I often find myself fantasizing about playing with the same toys the “big boys” use but for the life of me cannot fathom what on earth, other than maybe R&D time and intellectual property what would make a $25k difference between a V1 machine and a commercially produced one.
Sure the commercial machine will likely have more torque in the drive systems and more power in the spindle and sure, all the pretty cabinetry costs something to make but I’m sure a guy could beef up a LowRider for far less than $25,000??
It is obscene how one can inflate the price. But as you go larger, there is the extra zero added for accuracy and that is an exponential adder. We use servo motors for motion control where i work and we can spend upwards of $25k on just a motor or motor driver, so it isn’t always just fluff.
So look at the lr4, 500 to a 1k, depending on components, but now look at that machine.
IT is not hard to imagine the difference in cost. Also, if you build this one itself, we are not paying anyone for royalties, (Ryan!), on the name and production of the machine.
I am no good at actual business. The only thing I do know is the BOM is usually not a huge cost, labor is. Here at V1 the labor is minimal so the markup is minimal.
The diminishing returns surely kick in really early in an ice carver. How fast can you mill ice, there must be a fairly low limit. But it is cold, so maybe you can just keep throwing power at it and get tons of speed?
The other way I have always approached these situations, is in a production environment of any kind, how often is one medium speed machine anywhere near as efficient as 2-3 slow machines.
Do either of those videos look like they are all that much faster at material removal?
Another big factor that a large production environment is going to have to take into account is (failure rate/uptime/etc).
Lost profit from downtime can be way more than the increased price over the life of the machine.
Plus, do those prices include service agreements, warranty, etc?
All of that factors into cost.
I have a Desktop computer at my house that has been running fine for ~8 years. It’s performance still is better than the machine I use at work. I paid $1,800 for it.
My work machine is roughly 3-4x the cost, but if anything breaks on it, Dell will be here tomorrow with a replacement part.
As a company, we pay a huge premium to guarantee the employees can stay working with minimum downtime.
I presume you are dealing with similar things when you go into the big boy machines.
Plus I’m sure things like
Heavy-Duty One-Piece All-Steel Frame
carry a nice premium.
And let’s not forget about the extra upcharges for
Ice Bearing Upgrade w/Synthetic Oil
Food Safe Motor Oil
Food Grade Table
lol…
While $25k is a lot to carve Ice, I guess it all depends on how much ice you have to carve, and how much someone is willing to pay you to carve it for them…
To be fair I see it in a lot of things. Personal vehicles vs commercial vehicles, residential refrigeration vs commercial refrigeration etc. I just wonder how much of it is warranted and how much of it is because you’ve added the word “industrial” or “commercial” or “wedding” or “business” to the thing. And yes, I do get the staffing, overhead, insurances, support etc.
I’m a cheap ass though and always assume DIY will be the cheaper option (knowing full well with everything but V1 stuff that DIY always costs more
~7 months ago, before tariff stuff kicked in, the MPCNC TNG topic got me curious about Price vs Cutting Area, so I dug around and shared a snapshot of some commonly used CNCs in this post.
This topic got me curious on if/how things have changed. I initially went through each link to check if they still worked, many didn’t, so I fixed a bunch of links, and pricing… I noticed some companies are out of business, some have raised their prices, 15%-20% seems to be common. A few kept their pricing the same. Maybe I went through the sites too quickly and fluffed up, but Sienci may have reduced their pricing slightly. My effort was time boxed, so don’t trust my data for financial decisions…
(Chart is best viewed on a PC, but can Zoom in or out using mouse wheel, on phone/tablet can use finger pinch/stretch).
If/when I make a video about LR4, I plan to use this to help frame where LR4 sits in the CNC landscape, and the exceptional feature value it provides, while acknowledging the time/quality/support/features offered by “Pro” machines backed by larger companies.
IMHO, value goes up a lot when you ger more users. Everyone knows and agrees that economies of scale usually make the cost of something lower. But more users also increases the quality.
We would buy software licenses for software that few people would use. The per seat license was over $20k/yr for software. I worked at a small office owned by a huge company. So I would get excellent service. They were very happy to pick up the call whenever someone from my company called them. We bought a lot of their overpriced software. My company really liked how much they tried to save our time. We didn’t spend a lot of time in purchasing or renewing anything. If we got stuck on a technical problem, we had immediate service to get us past the wall. In the rare cases where we were stuck and there was no easy support solution, they had experienced experts that were willing to get on a plane and show up onsite to fix it for us (at $20k/week). This would be absurd for most private people. But when you are trying to deliver a multi million dollar project ontime, these costs are just part of the game. It’s all monopoly money to me. And truthfully, we passed those costs onto the customer and took a fat percentage on them too.
This company also bought things like MS Office at huge rates. But because those pieces of software were used by 90% of the US businesses, we paid a lot less and needed a lot less support. The software just worked. I’m sure we could have also called a human and paid for someone to get on a plane to help us. But we would never need that.
Meanwhile, we had a lot of open source software like Linux OS and ROS. We had smaller projects we depended on too, like Eigen, OpenCV, Numpy, etc. And some really small stuff that is probably hard to even google. The number one thing that predicted, “is this going to work?” was the number of users. We had just as much trouble (maybe more) with the $20k/seat software as we did with free projects like FreeRTOS.
