hotchkis suffering from economy

[bowtiemonster]

Just found out that Hotchkis has laid off 3/4 of their workers. and is very close to closing. anyone else heard of this?

[73Nova]

Re: hotchkis suffering from economy

This wouldnt suprise me. It Is unfortunate though. Truth be told for me, if the economy goes and Im worried about my job, the last thing im doing is speding money on a really expensive toy.

[tiresmoke!]

Re: hotchkis suffering from economy

No kidding?

good grief.....well........kinda expected some of the players in the aftermarket industry to take a hit, but wholesale slaughter is another.

Got my fingers crossed to the point of them cramping, folks.......damn it, I hope they can hang on.

[SpiderGearsMan]

Re: hotchkis suffering from economy

join the club

[TC]

Re: hotchkis suffering from economy

Just found out that Hotchkis has laid off 3/4 of their workers. and is very close to closing. anyone else heard of this?

I can see this happening. Hotchkis stuff is expensive, and in an economy where people are watching what they are spending, their more apt to buy cheaper suspension stuff over the high priced Hotchkis stuff. Which is going to be the same for a lot of companies, as it seems performance companies have the mind set of making as much money off of one person than trying to make a few bucks off a bunch of people. Good example is Procharger, their kits are like 6 grand for my car, and I will never buy one, but if they were to drop the price to 2 grand I'd more than likely buy it, plus it would make it more affordable to everyone else so they would sell more of them.

In my experiences in business, the guys that try to make all the money off of one person, usually end up out of business.

[tiresmoke!]

Re: hotchkis suffering from economy

You know, SpeedJunkee and I were discussing this topic the other day....

He's had a few small businesses, and they were successful(until he decided to do something different).....his whole thing was VOLUME(his last deal was a flea market operation...don't laugh...dude could sell oil to the Arabs).

He could pick up products cheaply, and would in turn, sell at a much lower price than the competition......

Pricing speed/suspension/whatever parts where the average enthusiast can actually AFFORD them.....will make up any potential shortfall by VOLUME......

[Shawn Anderson]

Re: hotchkis suffering from economy

I think on most of things (like supercharger) have a great deal of time in development, and manufacturing cost in them. I would be surprised if they made more than 10-15%profit. I will also say I bought a procharger kit and yeah it cost as much as most cars I have ever built but going fast is not cheap, every thing fit and was included. If they made a that cost less it would have to be made overseas and probably not fit as well or be of the quality. I will always take quality over price on my hot rod parts, just hope the quality company's survive

[Brad54]

Re: hotchkis suffering from economy

If you've ever been to business school, there is a formula for pricing your widget. It's a graph, and it takes into account the number of units and cost per unit, and tells how many you need to sell to make X profit. There is a point where selling more for the same net profit is just dumb.

Plus, you have to figure in the cost of warehousing it, shipping it, paying the people that pick it up off the shelf and put it on the truck, etc.

So to just say "They should sell more of them cheaper" doesn't make much sense--they'll have more of them sitting on the warehouse shelf, they'll have to pay more guys to put them on the shelf, they'll have more wear on their fork trucks, they'll have more invested in boxes, packing tape, printing instructions, etc. etc. Not to mention inventory taxes.

Now, it's a bit different when you're talking about a company that manufactures and sells their product, versus a middle-man reseller (such as YearOne, Classic Industries, etc.). But there's a math formula for that, too.

Whether the companies are run by people who actually went to business school and know what the hell they're doing, or if they just threw a dart at a board or pulled a profit margin number out of their ass also affects companies.

-Brad

[BOWTIE6872]

Re: hotchkis suffering from economy

If you've ever been to business school, there is a formula for pricing your widget. It's a graph, and it takes into account the number of units and cost per unit, and tells how many you need to sell to make X profit. There is a point where selling more for the same net profit is just dumb.

WHAT!!!!!!!!!!!!!
how is that just dumb..
the more that use your "widget"
the more WORD OF MOUTH ad space you get FOR FREE...
your statement is just dumb

[CaminoKid]

Re: hotchkis suffering from economy

[your statement is just dumb

But then again,you live in never never land.

