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Old 16 October 2012, 16:22   #31
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Another answer which encompasses Jim's and Paul's point's is that RIBs are quite simply really good bits of kit that last a lifetime, can be modded and are generally used at 95% of their performance envelope. That's a big ask for a vessel that has to carry people safely, live in a caustic environment and be exposed to UV and extreme temp variations as well as huge structural stresses. And is also handmade to order.
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Old 16 October 2012, 17:04   #32
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Let's face it boats are an expensive hobby !! Top of the range materials for a harsh enviroment are going to cost a lot more plus if you look at the length of time they last if looked after they're good value plus they're still worth money when you sell on!!!
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Old 16 October 2012, 17:58   #33
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If the we look after the mold properly, wax, pva the non slip -100 pulls if we are lucky by which time we would up date anyway. Luckily we have a team who realise work is scares and want to keep things going so are very careful. Break even point is around 12 hulls . Luckily Shearwater is part of Bembridge marine, the boat yard is doing well which pays for the investment in Shearwater which I hope will pay off in the long-term .It must be hard going for anyone who is just building at present ,tough times.
Hi Jim, firstly I'd like to say I love the concept/design/styling/layout of your RIBs. Though I suspect I'll never be in a position to afford such a craft, if I ever win the lottery I'll be knocking on your door.

Back to the subject in hand, I'm guessing you don't sell many such boats each year, so recovering the development cost over 12 hulls doesn't strike me as unreasonable. However, in round numbers, it suggests that the amortisation of the £100k cost of developing the molds (excluding any other costs of a new design) is around £8k for each of those first 12 hulls.

Given the fact that the Shearwater, from your own description, is aimed at the family market, I just wonder whether a collaboration with other RIB manufacturers, where you share a hull design but fit-out to suit different niches, is something you have considered (or perhaps you already do so)?

In theory, doing so would allow the development cost to be amortised over a similar timeframe, but spread over a larger number of hulls - reducing the risk to the developer(s), whilst enabling their boats to be pitched at a lower price point, which in turn could increase sales volumes, which in turn brings economies of scale and increased profits.

Okay, I know that's a lot of ifs, buts and maybes, but.... (and as I said earlier, if you're already doing this then I'll get back in my box).

PS - Just checked my Euromillions numbers
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Old 16 October 2012, 18:03   #34
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Jim has given a lot of valid points and add to that i was once told by a very well known rib manufacturer that his hulls were nearly twice the lay up of his hard boats .As a tube manufacturer i do not charge for templating new designs but hope to recover this from repeat orders and as a very small company we have to hold £150,000 of fabric stock as well as other components ,rubbing strakes are only available in large quantities 200 to 600mtrs if we want reasonable prices .lastly i would really love to see some of these huge profits that people seem to think we make
Can I just say that I have absolutely no problem with a business making a healthy profit. I just believe there are opportunities for collaborations that would provide economies of scale, leading to reduced costs which, if passed onto the customer, could in turn lead to increased sales.
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Old 16 October 2012, 18:37   #35
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Can I just say that I have absolutely no problem with a business making a healthy profit. I just believe there are opportunities for collaborations that would provide economies of scale, leading to reduced costs which, if passed onto the customer, could in turn lead to increased sales.
But what you’re suggesting would lead to a higher output of a lesser standard for the same profit. What small business would want to do more work for the same money? I think that sort of thing is best left to the Chinese.
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Old 16 October 2012, 18:49   #36
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Can I just say that I have absolutely no problem with a business making a healthy profit. I just believe there are opportunities for collaborations that would provide economies of scale, leading to reduced costs which, if passed onto the customer, could in turn lead to increased sales.
for a relatively low demand product like a rib that won't work like that.

lets imagine a RIB costs: 5 k for materials and labour to laminate the hull etc, 5 k for tubes and console etc, 10 k for an engine, fuel tank, rigging etc, 1 k for a trailer, 2k for electronics or other rigging, 8k for "my" share of the design and development cost, 5k for overheads, 3k for "my" share of the marketing cost. + a tiny bit of "profit" + 20% vat = £50k

Now imagine that you could double the level of sales.

