|
|
Topic is locked
|
 Prev Next
|
| Author |
Messages |
|
|
|
Gsfrey
Registered Users
New Member
Posts:71
 |
| 06/22/2009 11:36 AM |
|
Mike,
The hate America stuff is starting to get old. SIP's are not priced where they are because America is awful. They are priced where they are because that is what the market will bear. But, if you have a knot of cash, can get slave labor and know a city where the community will pay our rent and utilities so we can produce cheaper SIP's, let me know I want in. Oh wait, that manufacturing Nirvana already exists, it's called China.
Japan is only Japan because we made it so. Maybe you were absent the day they taught history in high school, but we rebuilt Japan and they took advantage of our generosity. We won the war and made them stronger after. Maybe you can get your "China First" crowd to do the same for us, but I doubt it.
When the market requires SIP's be provided cheaper, some manufaturers will and some will go out of business. SIP's may one day need to be priced cheaper. Why oh why would those of us puttin SIP's into the market place make them cheaper, there is no need to?
You speak of Economics as if you have some divine insight. It sounds more like you want something for nothing.
|
|
Greg Freyermuth
915-256-7563, Phone
GregFreyermuth@elp.rr.com, E-Mail |
|
|
Brawler
Registered Users
Basic Member
Posts:127
|
| 06/22/2009 11:43 AM |
|
Posted By Mike H on 06/21/2009 8:07 PM This all sounds eerily like there are only a few people in this business, and they are very afraid of losing market share by being competitive on price points.
Mike H Not sure i follow this fancy ecunamic principle. please explain  |
|
|
|
|
Brawler
Registered Users
Basic Member
Posts:127
|
| 06/22/2009 11:44 AM |
|
| Sorry, include my text with quote. Mine starts at Mike h |
|
|
|
|
Mike H
Registered Users
New Member
Posts:9
|
| 06/22/2009 8:38 PM |
|
I talk about Economics because it's my field. I spent many years and many dollars to learn and understand it. I am not part of the 'Hate America' crowd. I love this country and served it. But Americans have a huge problem admitting the truth when it doesn't put us in a favorable light, or forces us to bear responsibility for our choices as a nation. Our pride gets us into trouble.
And those jobs that were exported won't come back. They aren't supposed to, and it was never intended for us to compete with cheaper countries. That would be unproductive and regressive. Our economy was supposed to evolve into a more advanced, less labor focused economy when those jobs left. It's the evolution of business. And the history argument doesn't wash in the case of Japan. Yes, we paid to rebuild a lot that we destroyed, but we spent much more than that in our own country. The difference was insight. The Japanese had a better plan for spending the money than we did.
My original question was about SIP prices and the demand curve. No one can deny that traditional building techniques dominate the housing market. So I had supposed, considering the efficiencies of prefabrication and the lower cost of materials involved in SIPs, that a competitive point would have been price. So I wondered why dollar for dollar a wall made of SIPs costs as much as or more than a stick framed wall, especially when demand is lower for SIPs.
But hey, instead of a discourse into the actual business of producing SIPs, and the cost structures involved, I get a bunch of job-scared armchair CEO's grumbling that a consumer had the audacity to question their market position and business practices. God forbid that a potential customer might want to better understand a product before buying it. Then this degenerated into a flag waving, "if you don't like America you can get out!" bullshit fest.
If this is the way you do business, and react to your clients and consumers, then I hope you all have really good retirement plans. But I would like to thank Chris Kavala for his responses earlier in this thread. His responses were polite and on the point and answered some of my questions. Best of luck, Chris. |
|
|
|
|
Mike H
Registered Users
New Member
Posts:9
|
| 06/22/2009 8:45 PM |
|
| To Brawler's question:
If you only have a small number of companies in an industry, they have two choices: 1, collude and set the price together, creating an oligarchy, or 2, compete on price, which drives the price down as each company tries to be the cheapest in order to gain greater market share.
