I could reply to some of the markups but you have to understand the fact that price is determined by many factors. R&D, labor, insurance, shipping, manufacturing cost per item (overhead) and includes the estimated number of units you can sell per year or business cycle. Our hobby is not a wide spread industry and therefore does not command the same economies of scale as other industries. Some long term players like Tunze and Eheim are closer to the testing and development of long term products simply because of the German mindset of making long lasting products.
Now lets address the cost of equipment. In many cases I have noticed that the hobbyist is much like a fisherman. In a sporting goods store most of the lures are designed to catch fishermen and not fish. .
The above is only part of a quote:
I also have 2 cents to add. I myself have two aquarium related patents so I know a little about aquarium related sales. My second patent cost me about $30,000.00 all together. If they don't grant you a patent (and 98% of patent applications do not get granted) it would still cost you about $25,000.00.
You have to lay that out and it is mostly lawyers fees. Then if you want to
market the thing you need to have molds built. A tiny mold like the top of a pen is about $3,000.00 to make. Then you search all over for a manufacturer. That is not easy because I am a Veteran and want "everything" made in the US. That is impossible because very little is made here no matter how much you are willing to spend. We just don't have the manufacturing here and for something like a marine aquarium related item, you will never sell enough units to start a factory like General Motors would do.
My device is mostly built in America as much as possible. China or India would love to build the thing but I won't do it. Even if I did, it would only drop the cost about $3.00 out of the $112.00 or so it costs. Virtually everything I buy is made in America "If there is such a thing". Today my wife and I went shopping. We wanted grapes and pistachio's but the grapes were from Chili and the pistachio's were from Israel. So this week we don't have grapes and pistachio's. We also wanted scallops, but they were from China as was the flounder, so I got American calamari, and that is what we are eating tonight.
Getting back to manufacturing. The inventor, or in this case, me, makes very little from the sale of something as most of it goes to parts, manufacturing, wholesaling, insurance, packaging and shipping. Out of that $120.00. I think I get $4.00. Last year our manufacturer in Florida raised our costs by a significant amount so if we didn't raise our price, It would actually cost me money for each unit we sold.
As for quality. I want my device to work well for a few reasons. First of all I have a reputation but more important, it is warranted which means any one of them that fails, I either fix it or give you another one. I still have to pay for that other one so if a part fails, I take the thing apart and order a better made part, which is usually more money. Out of the 4 or so thousand we sold maybe 15 had some problem that we had to fix or exchange. That isn't bad but I do not build these things myself and the human in the factory is not infallible so mistakes happen. Out of all the repairs we made we have only had one customer complain, and that was after I repaired his unit twice and the warranty expired.
I did not invent anything because I thought I would make a bunch of money. For me it is a hobby and I figured I had an idea that could help with a problem.
I also wrote a book, and if I figured how much I earned from writing the book, it would probably come out to 10 cents an hour. We in this hobby don't do these things mainly for money. At least I don't. We do it for a love of the hobby and little else.
