Price Increase

[JWheaton]

Originally Posted by Dimis

Theory of Progression - See Rod Knock's explanation above.

I did... does not work real well!

No... Not quite! This would only be the case if ERA002 was desired, & that may be the case in time if ever the boys in New Britain ever closed their doors, but unlikely otherwise.
I would assume that used Factory Five cars being a dime a dozen would not improve in price, regardless of any progression in other makes.

What makes and ERA or Factory Five not desirable???? They are all still limited production cars. You are assuming an exclusivity to a Kirkham?

Yes, that's true, but watch how the used Kirkhams will follow up in price, because ultimately a Kirkham new or used is a desired commodity.

Economics 101 - Supply (Kirkham - limited) versus Demand (desire to own - high)...

Please retake your economics course.

Demand refers to the amount of goods and services that buyers are willing to purchase. More often then not as price goes up demand goes down! Supply refers to the amount of goods and services that sellers are willing to sell. Here the opposite occurs of demand. When supply will usually increase with an increase in price.

[Dimis]

Originally Posted by JWheaton

Nice theory. Don't think that it will really hold up well with a car... If the theory worked on all goods then what an amazing world we would live in. Everything in essence would turn to gold and prices would sky rocket....

If you don't think so, then explain to me, in your own way inflation, like I'm a 5year old.

[JWheaton]

Originally Posted by Dimis

If you don't think so, then explain to me, in your own way inflation, like I'm a 5year old.

Sure - Inflation is when the lollipop you want increases in price and the nice person that unwraps the lollipop increases the price of that service provided to you.

So the Kirkhams increase the price of their goods.

That does not necessarily equate to an increase in cost of a used Kirkham!!!

[fordracing65]

Your both right. If the price of creating a new Kirkham goes up, you could assume the cost to buy a used one would cost more for the simple fact it now costs more to creat one, but seeing we live in a capitalistic society the used price could go down if demand does. It works both ways, I say a used kirkham is worth more now, just like a new roller costs more now.

[RodKnock]

Originally Posted by JWheaton

Others have mentioned that the supply is limited. Which is true. The demand is limited as well. The demand will be even more limited with the price higher. It all evens itself out.

If demand were limited, then why would the Kirkham's raise the price by 22%? I would argue that they're probably trying to limit demand, by increasing the price, because there are many more orders than any one else thinks.

The same issue will be played out with the CSX's too. They've raised their prices as well.

Ultimately, time will tell. At this point, we're discussing theories.

[xb-60]

If the price of a new Kirkham goes up by 22%, then yes some of the people considering placing an order at yesterday's price will say 'fair enough, I'll pay 22% more, no worries" but some will just think that the price rise puts them out of the new Kirkham market, and they start looking at the used Kirkham market.
So .... more people looking at used Kirkhams, demand vs. supply, and the price of used Ks goes up....doesn't it?
3 x Cheers! for capitalists
Glen

[Trueoo7]

What about "quantity" and mass production? If you raise the price you ultimately lose customers. If you increase production you bring down the price and increase customers much like TV's.
When flat screens first came out they were a fortune (ex. 52" TV cost $2300 two years ago, same TV now costs half of that because production increased which brought the costs down) Quality is as good, if not better than original.

So their price increase doesn't necessarily make them more money, it probably keeps them flat or their head above water because they have decreased their potential customer base by putting their product further out of reach for another 25% or so of society.

[392cobra]

It always amazes me how folks identify so much with a product that they think they run the company.

[Dominik]

Originally Posted by mreid

Why do they have a need to explain their price increase?

They didn't, we did ;-)

[Mark IV]

Originally Posted by Trueoo7

What about "quantity" and mass production? If you raise the price you ultimately lose customers. If you increase production you bring down the price and increase customers much like TV's.
When flat screens first came out they were a fortune (ex. 52" TV cost $2300 two years ago, same TV now costs half of that because production increased which brought the costs down) Quality is as good, if not better than original.

