Looney Labs Icehouse Mailing list Archive

RE: [Icehouse] Re: Regarding Official Zero-Pointers

  • From"Paul Blake" <dalek_no2@xxxxxxxxxxx>
  • DateThu, 08 Mar 2007 13:52:58 -0600
And then, a bit later, Chris wrote...

The name's Paul, actually.

> A standard Treehouse set costs $9.00 retail, $4.50 wholesale.  It
> contains only three pieces of each color, so to effectively create
> and sell ZPIPs (Zero Point Icehouse Pieces), you would need to
> convert sets in multiples of five.

Wait a second, I'm confused. Why would one want 15 ZPIPs in a SINGLE
color, which is what your math yields? Folks only need five per color,
to "fill out" the five stacks in a monochrome stash.
Err... Is that what you meant? That you'd have to make five full
compliments (i.e. 15 per color), to "use up" all purchased pieces?
Well, sure, yeah--that's the least common denominator of 5 and 3. ;^)

Yes, that was the rationale. Each treehouse set contains 15 pieces, 3 each in 5 colors. To get a multiple of 5 ZPIPs in each color with no leftovers, you must convert in batches of 5 treehouse sets.

ANYHOW... if wholesale is $4.50 a stash--I didn't know that--and if one
can make a full set of 5 pieces x 11 colors of ZPIPs with only four
Treehouse stashes and a set of Volcano Caps; then it become a much
cheaper proposition, for someone who wants to market these things. Now
we're talking about less than $18 + $4 in materials--still wasting a
bunch of it, sadly.

Why did you switch back to four sets?  You're wasting 2/3rds of a set.

Say there's *maybe* ten seconds of labor on band saw and belt sander
(or, better, belt sanding table) per piece, for a total of around 550
seconds: less than ten minutes. Let's call it 15 minutes, to round up
and allow for fumbling and work breaks.

10 seconds of labor if you've got power tools geared towards the task. Unfortunately, the idea of using a bandsaw with this is not really feasible: It runs too fast, and the ZPIP would go flying when you finished the cut. A reciprocating jigsaw might work, but you'd wear out the blade after that many pieces. Remember, we're talking about a non-industrial approach, so assume that you don't have access to fancy multi-thousand dollar equipment.

== $22 in materials--with a "surplus" of about 20% on the colors, so
effectively only $19 (83.34% of $18 + $4)
== One quarter hour of labor at $40 an hour = $10
... and we are well under the $55 total at the replacement piece price
($1 each). Heck, we're under the $33 I proposed for actual molded
pieces... and that's including wasting some 90% of the plastic and 100%
of the packaging! 8^O

That's an interesting way of claculating expenses, but no. You paid for the surplus, so it still counts as a cost. Also, why are you making one 11-color set and one 10-color set?

Here's how I see it:
-$4.50 per set of 15 pieces, so $0.30 per piece cost of goods. ($4.50 / 15)
-Let's say you can get 75 pieces cut for $10.00: That's even more optimistic than your estimates. That adds another $0.13 per piece ($10.00 / 75), so we're up to $0.43 per piece. -50 pieces in a 10-color set, so $21.50 cost of goods and labor. ($2.15 on a 5-piece set)

That's parts and labor for anyone who wants to do this, not the cost to the customer. So, how many sets do you anticipate selling? Thousands? Hundreds? Dozens? If you're selling these at $30.00 for a 10-color set, you have to sell about 71% of your inventory -just to break even-.

(You make 100 10-color sets, at a total cost of $2150.00. You sell 71 sets at $30.00 apiece, for a total of $2130.00. You're still losing $20.00. On your 72nd set, you'll finally show a profit of $10.00.)

This might just be a viable little eBay thing. As long as you sell them
before making them (letting people know that!) then there's no
financial risk. You've got to add in the eBay fee and some shipping,
and if you want a bit of profit, call the base price an even $30: that
should still be under $40 total. Cut eBay out--say, if Looney Labs
hosted your sales as one of their game items, much like they do for the
Volcano boards made by Kadon--and you only add shipping. Under
$35--these little guys couldn't possibly weigh much, and could be
mailed in a padded envelope in standard mail.

Okay, so you're making these on demand, which pretty much guarantees a 100% sell rate. That's fine, but are you sure you can make them fast enough? Also, you're leaving out the shipping cost of getting the Treehouse sets in the first place, which is important here: Since you're doing this on-demand, you're only going to be ordering small amounts of Treehouse sets, right? Like four or five at a time? That's probably going to add about $3.00 to $4.00 to the total cost of goods (bumping the cost per piece up by about another $0.04 to $0.05). Of course, if you're already ordering a large amount of stock from a major distributor, you could add the Treehouse sets and effectively nullify the shipping cost.

Then you've got the matter of turnaround: If you sell these on the "You pay me, then I make them" model, at what point do you actually order your supply of Treehouse pieces? Do you wait until at least X have sold? If so, you've got paying customers who wait in limbo until the Xth set sells so that you can go out and order your pieces. Sure, you may be able to make all the sets that evening and ship them the next day, but until the Xth set sells, they're screwed. You will receive complaints, and you will eventually run into people who reverse their payment while waiting for the Xth set to sell.

Or do you do it in the sense of "I'm listing 100 for sale, and I'll make as many as people order by 2:00pm on Friday." Strictly speaking, this violates eBay's terms of use, and could even be viewed as illegal. You are not permitted to sell an item which you do not actually have in your possesion at the time of the listing. Also, this would wind up raising your cost of shipping per unit in the event of low demand.

THEN, you get a good production system in place: I'd consider ways to
make a jig on the band saw, rather than holding or using a small, so
that it could be a one- or two-second swipe. Every second of production
time saved equals extra dollars per hour--though I'd probably be quite
content to spend a slow hour making four full compliments, some
evening, for $40! :^)

You would be making $40.00 per hour if you were just doing the labor. However, I thought we were talking about the cost of making these versus how much they would cost. At $30.00 for a 10-color set, you still have to sell 71% of your stock before you break even.

As for streamlining the process, yes, you can do that. Then you have to factor in the cost of the tools to streamline the process. How much does it cost you to upgrade? Do you wait until that amount has already been paid for before you attempt it? Once you complete the upgrade, will there still be enough demand to justify spitting out the pieces at the faster rate?

These are the questions that -anyone- who wants to try something like this needs to think about long and hard before they try.

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