Bubble Magus Pricing

[DiverDude]

This is classic.

A company (Buble-Magus in this case) develops a product and make it available for sale. After a while, customers are finding this to be a good thing at a damn good price. Word spreads throughout the community. At this point, product is being sold direct, on eBay, whatever it takes. Reputation is still below the radar though and most companies won't stock it.

Pretty soon, demand rises to a point where Bubble Magus realizes that they are losing out because their distribution isn't effective.

Around now, businesses are being asked for the product by the public and realize they can move units. Bubble-Magus is suddenly the hot, loose chick at the dance !

Now the problem becomes how to get rid of all the channels they had before the distributors came online.

Nothing new here; we're just watching the beginnings of a new company entering the market and we're seeing a few of the ugly truths of a market economy along the way. Most of us would be disgusted to learn how little it costs to make many of the products we buy every day but there's manufacturing costs, employee costs, insurance, distribution, warehousing, marketing, blah, blah, blah.

Of course, the guy at the LFS has to make some money on it too -and you should be happy that he does because if he didn't there wouldn't BE a LFS for you to run to when you needed it.

As a consumer, I always look for the best deal I can but I don't feel it's fair to berate businesses for working the system and trying to make a buck. Shop around; competition is good and makes sure that prices aren't inflated. In the end, speak with your wallet. If you can find something somewhere else for less and you're willing to wait , ship, etc. then go for it.

[imisky]

I always find these types of threads funny

There has been some pretty good points brought out on both sides, both by Michael and Ron/hobbyists.

Having worked as an distributor for ADA i can say that importing duties/ taxes/shipping price DOES take a big bite out of the profit of a distributor if they buy small quantities but when the amount gets near $10,000+ range most manufacture are willing to work out a deal with the distributor to cover a portion of the shipping cost so what it comes down to is the duties which isnt all that much..maybe a few %.

I wont give out the actual total of the shipping cost but i can say my purchases with ADA was under $1000 shipped to get a large quantity of products in which weighs 100-200 times (40lb bags) more than that of any skimmer/acrylic product but that doesnt apply as much since BM products going to Michael are in containers.

There are usually a fair amount of restrictions giving to a distributor on how they can sell there a product, in the case of ADA they had restricted no selling in the home country of ADA, pricing has to be higher or equal to that of home country distributors but in the case of ADA distribution we did not have an MAP but a MSRP.

Now i have to say a few things about Michael's list of few things he left with us.

1. The MAP price is set by Bubble magus, ALL distributors put on the table what they feel is correct based on market conditions and BM set the MAP from there taking all costs and market influences into consideration. So if you are unhappy with it contact them, we simply put our costs and proposals down and BM thumped the numbers from there based on everyones input.

I have never seen a manufacture ask the distributors for a suggested MAP pricing, but this might be the case with BM as they are trying to break into mainstream supply . What doesnt make sense to me is why BM is willing to cut out home country supplies just so they can break into mainstream distribution with a enough distributors to count on both hands, and that leaves me with 1 question, what happens to all those units that was sold in China, how do they get warranties?

2. BM is a high grade range, but they made an early mistake in marketing by selling it to anyone at factory prices. This in the short term has created threads just like this as "everyones" expectations were set so price point low. This will take time to reverse but it will do.

I am not quite sure if that is a 100% true argument, i mean BM quality is definitely good, but i wouldn't put it in the category of high grade yet. But them stepping into Eheims and Aquabees is definitely a start to the change of quality of product. No one in this hobby expects cheap products anymore...we all expect the next skimmer to come out to have a hefty price tag. All that BM did was offer a product that we hobbyists thought was in the right price range, and for the first time...the product was not crap.

3. The product is selling like crazy we cant keep it in stock, same as the other distributors, so does that mean we, BM, other distributors around the world got the price wrong?

Same reason as stated above.

4. For the product to have a legitimate right in this maket it needs correct pricing and fair pricing based on current market trends and client expectations.

The biggest question is, how do you determine correct pricing, what manufacture set? or what hobbyists perceive as fair in terms of quality/service and etc.