Quote:
Originally Posted by tuzzio
But, its also not exactly common knowledge.
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It's not, but too many people think along the lines of a single transaction and don't look at it from the perspective of the seller, the distributor, the importer, or the manufacturer. All 4 can be separate companies, or all 4 can be the same.
Beyond that, people think in a timeline that is about as long as it takes for them to pay the bill.
Most manufacturers think in terms of years, and the costs associated with tooling + logistics (a catch-all for things like packaging, boxing, shipping to different countries, etc) add up very quick. Then you add things like a fluctuating exchange rate and it makes things very difficult from a planning perspective.
Case in point: the yen is trading at a 10-year low of close to 130JPY to 1USD. While this is great for US consumers, it also greatly affects how products are priced when trying to import into the Japanese market. This is against a backdrop of the yen being 30% stronger just last January.
Try pricing things out with a 30% swing in your cost structure in 12 months... it's so much more than just tooling, and most manufacturers of product think about 3-5 year horizons at a minimum to sell products.