finn
Well-known member
Retail cost isn’t always directly related to material, labor, or manufacturing cost, either. The retail cost includes things like what competitors are charging and cost / price / demand elasticity.I want no part of this conversation except to say: Try to think of factories more like restaurants.
1) there are a bunch of PEOPLE behind the scenes doing “stuff”. If it was as simple as feeding steel into one end, and collecting tools from the other, there wouldn’t be 300 people at the Snap on plant in Milwaukee.
2) like food, tools have recipes, and they get made in batches. Each batch will have its own unique parameters- machines must be programmed, timers set, etc.
It’s very easy for a factory, like a restaurant, to make different products at different quality levels. Even fully automated manufacturing facilities have “recipes”.
There very likely isnt a 3/8” drive 9/16” line and a 1/4” drive 3/8” line. We know there are multiple lines and each one makes a range of different products on them. That’s what the PEOPLE do. There is no manufacturing line that makes you a set of metric deeps. That’s why sometimes you can buy snap on and get a Williams socket mixed in. But that isn’t evidence they are identical.
My guess is, for most plants where I’ve worked, manufacturing costs = materials + time. Materials could be identical, but an hour faster through the tumble media polish, quicker through heat treat, use of older machinery, less time in plating, is how the plant could make 2 different product lines at different price points. Time is usually where the cost is.
Hope this helps
Your example is probably well illustrated by companies like SBD, or Apex tool, where they have Multiple brands in house and als produce for competitors under private labels. SnapOn does the same with Williams (and Cat). They may or may not be functional equivalents, but it is stretching it to say one label is junk or even demonstrably inferior. Detail differences but not junk.
Much of the SnapOn price premium is due to the inefficient distribution network. Someone has to pay for all those drivers and trucks Servicing their customers. Cat doesn’t have to burry that overhead in their selling transaction costs. Their “salesmen” are dealing with the core business, equipment parts and service. Tool sales are more of a convenience to their customers and a branding excersize.
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