggregate group of products, is getting back to "normal" which is around 2-3%. Since it had ticked up and peaked at around June 2022, it is now retreating back to normal, which means many prices that had inflated are now deflating - otherwise the inflation rate would not be returning to normal as it is an aggregate of many product prices.

The first part of what you posted here is true. The latter part, saying that at an inflation rate of 2-3% means that prices are going back down, hence deflation, is not correct. Deflation means that the "inflation rate" is actually negative, i.e. <0%. Since rates are at 2-3%, this means that the aggregate group of products and services is still going up in price, but just at a rate that the Fed uses as their general target.

The reason they want this at a target is if we dip into deflation, then consumers may take on the mindset that since costs are coming down, they'll delay buying that car, home appliance, or other item that doesn't have to be replaced right away until a later date when the product is cheaper. If consumers take on this mindset and we're already in a deflationary period, then this would compound the deflation and make it speed up. The Fed has thus decided that a small, positive inflation rate is deemed as good, as it keeps some guardbanding away from the deflationary runaway effect.

[edma194]

I do not recall the specific thread, but a post by RFGUY revealed the investment offering by Nick that amounted to $1,000,000 with $50,00 being his fee. What we do not know is if that transferred ALL SS assets or not.

Wasn't that his proffer to raise capital for the company? I do recall the 950K number coming up somewhere else though, although perhaps it was just getting passed on through a game of telephone.