Neptune SKY LED

Aquarium Specialty - dry goods & marine livestock

rtparty

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Wishful thinking. I’m not sure Neptune would even break even @$600... I know people would like to see a $600 premium LED, if only in the vain hope that other manufacturers would follow suit and drop their prices as well. Then they could buy an XR30 for $600...

We can do some basic business math on this. Neptune could make good money at $600 if they sold direct with no middle men anywhere
 

HurricaneSystems

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We can do some basic business math on this. Neptune could make good money at $600 if they sold direct with no middle men anywhere
And some basic business skills would tell you that you have no idea if they would make a profit at $600 a fixture, as you have no idea what the materials and R&D cost.
 

rtparty

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And some basic business skills would tell you that you have no idea if they would make a profit at $600 a fixture, as you have no idea what the materials and R&D cost.
Actually, I do know since I know the vendor's cost on these. If Neptune sells them to vendors at a loss, then that's very poor business
 
RAP

HurricaneSystems

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Actually, I do know since I know the vendor's cost on these. If Neptune sells them to vendors at a loss, then that's very poor business
Again, you don't know what you're talking about. A vendor's cost has nothing to do with the actual capital that Neptune put into each fixture.

ROI would be based on a long term strategy. They wouldn't try to recover all cost in a six month period or the light would cost $2500.00.

And remember, vendors have tiered pricing. An LFS might pay $500 a fixture, where a large retailer like BRS might pay $375.00 because they move more volume.
 

rtparty

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Again, you don't know what you're talking about. A vendor's cost has nothing to do with the actual capital that Neptune put into each fixture.

ROI would be based on a long term strategy. They wouldn't try to recover all cost in a six month period or the light would cost $2500.00.

And remember, vendors have tiered pricing. An LFS might pay $500 a fixture, where a large retailer like BRS might pay $375.00 because they move more volume.
Of course it's a long term ROI. But they aren't selling the fixture to vendors for $500 when they cost $525 to build lol (made up numbers)

They'd never make money back at any point.
 

rtparty

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I don't think you understand what I'm saying, but that's ok.
I full well understand what you're saying.

You think companies don't know the R&D costs they put into an item? Of course they do. They also have projections on how many units they need to sell at a certain price to make that R&D back. Plus they need to pay salaries, utilities, overhead, etc etc

Every unit they sell must make some amount of profit in some way. The SKY doesn't have any type of subscription or recurring way to make revenue. They must make their money upfront on each unit. Or sell the light at a loss hoping it draws in enough new users buying other items (example, Costco chicken. Lose money on every chicken but put it at the back of the store. Stats show people buy at least one other item to make up the loss plus some.)

I highly doubt any company in this industry is creating a light hoping it will get people to buy other items in their lineup. That's terrible business in a niche hobby like ours. Companies in our hobby can't operate on a super low margin but high quantity like Costco, Walmart, and others.

I will leave it at this but I've worked on multiple lights with multiple companies in this hobby over the years. Mostly back in 2008-2012 when LEDs were new. The profits were ridiculously high back then. One of the very first LED makers even admitted they could make more money on one LED fixture than 4 halide fixtures.
 

HurricaneSystems

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I full well understand what you're saying.

You think companies don't know the R&D costs they put into an item? Of course they do. They also have projections on how many units they need to sell at a certain price to make that R&D back. Plus they need to pay salaries, utilities, overhead, etc etc

Every unit they sell must make some amount of profit in some way. The SKY doesn't have any type of subscription or recurring way to make revenue. They must make their money upfront on each unit. Or sell the light at a loss hoping it draws in enough new users buying other items (example, Costco chicken. Lose money on every chicken but put it at the back of the store. Stats show people buy at least one other item to make up the loss plus some.)

I highly doubt any company in this industry is creating a light hoping it will get people to buy other items in their lineup. That's terrible business in a niche hobby like ours. Companies in our hobby can't operate on a super low margin but high quantity like Costco, Walmart, and others.

I will leave it at this but I've worked on multiple lights with multiple companies in this hobby over the years. Mostly back in 2008-2012 when LEDs were new. The profits were ridiculously high back then. One of the very first LED makers even admitted they could make more money on one LED fixture than 4 halide fixtures.
And you still don't know what you're talking about. You, RTParty have ZERO idea how much Neptune has to sell these at to become profitable because you have ZERO idea of what Neptune's Financials are and cost if this LED.

That's what I am trying to get through to you. No one can speculate profit unless they know the financials. None of us do.

You know (allegedly) what the wholesale pricing is for an LFS, but no one knows the true financials except Neptune.

Now, what you said is that they won't take a loss on lights to sell other products? Why not, that makes no sense seeing as how Neptune has many other products.

I can about guarantee you thry make more on that glorified power strip than they do on the Sky.
 
BRS

rtparty

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And you still don't know what you're talking about. You, RTParty have ZERO idea how much Neptune has to sell these at to become profitable because you have ZERO idea of what Neptune's Financials are and cost if this LED.

That's what I am trying to get through to you. No one can speculate profit unless they know the financials. None of us do.

You know (allegedly) what the wholesale pricing is for an LFS, but no one knows the true financials except Neptune.

Now, what you said is that they won't take a loss on lights to sell other products? Why not, that makes no sense seeing as how Neptune has many other products.

I can about guarantee you thry make more on that glorified power strip than they do on the Sky.
Just answer a very simple question...

If it costs Neptune $600 (all in) per unit and they sell them to a vendor for $550, when will they be profitable?

Again, hypothetical numbers here. I'm not going to post wholesale costs online out of respect for every company out there.
 

