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Author Topic: Amplifier Price Wars  (Read 73902 times)
W6GX
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« Reply #45 on: August 12, 2014, 01:32:33 PM »

From my business school days....if you have to heavily discount your regular prices then your 'regular' prices are too high to begin with.

73,
Jonathan W6GX
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KM4AH
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« Reply #46 on: August 12, 2014, 02:07:56 PM »

I didn't go to business school, but I sold about $10 million dollars per year of electrical stuff for about 25 years . Price is dictated by competition more than anything else. If you have something unique that can bring in substantial profit it won't last long.
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K2GWK
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« Reply #47 on: August 14, 2014, 01:32:09 PM »

I didn't go to business school, but I sold about $10 million dollars per year of electrical stuff for about 25 years . Price is dictated by competition more than anything else. If you have something unique that can bring in substantial profit it won't last long.

Truer words can not be spoken. After being in sales and marketing of RF and Microwave test equipment for HP, Tektronix and Rohde & Schwarz for the past 30 years, I can tell you with the utmost confidence that nothing brings a price down faster than competition.
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Guy
Lawn Guyland, New York

K2GWK Website
N6PSE
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« Reply #48 on: August 15, 2014, 11:03:44 AM »

RF Concepts joined the fray, slashing prices significantly on their Alpha 9500 and 8410 amplifiers.

The 9500 has been reduced from $8,750 down to $6,995 and the 8410 model has been reduced from $5,750 down to $4,995!

Its a fantastic time to be in the market for an amplifier.
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KD8MJR
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« Reply #49 on: August 15, 2014, 01:06:27 PM »

So does anyone have any theories as to what is going on?
I know these retailers don't make that much profit on the amps, so the prices are also being cut by the manufactures themselves. Is this a sell off of a product line or does someone smell blood in the water and is lowering their price to kill a competitor or is it just a dwindling company doing a liquidation?
« Last Edit: August 15, 2014, 02:06:30 PM by KD8MJR » Logged

“A lie can travel half way around the world while the truth is putting on its shoes.”  (Mark Twain)
K3VAT
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« Reply #50 on: August 15, 2014, 02:08:07 PM »

So does anyone have any theories as to what is going on? ...

that's an easy one!
...  that nothing brings a price down faster than competition.


I know these retailers don't make that much profit on the amps ...

How do you know that?  Privy to financial statements?  Unless one has first-hand knowledge, anything else is speculation.

K3VAT
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KD8MJR
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« Reply #51 on: August 15, 2014, 03:18:48 PM »

How do you know that?  Privy to financial statements?  Unless one has first-hand knowledge, anything else is speculation.
K3VAT

Yes, I had a fairly extensive conversation with one of the store managers and he told me that the margins are very slim on the expensive amplifiers and Transceivers.  He said he would rather sell 3 of the cheaper units than one of the expensive ones because he makes a lot more on the cheaper units.  At the time I was talking to him about the TS-990 and the THP 2500fx and how well they were selling.  He sounded completely unexcited about any of the high end products, I remember him saying "I would have preferred Kenwood had come out with another 590 type model instead of the TS-990".

Was all the profit talk true, I have no idea but from what I remember I think Array solutions dropped the THP line because they could not sell them at as low a profit as HRO.  Thats seems to also backup the low profits on high end amplifiers story.
« Last Edit: August 15, 2014, 03:28:32 PM by KD8MJR » Logged

“A lie can travel half way around the world while the truth is putting on its shoes.”  (Mark Twain)
K7JQ
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« Reply #52 on: August 16, 2014, 05:30:03 AM »

Having been in the retail industry for 40 years, in my opinion, it seems fairly obvious that Alpha is simply reacting to their main competitor, Acom. Alpha 9500 vs Acom 2000. Alpha 8410 vs Acom 1500. For similar features, the price gap between the two companies was just too great. I'm sure Alpha was feeling the pinch when Acom added HRO, and reduced their prices earlier this year. It is a fact, though, that profit margins at retail are very slim on the main equipment...transceivers, amps, computers, etc. Main profit generators are the accessories and peripherals that add on to and support the big stuff.
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W6GX
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« Reply #53 on: August 16, 2014, 06:00:27 AM »

And the volume of sales on the high-end equipment is significantly lower than lower-priced items.  So it could be very true that the overall profit on the TS-990 is higher than the TS-590 for both the retailer and Kenwood.  OTOH manufactures need to have high-end products to create the 'halo' effect across their product line.  A good example of the 'halo' effect is the Acura NSX.  Not many were sold but it gave Acura the brand recognition it needed.

73,
Jonathan W6GX
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KC7MF
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« Reply #54 on: August 24, 2014, 06:41:12 PM »

It is a bit comical listening to folks overjoyed that a $9000.00 amp is now a mere $7000.00.  There are one or two hams out there still rolling on the floor. 

