Knock-Off Parts
10-31-2007, 11:47 AM
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Knock-Off Parts
By now, everyone on this forum must have noticed that whenever a post about a Rota, or Seibon, or Rotora product appears, there is a sect of this forum that comes out of the woodwork to bash so called, "knock-off" parts.
The rationale for the hatred seems somewhat jusitified. Companies like Spoon, or J's or Mugen put in alot of R&D time making parts that are race ready and functional. Then another company simply takes a mold of their product and sells it for a fraction of the price.
My question... why is this a bad thing? There are two possible outcomes:
1) The product is virtually identical to the original in every way and yet someone is able to sell it for less. This in turn means that the original company is manufacturing it in a wasteful way or they are gouging with thier profit margin. I know, I know... "but what about the R&D time?" Here is my thought: If the original company would sell it at an uninflated price (normal markup between 10-30% cost to wholesale) then more people could buy it and they would make up the R&D expense without over-inflated markup. Laying carbon fiber, fiberglass, or bending exhaust tubing is the exact same for knock-off companies as it is for the big dogs... Why then does Amuse's fiberglass bumper costs thousands while everone else can sell it for hundreds??? The quality control may be better, but that doesnt account for a 300% markup. The answer must be larger profit margin.
2) The product is inferior to the original in terms of fit, quality, materials, etc... In this case, the original still has something going for it which makes it worth the premium. People to whom these features matter can still purchase the original. People that dont now have a more affordable option minus the features they dont care about. The people buying the latter would not have bought the former, so it isnt like they are taking sales away from the likes of J's or Spoon. The market will balance itself: this is the nature of capitalism. The consumer will dictate what lives and what dies.
Thoughts?
The rationale for the hatred seems somewhat jusitified. Companies like Spoon, or J's or Mugen put in alot of R&D time making parts that are race ready and functional. Then another company simply takes a mold of their product and sells it for a fraction of the price.
My question... why is this a bad thing? There are two possible outcomes:
1) The product is virtually identical to the original in every way and yet someone is able to sell it for less. This in turn means that the original company is manufacturing it in a wasteful way or they are gouging with thier profit margin. I know, I know... "but what about the R&D time?" Here is my thought: If the original company would sell it at an uninflated price (normal markup between 10-30% cost to wholesale) then more people could buy it and they would make up the R&D expense without over-inflated markup. Laying carbon fiber, fiberglass, or bending exhaust tubing is the exact same for knock-off companies as it is for the big dogs... Why then does Amuse's fiberglass bumper costs thousands while everone else can sell it for hundreds??? The quality control may be better, but that doesnt account for a 300% markup. The answer must be larger profit margin.
2) The product is inferior to the original in terms of fit, quality, materials, etc... In this case, the original still has something going for it which makes it worth the premium. People to whom these features matter can still purchase the original. People that dont now have a more affordable option minus the features they dont care about. The people buying the latter would not have bought the former, so it isnt like they are taking sales away from the likes of J's or Spoon. The market will balance itself: this is the nature of capitalism. The consumer will dictate what lives and what dies.
Thoughts?
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