pricing


A few days ago, I posted an entry questioning the high prices of Funkin Function’s scrap wood skateboards, and its adverse impact on the acceptance of eco-friendly products.

After that, I got an email from Daniel Moyer, the designer behind Funkin Function. He has agreed for his email to be reproduced here, so that readers may understand his side of the story.

Below are the main excerpts from his email, along with some of my thoughts:

Your only mistake is in assuming that I am a manufacturer. On the contrary, I am a one-man one-at-a-time furniture maker using the scrap from my furniture pieces to make similarly artistic longboard skateboards.

Each board is composed. Stock is arranged for visual statement and for physical characteristics that might contribute to the natural flex that makes these boards so nice to ride. Then I thickness plane, joint the ends. biscuit for reference, glue-up, rough sand, shape, mill for truck-mounting, finish sand, wet-sand-in a slurry coat of oil, buff off the slurry, and finish with a few coatings of hand-rubbed oil.

A one-man operation (OMO) like Daniel Moyer’s is still a manufacturer. But I see his point that he does not have the economies of scale. These skateboards are more akin to works of art – hand-crafted and one of a kind.

As a business model for manufacturing, this is a disaster. I’m not on a green mission; I’m just trying to be responsible with my own waste stream and make a wage from my time.

As a businessman, Daniel Moyer is entirely justified in pricing his product at what he considers to be a fair price. His rationale for the high prices is that his skateboards are entirely hand-made and artistic.

Where we disagree is what that price should be: his costs of production are low, and after taking into account the amount of manual work, I feel that he could still turn in a healthy profit even with lowered prices.

I realize that being thrust into the eco-spotlight by the BKLYNDESIGNS coverage leaves me open to whatever criticism I have coming to me. However, if someone were to imply I was seeking to milk or even bang the buying public while flying the green flag, I would find that most insulting.

I had never intended to imply that Daniel Moyer was taking advantage of the eco-conscious customer.

My point was that eco-friendly products should be more attractively priced to attract mainstream customers. Pricing them too expensively might actually slow down the green movement, as it creates a misleading impression that green goods are only for the rich and privileged.

And if the product is not intended to be positioned as a green product, then why not play down the “scrap wood” and promote the “hand made” and “artistic” parts?

There, I hope I have given a fair account of both sides of the story. Feel free to tell me what you think. 🙂

This may sound a bit odd coming from a manufacturer of eco-friendly bamboo flooring, but you really shouldn’t be paying over the top for eco-friendly products.

I have discussed this issue before. It is perfectly understandable if prices are higher due to higher costs of manufacturing. But we have to ask ourselves, is it a fair price?

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There are many ways of going green.

For example, you can choose to buy energy-saver light bulbs to replace your old incandescent bulbs. Or you could use energy-efficient versions of electrical appliances that typically would suck up huge amounts of electricity, e.g. refrigerators and air-conditioning units.

These products might cost you more to buy, but will cost you less to use. So they will save you money in the long run. Savings cents definitely makes sense.

However, there are other ways of going green which will not save you any money. In fact, it might even cost you more.

There are many wonderful items made from recycled and reclaimed materials. Buying them consumers less resources and reduces the impact on our environment.

RagaDog

But would (or should) you spend US$52.95 on a soft toy made from old sweaters?

Or an eye-watering £1,500 (US$3,000) for a rocking chair made from an old cinema seat?

Now, why are they charging such high prices? Is it because of:

1) high cost of materials?

Unlikely, these are recycled materials after all.

2) high cost of labour?

Maybe. Incorporating recycled materials into your products is an hands-on affair and mostly eschews the use of machines.

3) low and inelastic demand?

This would be my guess. Such products are very niche, finding willing buyers in a miniscule group of people. However, they are usually able to pay the high asking prices. Faced with such a market, it would only make financial sense to demand more for your green products.

Bamboo flooring is also a green product. So why are we not tapping into this niche market and charging high prices for our products? After all, I have come across bamboo flooring companies who charge 30% more than us for the equivalent product.

Even though the costs of producing bamboo flooring is higher than simply chopping down trees and milling the logs, my aim is to price them to wooden flooring as closely as possible.

My hope is that one day bamboo flooring would no longer be considered a niche product for the eco-conscious consumer, but a mainstream product that everyone could enjoy.

High pricing would automatically discourage the typical consumer from considering it or even finding out more. We would have missed out on the chance to educate and inform them about the benefits and beauty of bamboo flooring.

What a pity that would be.