If I am the only person making a product people want to buy, I can pretty much ask what I want for it up to the point that people stop buying it. If another company comes along and begins making the same product, we could agree to set the price at the same point so that we don't have to compete against each other. People just pay what we decide they will pay, regardless of actual factors of production - so long as we both make enormous profits. This is collusion and oligarchy. It's similar to a cartel.
In free markets, producers are expected to compete with each other to gain market share. which means inevitably lowering costs and price. And yes, some companies will lose. |
|
|
|
|
Brawler
Registered Users
Basic Member
Posts:127
|
| 06/22/2009 9:11 PM |
|
| Dont think that explains much. You must have some seriously deep contacts in the SIPS oligarchy. What do you do for a living Mike H? |
|
|
|
|
leonhuang
Registered Users
New Member
Posts:20
|
| 06/22/2009 9:41 PM |
|
| Hi guys, I love America, but i want to buy reasonable priced products. Sooner or later, you will see these kind of products are imported from China or India, just like millions of other products.
So i decide to wait for somebody to import it for me. Cheers!
By then, unfortunitely, some of the SIP manufaturers here, who are not flexible enough, will close your business or lose your job. But this is life...I don't want to spend more money to protect your job, sorry. :)
But I believe most of them will be okay, since they will learn to cooperate with factories in China or India, and become their distributors, which is not bad at all... |
|
|
|
|
Mike H
Registered Users
New Member
Posts:9
|
| 06/22/2009 9:56 PM |
|
Brawler:
Not that it's relevant, but I'm a sales analyst for a rail car manufacturer and soon to be Law Student. As for as explaining anything, I'm not here to answer my own questions. I asked why are SIPs, which have a lower market demand than conventional building materials, priced at roughly the same level? No one answered, except to say "Why should we lower prices?" Ok, fine. So the only conclusion I could come to is that there is collusion among the few producers of SIPs to keep the price high. Much like in the crude oil industry, etc... If the producers were competing, it would seem that the laws of supply and demand would be at play and prices would be lower relative to the price of traditional materials, given the clear cost and efficiency advantages of producing SIPs.
But no one, with the exception of Chris wanted to address this head on. Since I'm not in this business, and there is very very little information out there about the costs structures within this industry, I wanted to ask questions of the people who supposedly know. But those people got scared and started the whole defensive "you don't know anything about anything, you hate America, you want something for nothing, why should we undercut the lumber industry and increase the size of our industry when right now a small segment of the market is still willing to overpay," routine with me.
If a builder comes to you and wants to use your SIPs in his business, and he asks you why they cost so much, and how he can compete with traditional builders at the current price level, are you going to answer his questions or start screaming "You hate America and want to give all of our jobs to China! Freedom! Patriotism! Rabble rabble rabble!!!" ? |
|
|
|
|
cmkavala
Registered Users
Veteran Member
Posts:1384
|
| 06/23/2009 5:10 AM |
|
MikeH;
thanks for the props!, But you will now be acused of being related to me |
|
Chris Kavala
chris@southernsips dot com
1-877-321-SIPS |
|
|
Brawler
Registered Users
Basic Member
Posts:127
|
| 06/23/2009 7:22 AM |
|
Mike H, do you have any inside info about the SIPS biz? If not YOU are just making boneheaded assumptions. I may sound patriotic or whatever other stuff you spewed but if i want customers in my biz, which is specialty beer, It is good economics to keep my dollars close to home. You sound to me like an idealistic kid fresh out of school, cashing a rich mans paycheck and resenting it all the way to the bank. I lurked on this site for over a year before my first post. How bough you? Most of my post have been questions about green building or answers when i can supply them. How bough you? I have very little to contribute and nothing to gain except Green building knowledge. The reason nobody is defending themselves is because your repetition of economic principles doesnt belong here and makes you look like a DA. I didnt even know that CEO's were posting here or Oligarks. Holy smoke! To quote Buggs Bunny "Wada maroon." michael |
|
|
|
|
Brawler
Registered Users
Basic Member
Posts:127
|
| 06/23/2009 8:48 AM |
|
Posted By Mike H on 05/30/2009 3:30 PM
I don't think it's possible to read a single thread on the internet that doesn't at some point degrade into an argument. That being said, Both sides of this issue make valid points, and both sides of this issue have made some bone-headed assumptions. Pulling numbers out of thin air, along with the posters lack of M.B.A.'s in Operations Development and Finance, make it hard for anyone not seriously dedicated to this trist to take it seriously.
