In concept nothing. But do you also recognize a legitimate business model of selling multiple products at different price points, spaced out more than the different cost of production?
And speaking hypothetically with some stupid numbers is it your argument that they should be able to purchase the $20 product, add $10 of parts, and either use it or sell it as the $200 product?
Let’s say a raw memory chip, is $2 $4 and $10 for a 4gb, 8gb, and 16gb raw chip.
Let’s say the RPi Compute module are $50, $70, and $100 for the 4gb, 8gb and 16gb versions. From smallest to largest that’s a $50 price increase for a $8 cost increase.
Is that an ‘illegitimate’ business model? Honest question I’m curious where you’re at.
I think so, yes. It bases the business on “money milking” by staggering SKUs to maximize profits. “Cheap” one that is mostly useless, just to upsell the others. “Mid” one that is just okay. And “expensive”, that isnt more expensive to make, but looks reasonable here to really milk the money. “Usual” dark patterns these days.
Per your hypothetical:
Say there is some r&d budget A, production and logistics costs B, and SKU component costs Ci. Since we’re capitalistic corpo aimed at line go up, there is also D% margins.
rough math, per unit:
((A + B) * sku_1 / N**2 + C + 2) * D = 50
((A + B) * sku_2 / N**2 + C + 4) * D = 70
((A + B) * sku_3 / N**2 + C + 10) * D = 100
sku1, sku2, sku3 = number of sku units
C - cost of all other componentsN= number of unitsD=100% + margin%
Set D, A, B, C, N and you’ll see how they expect to sell their rpis, not based on “hey this is our proposal”, but based on “target this market, upsell this, and focus on selling this overpriced sku”.
But maybe they’re not evil, and they don’t want to tell you what to do, just a proposal and expected market. Let’s do a simpler situation. A per-unit equitable margin based business:
B - per unit logistics, prod costs (they are literally identical in every way except for ram chip)
D < 100%, added margin
(B + C + 2 ) * (1 + A + D) = 50
(B + C + 4 ) * (1 + A + D) = 70
(B + C + 10) * (1 + A + D) = 100
Merge B + C for brevity. 1 + A + D = M
BC = 50 / M - 2
BC = 70 / M - 4
3) BC = 100 / M - 10
=> M = 10, BC = 3
Oi. Margin of 900% (that’s some costly R&D) , but 3) is literally then broken. And then math does not math, with abstract bad numbers.
Let’s try more realistic numbers:
1G - 53
2G - 87
4G - 127
8G - 194
16G - 334
BC = 53 / M - R1
BC = 87 / M - R2
BC = 127 / M - R3
BC = 194 / M - R4
BC = 334 / M - R5
Now some data is missing for ram chip prices, or costs of components, but let’s just assume indeed BC + R1 = 53/M. I.e. they don’t purposely lose money on the shittiest sku. Ram prices are exponential. Say BC + R1 = 25. Which makes M around 200%. Wait, that makes 16G chip cost at least 120. Okay, about 2.5 times as expensive than the most expensive retail-amount chip I found on alibaba.
So math aint mathing, and money appears to be a floating imaginary point in petroleum integral support space.
In reality, their base tier SKU is likely a net money loss. Which is why they’re scared shitless somebody actually broke their dark pattern. The sales department is always right on what and how many should be sold!
In concept nothing. But do you also recognize a legitimate business model of selling multiple products at different price points, spaced out more than the different cost of production?
Yes of course, but if the spacing is too much then stuff like this starts to happen.
is it your argument that they should be able to purchase the $20 product, add $10 of parts, and either use it or sell it as the $200 product?
Yes, once I buy something it’s mine to do with as I want. Obviously warranty may be void in some cases, but otherwise I own it.
If the market exists that is willing to buy it as a $200 product then Raspberry Pi should sell them for that price, their costs would be much lower than someone who buys a Pi at retail, buys new RAM chips, spends the time to desolder and solder on the new RAM chips, market their ‘product’, and deal with shipping it. If the knockoff is $200 and the same-spec legitimate Pi with warranty is $200, the knockoff won’t be around for long.
Yes of course, but if the spacing is too much then stuff like this starts to happen.
agreed
If the knockoff is $200 and the same-spec legitimate Pi with warranty is $200, the knockoff won’t be around for long.
Supply and demand aren’t a black and white thing, it’s a sliding scalre.
More likely the knockoff will be $180 and comes with a knockoff warranty- we make it for $40 incl. parts and labor and sell it for $180, so if it breaks we’ll just send you a new one and we’re still ahead financially.
What if the knockoff isn’t $180 but is $80? Under that condition who would buy the $200 one? If the thing sucks you could literally buy a spare and still be ahead.
