Ron,
This is quite simple if you wish to understand how distribution works and why manunfacturers wish to use distributors
yes i agree 100% getting a distributor involved increases the product price, But by doing so you give a genuinely good product a market available to the many not just the few that wish to shoot their luck with sending some $$ over to China and hope they get something back in a useable state.
Ok onto prices.
Originally BM were selling to anyone at their factory price, no hiding this fact, but also this created the issue they have now moving into main stream marketing. basically you could (minus duties taxes and shipping) prior to February this year get a BM for cost price, wahoo
BUT their market was restricted to only those willing to buy oversees, they had zero marketing and no country based product support.
So for the company to establish itself it needed to create a distribution base, this means distribution margins and retailer margins, and this brings me onto two points
Why have a distributor - this is wholly down to two reasons 1. Very few small stores wish to purchase in the numbers that a factory demand so by not having a distributor again the product becomes market restrictive to the masses. and 2. support, a client wants to know they can get fast easy access to resolutions when things do not go overly well.
So pricing. Well you know roughly what the product costs us
shipping for a $10,000 order cost approx by sea freight $1500 so here immediatly is 15% across the product range. This is how all distributors work out shipping costs.
You then have taxes duties and disbusements, this can range from 0% to 6% depending on how customs view the shipment when it lands, basically this depends on how many entery lines they wish to charge us for.
So what is my margin - about 20%! shock horror wow, ok now sit back a slurp that beer and think, thats Gross margin, many dealers want free shipping then there is packing costs, advertising, cost of spare parts for warranty, no the factories do not offer these for free, then there is shipping losses, always happens with sea freight especially, no factory replaces those losses, so taking all that into account we may be lucky and see EEK 10-12%
Dealer margin - dealers have huge expenses to offer you a funky store front to go a browse on saturday afternoon they also have to offer from time to time things like free shipping to stay competitive just because mr cheap skate wants to shop for a deal and drag the poor dealers margin down further, did he not realise the guy behind the counter does not live on bread and water?
Dealer margins for any product run gross between 25% to 40% did you know other skimmers have margins of 50% plus!!
Yes i am sure you will rip this apart somehow but lets just sit back and look at reality. yes we all like the concept of Walmart pricing, but for a manufacturer to have any chance of mainstream supply they have to have retailers and distributors making sure the product is out there for all not just for the few willing to use their paypal account and send some dosh across to China.
Look at the big picture for the company making the unit not just your own need for cheap as possible irrelevant of effects. And yes prices went all over the place for sometime while real costs were worked out. Now they are set and set to stay.