That’s all very software oriented. But my impression for these huge expensive machines is that 1) They do have very expensive NRE (non recurring engineering, the engineering costs to develop something) and expensive parts. 2) They can charge more because very few customers really need something like that and they are not sensitive to costs. 3) If they manage to accidentally create something that 100x more people are willing to buy, they will not drop the price.
As someone who has designed products for commercial environments vs consumer, there’s a lot that goes into it and quite a lot of that isn’t necessarily direct product cost. That also varies significantly by industry.
Support - Commercial products are more likely to have a much higher support burden, needing longer hours and more ‘direct’ support than ‘e-mail here with a ticket and someone may get back to you in a week’.
Specifications - It’s pretty common for commercial gear to be specified much higher simply due to different assumptions about the usage environment. A home-gamer product might get used a few hours a week and full-time use 10 hours a day can easily be discounted as excessive wear and tear when it comes to warranty or expectations around failure. I know a few builders/electricians and they fall into one of two camps, buy a new Ryobi drill every few months or buy Milwaukee tools for 10x the price and expect them to last 10x as long. Same deal.
Scale - A lot of the products we think of as equivalent kinda aren’t… A company making and selling cheaper consumer level products may shift hundreds of units a week while a larger commercial company may shift single digits or tens. That costs a lot in terms of overhead because there are a lot of fixed costs associated with designing and making things. Every hour I spend designing something has to get paid for eventually. If I need to design something more carefully because failure is expensive then it takes longer but if we then sell fewer of them then the one-off design becomes a bigger part of the cost.
As a real-world example:
I design and sell LED floodlights for a commercial customer. These things are pretty barebones, they’re intended to run off 24V DC and are around 50W. They cost me more to make than it would cost to buy an equivalent outdoor rated LED floodlight. The difference is that the manufacturing is 100-1000 at a time so 20% of every order is fixed setup costs. I’m also assuming 100% runtime and in potentially hot environments with poor cooling, so I use 2x as many LED elements running at half power. It’s also a small, cheap component, relatively speaking, in a very expensive and complex machine so any failure in my product would be way more impactful than its price would indicate. All those things add significant cost but they also provide value. Small runs mean less capital committed and more flexibility to make changes/improvements. Conservative design means lower overall costs because they don’t need to account for adding extra cooling or needing fans in a design that needs to be hygiene washdown capable, etc. They get exact control over colour temperatures, CRI and output power with high confidence that none of that will change unit-to-unit.
A lot of those things look like a rort if you don’t need them, but absolutely don’t underestimate just how much delays, breakdowns and uncertainty can cost you in business. I buy Keysight test equipment when I can, despite it being ~4-10x the price of the cheap end of the competition. This is because it just works 99% of the time and there’s a clear/rapid support/service path when it doesn’t. It might cost $40k for an electronic load, but one single failure of a device we’re testing because the load overheated and unexpectedly open-circuited will cost around that. Having a cheap load fail and having no warranty would cost about half that in lost time and needing to get a 2nd cheap one, etc. I’ve worked with companies in the past that would rather have employees waste hours per week than spend a few hundred on better equipment. One company I consulted for I tallied the time spent hunting/asking people for tools to do my job and my consulting rate overall was vastly more expensive than a dedicated set of tools would have cost.
If I’m mucking around in my garage would I be buying new Keysight test equipment? Hell no. If someone’s paying me significant money to get a job done is it worth it to buy the extra? It depends, but often times yes.
Do not confused true establishment of what a product should sell for versus the price. I spent 30 years in product development and the only correct answer at pricing a product is what a customer will pay.
We used the term COG (cost of goods) which is what we paid for the raw material. New and unique products could fetch 10 times that COG plus labor etc. But other stuff we would break even. Some products with the major customers we actually just covered material cost. Technically losing money.
I appreciate your thoughts and agree. My only point is that if they can price it that high and people buy it good for them. We were always being low-balled by start ups that just wanted to get into the market. But that was part of the game.
Interesting example our first SLA machine (3-D printer) type was $800,000! And the resin was like $3,000 per gallon. And the first parts were so fragile they would break if you looked at them
Omg I am judging you! Judging with high admiration! You created a space with a group of incredible support people that are so helpful.
All for the love of creativity. The fun part of my job was creation but sometimes the customers which we loved getting their money made the job pretty hard.
But shutting a product line down like Cisco or Apple tended to heat things up. “Line Down” still gets me nauseous
I think I mentioned this before as I am putting my LR4 together I just think of it as a clever design we used to call “elegant, simply elegant”
I was trying to mount my YZ ends yesterday to the beam and had them all the way up. No way to get the screws in🤔
One of the big problems with tables like that is that it ignores labor. A fully built, squared, and tuned V1E LR4 would be $800 in parts, $800 in labor, plus $2-400 for the table. When compared against fully assembled machines, it would be more accurate to consider it a $2000 machine for comparison. (And I personally don’t think Ryan charges enough ). (I know this problem isn’t unique to the LR4. It would be common to all of the DIY machines.)
I am judging you! Judging with high admiration! You created a space with a group of incredible support people that are so helpful.
). (I know this problem isn’t unique to the LR4. It would be common to all of the DIY machines.)