You shouldn't compare the time and effort spent on a prototype with the price for the actual product. You don't pay a couple of million dollars (if not billion) for a car either.
Sure it will take some investment to build a cab at first, but surely these people built a cab before already. Building a second cab based on an existing design takes hardly any time and if you do this routinely you can have all the woodworkign done rather cheap. Putting a cab together won't take more than a day or two.
If you order a custom built cab (build to your specifications) then maybe $4000 would be realistic, but if it's a "mass" produced cab by someone who probably runs a "company" from his basement (read no investments in office and such) they should be able to sel a simple cab like this for $3000 and still make a huge profit.
I really have to respectfully disagree with a lot of this.
I am unaware of any business that doesn't price it's R&D into its product prices. I am sure that at least a thousand dollars of a $50K SUV is recovering R&D. And that is selling
millions of cars.
I am starting a small business part-time and expect to sell 5-10 custom ordered cabs per year next year. I built my first project cab and it probably took 80 hours. In addition The original time spent reseaching on the 'net was easily 50 hours.
As far as time spent building a new cab, I am building another, new design that I expect to take about 40 hours. The cabs after that will probably take about 35, but without a factory I will not get much more productive than that. Putting togeter a cab in a day or two is a fantasy. You could assemble the cab 'box' itself in that time, but there is no way you could build a good qualtiy cab start to finish in that time. If you want a sellable-quality end product you need to take time to do it right. You also need to spend 7-10 hours on ordering parts frorm at least five vendors, a few trips to Home Depot, and going to the glass shop.
My cabs will be somewhat differentiated from others. They will include almost all of the ROMs from StarRoms, licensed to the buyer's name. It will be delivered to the buyer's home if local, and will have text on the Marquee that is customizeable. I will probably include a few hundered tokens with the mechs adjusted for them. I will be available to consult on the installation of other softeware or ROMs that the buyer might be able to legally obtain.
I live in a fairly affluent area {edit: on the wrong side of town, however
} and there are some of my neighbors wouldn't flinch at paying $4-5K for this total package. They have no idea about ebay, and even if they did would probably pay more not to have to deal with the risk and inconvenience of ebay. When they look at a Galaga/Pac reuinon for $3k at Brookstone compared to mine that plays 80 games out tof the box and is capable of 4000 more, it isn't a stretch at that price.
And "Huge Profit" is a relative term. If one make a thousand dollars off of a $3000 cab, after taxes one would have netted a lot less. Personally I highly value my spare time because that is the time I spend with my family. The 40+ hours I didn't spend with my wife and kids is worth at least as much as the after-tax profit under a $3000 pricing structure.
So in a nutshell, If the marketplace where I live will support my pricing, I will make money. If it does not, I can build cabs with my stocks of materials and sell the cabs for at least as much as I paid for the parts and get out of the business without a loss.
It's all about to whom and where you are marketing. You notice I am not marketing here or on Ebay. I am well aware that those probably are not doable for me.
But I still say $8k is a stretch by any measure.
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