Building cabinets to sell.

[nickbuol]

As part of my Master's degree, I picked arcade cabinet building and selling as a topic for a business, marketing, and financial analysis.  On paper, things seem to be great.  The market research showed that a lot of people want a low cost, turnkey system, that is what sparked my interest in looking at building them myself as well.  I had seen that there was a demand, so all I needed to do was fill the supply, right?  Wrong!  I spent months working on various designs with a local millworks company to find the right product from a cost, assembly point of view, as well as one that looks great too.  IN the end, the cabinet looked very clean, but wasn't anything special.  It looked similar to about 95% of all of the upright cabinets people here have.  So it is a solid design, but nothing that says "Wow, that is a XYZ cabinet."  Anyway, I continued looking into the business end of it and what paperwork, fees, and so forth were needed, and then examined the marketing stategy and marketing formats.

My business partner (read, "the guy with the money") and I decided the first thing that we need is a full size, working prototype.  The design was a little different from my latest cabinet.  Not a lot different, but enough that mine couldn't be the prototype.  We started building it figuring that as a worse case situation, he would keep the cabinet, and we just woulnd't make any more.

Fast forward several months.  The prototype still isn't done.  Time is an evil enemy, and when we started building the prototype, we found that we were spending more time trying to figure out how to streamline the assembly process, that little actual construction would happen over the course of several hours.  We also had to create very details documentation as our business plan was to hire out the assembly process to some college students, or even high school. 

Anyway, to cut to the chase, in order to fit the niche market of a turnkey system that could be built for less than $1000 (including PC and 27" TV), we would have to hire super cheap labor, which means unreliable building.  We also had to make some serious modifications to the design in order to make assembly as easy as possible, again so that construction costs don't eat too much of the profits.  When we went back to people hoping to get some "pre-sales" to get the first few machines out the door, and get some money into our pockets to finance the whole project, the same people that said "That is awesome.  I would definately buy one." suddenly had one excuse or another for why they couldn't afford it, or whatever.

Long story short, it looked good on paper, but to hit that lower cost market is really hard since the only way to really get costs down would be to produce thousands of these a year, and the demand is simply not there for that.

I don't want to crush your dreams, but after seems a lot of cabinet builders come and go over the past 6 years, some getting further than others, I took a long, hard look at it, and started down the path to fill a gap in what is available only to find out that the amount of time involved, and the very small profit margin really isn't worth it.  That is why these other, established companies want $4000+ for their cabinets.  They know that it is hard to make a low cost turnkey and still make money to make it worth your time and efforts.

We even turned to making it a kit instead to get a lot of the labor costs out of the picture, but then you run into different packaging and assembly problems.  Add to ALL of these the tech support aspect, it is really difficult to make it all work.

Good luck if you do try it though.

[picasso]

I called Dynamo (Here in TX where I live) when I was looking for a cab and they said they were getting out of the cabinet business.  Not sure why but that is what they said.  They did not even have anything left from what they told me.

If you aren't selling them set up with games then you lose your business to the 1000 builders who ARE selling them that way.

Also, you don't have to BUILD anything. Just order new 6 button 27" VGA cabinets from Dynamo, add the computer and your custom marquee and you are done. 1 hour of work.

I have no idea why the high end builders are futzing around trying to BUILD cabinets for money, when they can buy factory cabs from Dynamo for like $1200.

[picasso]

I understand what you are saying.  (Actually my wife is a lawyer)  but,  I guess what I am thinking is to play the games unless you use Star ROMS etc..  They are probably going to download MAME and then either by downloading off the Internet or contacting a burner they are going to obtain the ROMS.  I don't see it any different then them seeing my cab and asking me how I did it then going out and buying a cab/control panel/pc and doing it themselves.  The are still using ROMS that are illegal whether I give it to them or they find them themselves. 

Lets be honest here, I have never burned DVD's but you can't tell me the majority of the people on this board have never played a ROM they have obtained either from a download or a burner that is not rightfully paid for by them.  If you are one of the people that have only played games that you have bought through STAR ROMS etc...  then I take my hat off to you.  (Moderator please delete if this is over the line)

One thing I have wondered.

[LiquidFire]

I understand what you are saying.

[Crazy Cooter]

Lets be honest here, I have never burned DVD's but you can't tell me the majority of the people on this board have never played a ROM they have obtained either from a download or a burner that is not rightfully paid for by them.

[quarterback]

Lets be honest here, I have never burned DVD's but you can't tell me the majority of the people on this board have never played a ROM they have obtained either from a download or a burner that is not rightfully paid for by them.

[picasso]

I agree with all.  I just had thoughts I wanted to see what others thought about them.   

Lets be honest here, I have never burned DVD's but you can't tell me the majority of the people on this board have never played a ROM they have obtained either from a download or a burner that is not rightfully paid for by them.

[paigeoliver]

Ok, if Dynamo doesn't make Jamma cabinets any more then you can order them from Asia.

Its the only possible way to come out with a decent/profitable machine. Building the cabinets yourself is way too labor intensive (not too mention the fact that it will be an inferior product unless you happen to have a factory).

[nostrebor]

The only way low end cabinet building works is if you do it exactly as Mr. Bubblehead said. You build because you love to build. Then your only real cost is material.

For example... I have built one cabinet on "consignment". It was for a specific trade that I would consider to be about a $200-$300 value. I only provided the woodworking, cabinet assembly, and fitting of some of the hardware. This made it absolutely legal and ethical to "sell". I made no money for my time, but woodworking is my primary hobby, so I really enjoyed the challenge of it. I had little cost in materials, as most of the materials were already standing in my shop. I did it because I enjoy building cabinets. I also made a new friend, and met a time and design challenge that pushed my envelope. It was a blast, and I got a killer dedicated game in trade.

I would do this again in a heartbeat.