chlorox If niche were to offer ssp burr option, they should also bring into consideration the cost that is saved from not using the 151B burrs in calculating the eventual price. That would bring the duo into competitive contention for the customers wanting the ssp option as they are comparing it against such other grinders like the df83V.
Maybe. But the saving might not be as big as you think. A lot would depend on how much, if at all, their totalsales grew.
Think of it this way. In order to be confident in supplying, and then warranting, any 3rd party component, theyre going to want to do a pretty comprehensive sets of tests to ensure it’ll work, and not cause issues. And that costs. They have already incurred that costs for the current burrs, and every grinder sold is going to reflect a portion of that, and all other development costs.
Now assume they offer a new burr option. They can hardly charge existing ‘standard’ buyers for part of tge cost of that testing, so it’s all gong to reflect in the price of that extra burr set. How many of that model will they sell? Will any sales of that option be at the cost of not sellig a standard version they otherwise might have? If so, the proportion of the cost of testing existing burrs is going to be distributed across a smaller number of sales of the older burr versions.
And, of course, every extra SKU they offer comes with increased administratve costs, stockholding csts, etc.
It would need a good accountant, access to their manufacturing costings and a pretty good forecast both of sales of the new burr models, and any reduction in sales of the old ones, to be sure what adding that option will cost.
The result might, depending on those numbers, not result in much cost savings at all. It certainly isn’t as simple as deducting the cost of the previous burr sets fro the cost of the new ones, because other costs are involved.
It may also be that their estimates of any growth in sales from that strategy just don’t justify investing thetime in doing it. We can certainly assume that anything we see appear at retail as a product is likely to have been in development for a year or two, and that the things they’re spending their days doing right now will appear in a year or two …. if they carry on doing them. But they’re a pretty small team from what I can tell, and if crittical design or engineering staff divert to do testing on new burrs, they aren’t spending those hours/days on whatever prodducts they were developing.
It’s known as opportunity cost. Think of your own time - if you’re self-employed and decide to spend an hour washing your car, the opportunity cost is that you can’t spend that hour doing chargeable work for a client.
Friends that have never run ther own business often used to ask me things like “You’ve got all those printers and the skills, why do you pay an artist to produce <insert choice> artwork? You could do it yourself.”
And yes, I could, but if I’m charging £100/hour for my time, and paying the artist £25/hour for theirs, I can pay for 4 hours of their time by working one hour at what I’m good at. In my case, it’s probably worse even that that, because while I could do that artistic work, theprofesional artist will probably do it in a half or less the time it would take me. That’s opportunity cost, and at least a version of that applies to Niche - if engineers spend a week doing job B, testing other burrs, it’s a week they didn’t spend doing job A, and a week of delay in getting job A ready for market. That week of delay in Job A might bite further, if outside msnufactring contractors are waiting for an order, have a slot booked dand they miss the deadline because of working on Job B. It can all get very convoluted, which is to say, looking in from the outside, we have no idea how much cost would be saved by removing the original burr option. But probably not as much as you might first think.