But in this case they are buying new Pis and modifying them, so their costs have to be higher than the official ones. It’s just weird to me that there is any market for that at all.
Their cost is higher than the official one, but they can still undercut the official one and make money. That’s why it works.
Personally I’m not aware of anyone actually selling these, so this may be a made up issue. Or it might be a case where they were sold on aliexpress or something.
In concept nothing. But do you also recognize a legitimate business model of selling multiple products at different price points, spaced out more than the different cost of production?
And speaking hypothetically with some stupid numbers is it your argument that they should be able to purchase the $20 product, add $10 of parts, and either use it or sell it as the $200 product?
The fact that it is economically viable to resolder different chips, is already showing it’s a illegitimate business model, imo…
Not a product, but a money grab
So hypothetically.
Let’s say a raw memory chip, is $2 $4 and $10 for a 4gb, 8gb, and 16gb raw chip.
Let’s say the RPi Compute module are $50, $70, and $100 for the 4gb, 8gb and 16gb versions. From smallest to largest that’s a $50 price increase for a $8 cost increase.
Is that an ‘illegitimate’ business model? Honest question I’m curious where you’re at.
I think so, yes. It bases the business on “money milking” by staggering SKUs to maximize profits. “Cheap” one that is mostly useless, just to upsell the others. “Mid” one that is just okay. And “expensive”, that isnt more expensive to make, but looks reasonable here to really milk the money. “Usual” dark patterns these days.
Per your hypothetical:
Say there is some r&d budget A, production and logistics costs B, and SKU component costs Ci. Since we’re capitalistic corpo aimed at line go up, there is also D% margins.
rough math, per unit: ((A + B) * sku_1 / N**2 + C + 2) * D = 50 ((A + B) * sku_2 / N**2 + C + 4) * D = 70 ((A + B) * sku_3 / N**2 + C + 10) * D = 100 sku1, sku2, sku3 = number of sku units C - cost of all other components N = number of units D = 100% + margin%Set D, A, B, C, N and you’ll see how they expect to sell their rpis, not based on “hey this is our proposal”, but based on “target this market, upsell this, and focus on selling this overpriced sku”.
But maybe they’re not evil, and they don’t want to tell you what to do, just a proposal and expected market. Let’s do a simpler situation. A per-unit equitable margin based business:
B - per unit logistics, prod costs (they are literally identical in every way except for ram chip) D < 100%, added margin
Oi. Margin of 900% (that’s some costly R&D) , but 3) is literally then broken. And then math does not math, with abstract bad numbers.
Let’s try more realistic numbers:
Now some data is missing for ram chip prices, or costs of components, but let’s just assume indeed BC + R1 = 53/M. I.e. they don’t purposely lose money on the shittiest sku. Ram prices are exponential. Say BC + R1 = 25. Which makes M around 200%. Wait, that makes 16G chip cost at least 120. Okay, about 2.5 times as expensive than the most expensive retail-amount chip I found on alibaba.
So math aint mathing, and money appears to be a floating imaginary point in petroleum integral support space.
Oh well, companies will be companies. At least when you buy a raspberry pi you definitely are not paying them to actually specifically reduce your capabilities, gaslight you without valid engineering explanations, and just continuing to try to extinguish an unending PR nightmare using your fancy SKU cash
In reality, their base tier SKU is likely a net money loss. Which is why they’re scared shitless somebody actually broke their dark pattern. The sales department is always right on what and how many should be sold!
Yes of course, but if the spacing is too much then stuff like this starts to happen.
Yes, once I buy something it’s mine to do with as I want. Obviously warranty may be void in some cases, but otherwise I own it.
If the market exists that is willing to buy it as a $200 product then Raspberry Pi should sell them for that price, their costs would be much lower than someone who buys a Pi at retail, buys new RAM chips, spends the time to desolder and solder on the new RAM chips, market their ‘product’, and deal with shipping it. If the knockoff is $200 and the same-spec legitimate Pi with warranty is $200, the knockoff won’t be around for long.
agreed
Supply and demand aren’t a black and white thing, it’s a sliding scalre.
More likely the knockoff will be $180 and comes with a knockoff warranty- we make it for $40 incl. parts and labor and sell it for $180, so if it breaks we’ll just send you a new one and we’re still ahead financially.
What if the knockoff isn’t $180 but is $80? Under that condition who would buy the $200 one? If the thing sucks you could literally buy a spare and still be ahead.
But in this case they are buying new Pis and modifying them, so their costs have to be higher than the official ones. It’s just weird to me that there is any market for that at all.
Their cost is higher than the official one, but they can still undercut the official one and make money. That’s why it works.
Personally I’m not aware of anyone actually selling these, so this may be a made up issue. Or it might be a case where they were sold on aliexpress or something.