HurricaneSystems

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Just answer a very simple question...

If it costs Neptune $600 (all in) per unit and they sell them to a vendor for $550, when will they be profitable?

Again, hypothetical numbers here. I'm not going to post wholesale costs online out of respect for every company out there.
You're talking about two entirely different things.

Yes, they could be profitable if it cost them 600 and they sell them at 550. Depending on the ROI goal they have set. At some point, let's use a theoretical figure of 20,000 units, they will recover their base investment. All units after the 20k would be straight profit.

So yes, they absolutely could make money. You're looking at the situation too simply. You're saying if I have 5 dollars is that greater than 10. No, of course not, but this situation isn't that simple.

I'm going to start charging you for business lessons if this continues, LOL.
 

rtparty

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You're talking about two entirely different things.

Yes, they could be profitable if it cost them 600 and they sell them at 550. Depending on the ROI goal they have set. At some point, let's use a theoretical figure of 20,000 units, they will recover their base investment. All units after the 20k would be straight profit.

So yes, they absolutely could make money. You're looking at the situation too simply. You're saying if I have 5 dollars is that greater than 10. No, of course not, but this situation isn't that simple.

I'm going to start charging you for business lessons if this continues, LOL.
So, like I said, Neptune could sell them for $600 and make money. No?

You can charge me for business lessons all you want. The fact is LEDs are massive money makers for these companies and they aren't sitting in the negative for long.
 

HurricaneSystems

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Sigh................

It's 2am here, going to bed. It doesn't matter if they sell them for 5 dollars, you have no idea if they are making money at 600 because for the 10th time, you have no idea of the investment.
 
AS

blaxsun

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There are two price points to consider here: distribution (wholesale) and retail. While some manufacturers can and do sell direct, they also rely on established distribution and retail chains for the bulk of their sales.

If we assume a profit of 10% for both the distributor and retailer (which may in fact be low), that means -$174 of the price of the SKY is already allocated. So that $870 light is actually selling for $696.

Out of that $696 comes the research, marketing and ongoing development costs - including such aspects as feature improvements, warranty, etc. Then you have the actual manufacturing costs of the SKY themselves. Presumably they’re doing some of this in-house (or at least contracted out locally). They could probably save some more money by outsourcing overseas, but I’m not sure that it would be the same product (and there are other issue).

And then Neptune actually has to turn a profit on the SKY to be able to continue to stay in business and develop new products.

Just because BRS now owns Neptune doesn’t mean that you’re going to (or should) see the price slashed. It just means that they most likely get distributor (or better) pricing on the SKY, which means they’ll sell it for the same price as everyone else - just for more profit than the average distributor or retailer.
 

DaneGer21

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Yes, they could be profitable if it cost them 600 and they sell them at 550. Depending on the ROI goal they have set. At some point, let's use a theoretical figure of 20,000 units, they will recover their base investment. All units after the 20k would be straight profit.
This makes absolutely no sense to me. Even if they sold the 20k units, all for a $50 loss, there’s absolutely NO way to be profitable. Every single light would be a loss. Yeah, they might get the original investment back, but, it is not profitable if they lose $50 per light and continue to do so.
 

blaxsun

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The EcoTech Radion G5s seem to be the hobby standard right now, and the Neptune SKY is obviously designed to compete with EcoTech. Is it a better light? Time will tell I guess. The definitely have their quirks and I’m sure we’ll see a few with the SKY over time as well.

There are a few scenarios where the SKY potentially providing more coverage could end up costing less than a similar Radion setup, an example being my Red Sea Reefer 750XXL (running 2x XR30’s and 1x XR15). Some people may also prefer the look and integration of the SKY into an existing Apex setup.

I don’t necessarily think the SKY is a bad light, nor do I necessarily think the Radion is the ultimate light.
 

Jon's Reef

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Neptune already disclosed some of the numbers.
4-5% goes to Philips, 15-20% goes to the reseller ($150-$200)
LEDs are $1-$2 each

Easy to look up the power supply:
PS with qty discount ~$50 ($90 retail from Meanwell)

Then you have to add in the radio, drivers, case, heatsink, fans, cord, packaging, shipping, assembly labor, purchasing labor (for buying the parts), warranty (CS, shipping, replacements), R&D recoup, Sales/ Marketing, inventory (parts, full units and demo units), paying for fusion servers and profit.

In the end they are probably making $50-100 after figuring a 2-3 year R&D payoff (with an extra $50-$100 at that point).

The price is not coincidental based on the Watt/ LED numbers. It is right at market value in the price plots I previously posted. Straton, CC and Orphek are going for the premium prices. Ecotech and Neptune are in line. Reefi and ReefBreeders are on the value side. Note that Reefi only sells direct, so take that into account and it is pretty much in line (also Reefbreeders new "Pro" line is in line with the Ecotrech/ Neptune price points).

In the end, the price is not "premium" vs the larger market, it is completely in line. Comments that it is "way too much" or "Should be a $600 light" are not based on the actual market, they are personal feelings.
 

blaxsun

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Neptune already disclosed some of the numbers.
4-5% goes to Philips, 15-20% goes to the reseller ($150-$200)
So I was pretty close on my estimate. Apparently “profit” is something evil these days...

Perhaps this is a good time to point out that we’re not buying fish and invertebrates - merely renting or leasing them (they all have a finite shelf life).

If I was setting up my tank today I would seriously consider the SKY. And why not? I’d be crazy not to just out of spite. I’d also not be doing my due diligence if I didn’t check out other lighting options beyond Radions as well.
 
RAP

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