So their price increase doesn't necessarily make them more money, it probably keeps them flat or their head above water because they have decreased their potential customer base by putting their product further out of reach for another 25% or so of society.

"mass production" is an oxymoron when talking about production levels that we are seeing in the "Cobra" industry. The ecomonies of scale are almost non-existant at these levels of production. People, this is not GM we are talking about!

The price increase probably only brings them closer to where they need to be, indeed most all of the "bigger" players in the business have recently increased pricing (Kirkham, Shelby, SPF, etc.) in an attempt to recover some of the margin they have given away over the last few years in a attempt to keep some sort of sales volume alive. Indeed most all of the manufacturers have held pricing over the last few years in an attempt to generate sales and perhaps at least stay in business. While it might keep you alive, it does not keep you healthy.

As to "pricing out of 25% of the market" you cannot aim your product and business plan at a segment of the population that really can't afford or justify owning your product. Could Kirkham sell a buttload of cars at $9,995.00? Sure! But what does that do to the long term value and moreso the long term business plan? Most of the "Cobra" manufacturers are amazed that the market has still not yet been saturated and that there is still a decent sized market to sell to. In marketing there is a "sweet spot" where the price to volume curves intersect and I think most of the manufacturers believe they are now at that point. I know for a fact that I could sell more SPFs at a lower price point but for how long? When the factory is out of business so will I be....there must be a little bit left for all when the bills are paid, otherwise why bother?

[PANAVIA]

In working with Thomas on various things and reviewing the section of the Cobra market - held by the Kirkham produced chassis, I am pleasantly surprised every time we interact with them and their products.

It is all about whatever flavor of Ice-Cream you like and want. - for some folks, they are just happy with the grocery store brand of vanilla , and there is millions of gallons of that stuff sold each year.

People tell themselves it s about affordability, but it is really about something else. For some, it may be external pressures, it may be spousal restrictions or some sort of internal budgeting of resources.

You may explain it to yourself and rationalize. Sure, you can pour a bit of creme-de-menth' on it for effect.

However, if you have the opportunity to break free and get to a place where you can acquire a pint or two of nicely done butter pecan, or new york super fudge chunk then you will never want to go back to the Lucerne Vanilla if you can help it.

69K for The kirkham flavor is well worth it, they were under market at 54K -- shame on me for not getting one sooner.

Afterall you can pay more for less in many places, - but Kirkham is not it.
You definitively get what you pay for - and then some.

not to mention piece of mind.

Some folks want to "build" their car, others want to construct , others want to assemble.

Bottom line ; whatever flavor of Ice Cream is your favorite, go for it - !

Steve

[Dimis]

Originally Posted by JWheaton

Sure - Inflation is when the lollipop you want increases in price and the nice person that unwraps the lollipop increases the price of that service provided to you.

So the Kirkhams increase the price of their goods.

That does not necessarily equate to an increase in cost of a used Kirkham!!!

Ok, so continue to explain to me, like I'm a 5 year-old:
What happens to the price of all the other lollipops?
Do they not creep up in prise also?

Further, keep in mind your not talking about a "made in China, Walmart special" here.

[Dominik]

Not necessarily but the other lollipops may lose flavor :-)

[mreid]

Originally Posted by Dimis

Ok, so continue to explain to me, like I'm a 5 year-old:
What happens to the price of all the other lollipops?
Do they not creep up in prise also?

Further, keep in mind your not talking about a "made in China, Walmart special" here.

Whew! Glad to hear it's not from China. I don't want lead in anything but my pencil!

[RodKnock]

Originally Posted by Dimis

Further, keep in mind your not talking about a "made in China, Walmart special" here.

Well, that's not entirely true. Costco, not Walmart, did offer an Kirkham once upon a time:

KMP @ Costco?

BTW, back in 2004, the Kirkhams did offer a "$39,900 Blue Light Special":

10 Kirkhams for $39,900 each