- the build costs is the same, the engine is the same, etc
- I'd half the amount amortised for design.
- my marketing costs probably don't go down significantly "per boat".

So I might be able to make the boat 10% cheaper by selling twice as many? I very much doubt that a rib maker can sell that much more with a small price differential.
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Old 17 October 2012, 03:10   #37
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But what you’re suggesting would lead to a higher output of a lesser standard for the same profit. What small business would want to do more work for the same money? I think that sort of thing is best left to the Chinese.
Exactly where did I say anything about lowering the standard, and if you sell 10 ribs per year at a £15k per unit profit or 15 ribs at a £12k per unit profit I know which I'd rather do!
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Old 17 October 2012, 03:20   #38
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for a relatively low demand product like a rib that won't work like that.

lets imagine a RIB costs: 5 k for materials and labour to laminate the hull etc, 5 k for tubes and console etc, 10 k for an engine, fuel tank, rigging etc, 1 k for a trailer, 2k for electronics or other rigging, 8k for "my" share of the design and development cost, 5k for overheads, 3k for "my" share of the marketing cost. + a tiny bit of "profit" + 20% vat = £50k

Now imagine that you could double the level of sales.

- the build costs is the same, the engine is the same, etc
- I'd half the amount amortised for design.
- my marketing costs probably don't go down significantly "per boat".

So I might be able to make the boat 10% cheaper by selling twice as many? I very much doubt that a rib maker can sell that much more with a small price differential.
If the build costs are the same then sack the buyer. As I said, economies of scale. If you buy more resin and mat it will be cheaper. If you're buying more engines you should be negotiating a better discount (or collaborating with other boat builders to negotiate a better 'collective' deal). I'm not suggesting such changes will suddenly double the number of overall rib sales, but it may just win Jim orders for Shearwaters that might otherwise have gone elsewhere.
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Old 17 October 2012, 03:31   #39
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It is common practice for car manufacturers to share platforms, for example the Porsche Cayenne, Vokswagon Toeurag and the Audi all share the same floorpan and some mechanical parts. The baby Toyota, Peugot and Citroen do the same. I believe one of the Jaguars used a Ford Mondeo floorpan and probably one of the Aston Martins.
Difference is the volumes.

I wouldn't have thought it was a big enough marketplace to justify the savings, plus you will be competing with your partners for the sales, which will probably mean cutting the margins to be competitive.

It might make sense to join forces with your rivals to bulk buy the expensive stuff such as outboards to get the prices down?
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Old 17 October 2012, 03:44   #40
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If the build costs are the same then sack the buyer. As I said, economies of scale. If you buy more resin and mat it will be cheaper.
resin an matt are commodity products. Yes they will get cheaper if you buy more, but not significantly so if you buy double the quantity. On my hypothetical numbers above probably 5% of the build cost is resin/matt. If you can save 10% on buying material in bigger quantity that means the whole boat could be 0.5% cheaper...
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If you're buying more engines you should be negotiating a better discount
but buyers don't like to be forced to buy the engine dealer you partner with and even if they do if you think 5-10 extra engines a year for a main outboard dealer will get you a very different deal you are in cloud cookoo land. The only way they'd give you any meaningful extra discount is if at the start of the year you could guarantee to take certain models - which of course you can't because until you get the sales and agree the exact specs with the customer you don't know...
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(or collaborating with other boat builders to negotiate a better 'collective' deal).
His prices can only 'appear' cheap if he is getting deals other people don't. Just reducing the prices for everyone doesn't help individual dealers - the majority of people who have 40k rather than 50 to spend on a boat are still going to buy a boat anyway just a bit smaller. So in fact it doesn't even grow the total market.

Quote:
I'm not suggesting such changes will suddenly double the number of overall rib sales, but it may just win Jim orders for Shearwaters that might otherwise have gone elsewhere.
even worse, he'd be reduced his prices in the hope of attracting new customers and if that doesn't happen he gains none of the 'savings' and probably goes the way of many a british rib builder who tried to sell to cheap...
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