Here's an academic short course on economics: Start-up costs are dead-weight costs that can't be recovered, and if you view markups as ROI for your dead-weight costs, then you ARE screwing your customers. The reason the "Big Boys" in SIP manufacturing seem to be "in line" with each others' price points is because the industry is an oligarchy without enough players to make it competitive - partly because the "Big Boys" are trying to force propriety over a non-patent system, (if you don't believe me, try finding information about manufacturing techniques and materials suppliers...good luck,) and Leon is somewhat right in his assumption that SIP technology is not widely accepted by American consumers or builders, thus, demand is trailing supply and the price is high. And all this talk about certification seems a little shady, given that the IRC, Section R614, doesn't require any particular "certification" for SIPs built to IRC guidelines.
Competition is good for business. It's good for consumers. Oligarchies and monopolies are self destructive, which is evidenced by the fact that an overwhelming majority of American homes are still stick built, and will continue to be for a long time. The price has to be so irresistable that builders/owners can't ignore it. Those "long term energy savings" numbers make for good press, but they simply aren't that effective on most buyers. Americans want value today, not 30 years from now.
|
|
|
|
|
Gsfrey
Registered Users
New Member
Posts:71
|
| 06/23/2009 9:01 AM |
|
Naturally, you did not explain one valid Economic principal to support your blathering that SIP's are too expensive. But rather, complained that you could not get them cheap enough.
SIP's pricing varies throughout the country. But you have never read a post to this discussion board fixing prices.
The price of SIP's is driven by the more heavily used stick build process. It is the industry standard so we price to compete, not the other way. If you sell something, you should know this. As a matter of fact if you sell rail road stuff there are probably few folks who do what you do. Collusion or entry into the market keep the vendor base in railroad items small? I suspect it the latter.
If you want SIP's cheaper, fine, make your own. Make them in the back yard. But quit pretending to have an understanding of this industry. I don't pretend to understand how to price train stuff... |
|
Greg Freyermuth
915-256-7563, Phone
GregFreyermuth@elp.rr.com, E-Mail |
|
|
PanelCrafters
Registered Users
Veteran Member
Posts:1408
|
| 06/23/2009 9:35 AM |
|
Posted By Mike H on 06/23/2009 8:18 AM
Panel Crafters:
You are a homophobe, a racist, a purple dinosaur, and an illegal immigrant. Do you see what I'm doing here? I'm just pulling random things out of my butt and applying them to you, as if I know something about you, kind of like you did to me in your last post. And since none of you has answered my question, I have to figure none of you know the answer. So I am clearly wasting my time here.
Sorry, we are not your servants. Maybe if you are lucky WalMart will start selling SIPS at the price point that you desire. Otherwise, please stick build...
 |
|
....jc
If you're not building with OSB SIPS(or ICF's), why are you building? |
|
|
Mike H
Registered Users
New Member
Posts:9
|
| 06/23/2009 10:33 AM |
|
| Thank you, Greg, for finally answering my question. May I ask another? If you are pricing in line with stick builders, would it not help the industry grow and gain popularity if SIP builders priced below traditional framers? i mean just from the standpoint of getting more people to build with them. Is there room for to cut the margins that way? I don't know what it actually costs to build a SIP panel, I just know that the home market seems resistant to using them, (and that could just be in certain areas, I don't know,) even though they seem superior to other ways of building. |
|
|
|
|
|
| Topic is locked |
|
|
|
ActiveForums 3.6
|
Professionals Serving
Your Location:
|