[Brad54]

Re: hotchkis suffering from economy

If you've ever been to business school, there is a formula for pricing your widget. It's a graph, and it takes into account the number of units and cost per unit, and tells how many you need to sell to make X profit. There is a point where selling more for the same net profit is just dumb.

WHAT!!!!!!!!!!!!!
how is that just dumb..
the more that use your "widget"
the more WORD OF MOUTH ad space you get FOR FREE...
your statement is just dumb

It's not "my" statement, it's business principle. Just because you have more of them out there doesn't mean you made more money. Advertising is only one factor in the cost of a widget.

There's a sweet spot where the number you make intersects profit, and making more than that, even for a lower cost per unit, doesn't put any more money in your pocket. At that point, making more and selling them for less for the same money at the bottom line is just like masturbation--you're screwing yourself for no gain.

-Brad

[SpiderGearsMan]

Re: hotchkis suffering from economy

just scale back
we will recover
we always have , right ?
this time may be different

[BOWTIE6872]

Re: hotchkis suffering from economy

If you've ever been to business school, there is a formula for pricing your widget. It's a graph, and it takes into account the number of units and cost per unit, and tells how many you need to sell to make X profit. There is a point where selling more for the same net profit is just dumb.

WHAT!!!!!!!!!!!!!
how is that just dumb..
the more that use your "widget"
the more WORD OF MOUTH ad space you get FOR FREE...
your statement is just dumb

It's not "my" statement, it's business principle. Just because you have more of them out there doesn't mean you made more money. Advertising is only one factor in the cost of a widget.

There's a sweet spot where the number you make intersects profit, and making more than that, even for a lower cost per unit, doesn't put any more money in your pocket. At that point, making more and selling them for less for the same money at the bottom line is just like masturbation--you're screwing yourself for no gain.

-Brad

YUP.. AND WE'VE SEEN HOW GOOD THAT BIZ MOdel works..

[Brad54]

Re: hotchkis suffering from economy

If you've ever been to business school, there is a formula for pricing your widget. It's a graph, and it takes into account the number of units and cost per unit, and tells how many you need to sell to make X profit. There is a point where selling more for the same net profit is just dumb.

WHAT!!!!!!!!!!!!!
how is that just dumb..
the more that use your "widget"
the more WORD OF MOUTH ad space you get FOR FREE...
your statement is just dumb

It's not "my" statement, it's business principle. Just because you have more of them out there doesn't mean you made more money. Advertising is only one factor in the cost of a widget.

There's a sweet spot where the number you make intersects profit, and making more than that, even for a lower cost per unit, doesn't put any more money in your pocket. At that point, making more and selling them for less for the same money at the bottom line is just like masturbation--you're screwing yourself for no gain.

-Brad

YUP.. AND WE'VE SEEN HOW GOOD THAT BIZ MOdel works..

That business model has worked since the beginning of business, when taken over the long term.

Things get screwed up when businesses (and the government) try to do things in different ways--typically short-term plans or fixes for short term goals or profits, without looking at the long picture. These days its all about instant gratification.

Everything is cyclical. Weather, the economy, the stock market... and short-term, knee-jerk reactions aren't going to be a long-term fix or solution.

-Brad

[TC]

Re: hotchkis suffering from economy

I think on most of things (like supercharger) have a great deal of time in development, and manufacturing cost in them. I would be surprised if they made more than 10-15%profit. I will also say I bought a procharger kit and yeah it cost as much as most cars I have ever built but going fast is not cheap, every thing fit and was included. If they made a that cost less it would have to be made overseas and probably not fit as well or be of the quality. I will always take quality over price on my hot rod parts, just hope the quality company's survive

If your making a 10-15% profit you need to close the doors. Sure the R&D cost money, but after a few years you end up making your money back on that. As for profit, I'd say that the retailer buys it at about 1/2 the retail price maybe a little more, and I'm sure the manufacturer is making a 100+% markup. So on a $6000 Procharger kit, they have about 1000-1500 into it.