Author Topic: Bargain Culture  (Read 1702 times)

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Offline TimG

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Re: Bargain Culture
« Reply #60 on: December 09, 2017, 05:26:56 am »
Why?  Are you clinging to some outdated notion that a "company" has to be a big brick-and-mortar building with a factory and a whole bunch of employees?
The need to generate recurring revenue from existing customers is a imperative for any business today no matter what their distribution model. These guys have one product that they sell cheap and provide no added value other than price.

If they establish that there is a market for cheap cameras then the market will be flooded with me-too competition and they will find that building a brand based on being cheap means your customers are very quick to switch to the guy you sells the same thing for dollar less. A 20 dollar camera does not provide a lot of revenue to justify premium service.

Kershaw sells these $7 knives for $40+ in North America... what value are they adding to justify a 500% mark-up?  Nothing, basically.   Anker, Wyze, and Monoprice are all adding value to the Chinese raw materials to make their business model work.
This is a completely different business model because they are charging premium prices to cover the cost of warranties and other things that build brand loyalty. The Wyze business model is based on selling cameras cheaper than everyone else.

It is worth noting that Vizio televisions use the Wyze model. They have carved a niche for themselves branding Chinese made televisions and selling them cheaper than everyone else. And guess what: they got  caught selling data collected from their SmartTVs:

I guess they realized there are limits to how profitable a company can be selling cheap hardware and Vizio has the advantage over Wyze in that they selling products with a price point in the hundreds of dollars.
« Last Edit: December 09, 2017, 06:53:07 am by TimG »