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Small volume production and certification wouldnt make for a cheap product...Quote:
Originally Posted by Melbourne Park
Amazing how many want someones hard work for next to nothing... But then want it to comply with everything...
Why not design and manufacture your own version, have it certified, get your required liability insurance, and then sell them at a reduced price and dominate the market? If thats what you believe. ;)
I can go down to ARB and buy a whole kit for a 150 Prado, that is the steel that attaches to the chassis, have it all installed, have the electrics all installed, for under $1,000. Uninstalled, that whole kit is a bit over $700. Telephone price too - I just rang my local ARB to check.Quote:
Originally Posted by Tombie
However - Land Rover have already installed the tow kit ... IMO the Mitch Hitch is in practical terms an extension to the current tow setup . Its a small unit, is one piece, and uses few materials.
I think its great that Mitch have made a good product, and it's good to know if something goes wrong, they are covered (from what you are saying about their insurance). Its much praised, and at Australian Off Road, the owner there recommends the Disco and also he uses a Mitch hitch. But his company also says the standard LR unit does the job just fine.
But no wonder its so costly to make as you indicated - but actually, its hardly marketed, and they seem to keep minimal stocks. And stock levels have a huge impact on prices - just ask GOE about that with their wheel pricing. And if it is made in small volumes (which is typically a job shop type operation high on the learning curve and can be quite efficient with a good setup) then why does one need a grinder to have it installed? That does not indicate that its being designed for current vehicles or that its being manufactured properly.
Its almost as if we should be honoured to be allowed to buy one, and we should put up with having to install it with a grinder in hand. I wonder what that would do to any warranties and insurance/liabilities?
I just think the Mitch Hitch price is reflective of some aspects of operating a Land Rover. You are told either "do it yourself", or pay a high price.
Doug, you may have missed my clarification post the other day regarding the grinding? I've pasted it here...Quote:
Originally Posted by Melbourne Park
"Just a clarification. The grinding is only to the inner surface of the vehicle's recovery eye casting. The surface is rough due to the typical defects you get with a simple casting. However, the eye is fitted with a poly bush for the Mitch Hitch. You are basically just cleaning up the surface so the bush fits neatly."
Cheers,
Scott
The grinding is a non issue. We are talking about attaching a device to the vehicle which requires no permanent change to the vehicle - it can be removed returning the vehicle to stock which, is one of the things people like about it. It re-purposes the cast tow eye and likely uses a standard sized bush to fit in the eye. Obviously a snug fit between the bush & the eye is required, you don't want any slosh in there that's for sure. The fact that Scott has decided to very slightly smooth out the inner diameter of the eye to facilitate installation is not relevant.
As to quantities, One word.... DEMAND. Why would he over commit on inventory when today's businesses operate so close to the wind. They are all focused on maximising the efficiency of their operating capital (likewise for GOE).
We as LR owners are typically grateful for businesses which invest in making these kinds of products for our vehicles. Most fabricators focus on the high volume brands where they can quickly recoup their development costs and don't bother with LR at all. So, when one does it is appreciated and supported and we understand that the product will typically be more expensive due to the lower volumes. Without them we would be stuck with cars on 19" rims pulling around vans while ploughing the country side amongst other things.
Constant references to other brands in this context is not useful. I don't see the point in discussing it, we are not privy to what the contributing factors are to the cost - the price is what it is. Either it presents value to the potential buyer or it doesn't. If it doesn't...move on.
So you telling me the Prado kit uninstalled is just over $700 dollars.Quote:
Originally Posted by Melbourne Park
Hate to tell you the Land Rover D3,D4 or RRS kit uninstalled is around the same price.
I notice you make reference to the landrover item being smaller or fewer parts then the Toyota equivalent. This is irrelevant really as chassis set up are different and the attaching process' are very different on these cars. The Landrover hitch is smaller but thicker for one, sold in lower volume which increases cost and when compaired to the Toyota as demonstrated they are roughly the same price.
Judging by your comment on grinding, you actualy dont understand the mounting process either so its very hard to be critical about this. Sorry this may come across as rude but still needed to be said.
This is just my opinion, if you believe right or wrong, that is fine. but I think $700+ for what the Mitch Hitch is makes it expensive.
Everyone is different. When you buy something, if you see the value in it, you will pay the price, but generally up to a point that you don't see the value any longer.
$500 - I'm all over it.. $600 I'm starting to question it, $700 I'm thinking its too expensive.