Any of these companies have to contend with the fact that their market for high-end products is shrinking.  As real incomes fall and most particularly as retirement incomes fall they will have to reassess their business strategies.  Boomers and Gen X, in just about every study, will not have anything like the income numbers of current retirees many of whom still get that archaic thing called a "company retirement".

Rolex still sells watches, Bentley still sells cars and Alpha still sells amps.  Just not to anyone most people know.
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W3DBB
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« Reply #55 on: August 25, 2014, 04:39:21 AM »

In this area it seems there is less equipment being purchased in any price range, new or used, than there was in the past. My opinion is based on monitoring two meters and 75/40 to some extent. I'm located between the state capital and the state university's main campus. My take is the price cuts are due to a lack of demand for these products. Could be a bunch of reasons for this: stagnating incomes, soaring expenses, lack of interest in amateur radio among current licensees, silent keys, a demographic shift away from hobbies like ham radio, antenna restrictions. In my case I can't think of a single piece of ham gear, even a length of coax, I will purchase in the near future. As far as I'm concerned the market is saturated. I'm surprised manufacturers have been able to defend their price points for as long as they have. The future is not going to be kind to the amateur radio industry. Welcome to the "new normal". 
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W3RSW
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« Reply #56 on: August 25, 2014, 05:54:59 AM »

Yes, the "New Normal," apologia newspeak from the house organs.

"So Help Me Golf" ..saw that on Drudge, tm. Y'day.
Hence a derivative, "In Golf We Trust."

I have few original thoughts anymore, actually never did, but what few I have are rapidly converging on an explanation if the posited decline in luxury goods is an indication.  --  And for you physics aficianados out there, the wave front is collapsing into solution, one only from  the previous infinite number of possibilities. -Intentional decline of a 200 year old experiment in true democracy.

Back down a little here, ..heh, heh.
Alpha now has a fire on both ends, Competition on amplifiers and as yet a very expensive antenna tuner not yet brought to market that by definition is aimed at hams who must have the highest power for the least amount of effort.  Believe it or not many of us yearn for such but long ago, say jr. High, realized that there is a law of diminishing returns. We just didn't have a fancy name for it.  "Good things come in moderation."

Even so, there will be very happy hams when the Alpha tuner comes out.  I envy them (not gonna pretend that having the best bike on the block is beneath me) but accept that most of us have other priorities and are still glad that there are motivated, enterprising individuals and outfits out there willing to invent, design and build the best.  I wish them well.

For those who paid more that current price, everything's a gamble along that line. You still have a fine amplifier or wattmeter.  Your resell value won't drop much if at all because many wish for  Alphas and then pick them up later, even decades later because of the build quality.  Acom learned well when building for Alpha.

The recent price drop shouldn't have been much of a shock. Alpha had another big price reduction a few years ago; they've also had several incentive sales where spare tubes were included, etc.  They're carrying parts for older models and other neat stuff that's mentioned before on this site several times.
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Rick, W3RSW
N3QE
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« Reply #57 on: August 25, 2014, 06:36:44 AM »

In this area it seems there is less equipment being purchased in any price range, new or used, than there was in the past.

Almost every CW operator now has a K3, a rig that was brand new just 5 years ago. Many have more than one K3. I have observed this adoption and now near-ubiquity over the past 5 years. It is truly ubiquitous. We might lament that this is a only a small and narrow market, but the way that it has been adopted en masse all around the world, is just amazing.

Don't get me wrong, there are others that now sell very similar high performance radios at a similar price point, but they are very much the followers, not the leader here.

The future is not going to be kind to the amateur radio industry.

The future is going to be very kind to the companies that innovate and sell great radios without regard to historical marketing strategies and artificial market segmentation.

Incidentally, if I take the inflation calculator, plug in today's price of a K3, and convert to 1970 dollars, I get a number very similar to the price of a Heath HW-100 back then. That is astonishing. Such huge progress in affordability of superior radios.
« Last Edit: August 25, 2014, 06:46:14 AM by N3QE » Logged
W8JX
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« Reply #58 on: August 25, 2014, 08:35:14 AM »

It is a bit comical listening to folks overjoyed that a $9000.00 amp is now a mere $7000.00. 

This is a hint of how much excessive fat/profit there is in those amps. I have little doubt they could go lower and still be profitable but not to the excessive amounts their used to.
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--------------------------------------
Ham since 1969....  Old School 20wpm REAL Extra Class..
KM4AH
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« Reply #59 on: August 25, 2014, 10:47:35 AM »

 I have no way to find out since it is not publically traded, but I would bet that RF Concepts net corporate profit is less than 5%. And, I think the odds are no better than 50/50 that they will be here 5 or 10 years down the road.
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