I bought a Mitch Hitch, but waited and found a 2nd hand one, at $500.. which I was happy to pay.
again, just my opinion.
Dan
That's it exactly! I wish I could buy one used too ...Quote:
Originally Posted by Silvo
And Lambrover - no worries. I deserved much worse! I appreciate your refined manners and gentle approach. And I am being a bit controversial ... but I have looked at prices overseas for tow kits, and in some countries, the Disco tow kit is an option. Those kits have the bars and horizontal metal pieces that look similar to what a Prado gets. So I think that with a lot less pieces, it should cost less.
And I have done some research now too. Originally, people with D3s who towed - such as those towing Bushtracker vans - bought a tow hitch from South Africa, and later, Mitch came out with their's, and that stopped the South African unit, which very much resembled the better Mitch product. So, Mitch IMO looked at the various solutions around and then designed their's. That's what free enterprise is all about.
Land Rover also offered a replacement hitch themselves, which had less of a plough and allowed the spare tyre to be removed - and LR sold that for $600. When the Mitch Hitch came out, it too sold for $600.
As far as the costs go, and the R&D, Mitch said that they spent 9 months and a few hundred man hours to arrive at the unit.
Here are some guesstimate figures that I did to evaluate the costs.
Man Hours 350
Gross Salary 86,766
R&D Labour 14,600
Materials 2,000
Total 16,600
Original Price 600
Material Cost 50
Labour 50
Total Cost 100
Sale Price 600
GST 60
Less GST 540
Less Cost 100
Less Retail Margin 108
GP 332
Development Cost 16,600
Numbers to BE 50
So, for development time of 350 man hours, an $87,000 employee cost, the break even point for a $600 retail price would be selling 50 hitches. If they were sold direct at first (they probably were), then there would have been no retail margin cost, and the break even would have been 38 hitches. Note too, that the development cost would be a "sunk" cost. In other words, the person who did the work, was a current employee, and hence the cash flow would not have been altered by working on another new product.
As far as insurance issues, those would not increase, they'd be part of the overall businesses cover.
I'd suggest that now, the margins are higher, and the product is a very nice cash cow. It could easily be sold for $500, but then if they pulled the price down, sales likely would not increase. So instead its slowly going up in price.
As far as I am concerned, its not good value ... except if I go off road and knock my LR one around. That may weaken the LR product, causing it at one time to fail and lead to a disaster. It surprises me that LR don't do it properly themselves. What Toyota does, is offer a factory solution when you buy something from them. For instance, the tow pack for a Prado is made by Hayman Reece. IMO LR should have contracted with a company such as Hitch Bros, and supplied a decent solution, for lets say $500 when you buy the vehicle. When I bought my D4, the Mitch product wasn't available, the web site was frozen, so I paid $185 for a LR tongue. So that ups my cost if I pay $730, to $900 odd plus I'll have to have it installed. Its one area where the 200 series is much better ...
Doug
What Toyota does is offer a dealer solution...
On a comparatively basic product, fitted to an even more expensive vehicle... Sold in far greater volumes and yet the same price :cool:
This really is an Apples and Oranges comparison you are making Doug....
As for your back of the envelope "Dev cost" vs "Margin"... Kind of rude isnt it?
What margins do you expect a manufacturer to wait?
How long do you consider recouping costs to be acceptable?
I've stayed quiet on this for a while, but ........Quote:
Originally Posted by Melbourne Park
You have no idea what costs a particular business faces, or problems, or market solutions. Yet you continue to school us poor businesses from the back of your envelope on what we're doing wrong, how we should expand into national/global/universal entities etc etc
I'm still a little shocked that you saw fit to keep me on the phone for 10 minutes to explain to me what I'm doing wrong with my business (and misquoting me here on the forum about cost structures for the rims).
Some of us do not WANT to be overlords of the after-market industry. We make bespoke products (and only a few of them) for a brand we love, and to help out fellow owners. We typify the "cottage industry" approach. We deal with the fact (and most of my clients seem to understand) that Toyota outsells Land Rover in Australia by MORE than 20 to 1. No small business that caters for a unique Land Rover requirement can ever hope to compete on turn-over or price.
Continually braying about what Toyota does, what Toyota adds, what Toyota charges, is immaterial and bordering on insulting. You cross that border when you start to tell me and other small manufacturers how to run our own businesses.
Gordon
Well said Gordon.
I consider the cottage industries serving LR owners to be very fairly priced... Considering the market size.
Those who aren't happy - go out on your own and make a product - works for me! And of its good enough you may sell a few...