Member
Does anyone know why they can't follow Econ 101 and raise the prices so demand and supply can reach an equilibrium, without asking for donations? Or, if demand is so good (and they can prove it), shouldn't a business loan for capital investment be the way to go?Originally Posted by Mark Maleski
Simon
Member
That's what I was wondering as well. A legit business shouldn't be asking for donations. More business than you can handle is usually a good thing in the business world.
Member
Usually brought about by bad management and "can't see the woods for the trees" syndrome that most long lived businesses suffer from in one form or another.
Chris
Everything I like is either illegal, immoral or fattening
Contributor
I tend to think that the demand for rasps shrinks rapidly as the price increases. Otherwise I would expect that they would have already raised prices. Given the large number of alternatives to their product, I can certainly see why they chose a path of retaining their demand and their pricing.
I've often thought this way about Japanese tool makers as well, but I've come around to thinking that likely they prefer the assurance of endless work over the optimization of their pricing at current demand. They chose a pricing model which allows demand to build to the point where they have a significant backlog for that purpose.
The secondary market is where we can test this idea, of course people buy their products (handmade Japanese tools) and immediately turn around to sell them and likely find that many people are often willing to wait rather then to spend slightly more. I believe this is due to the fact that the demand drops off rapidly as the price increases beyond the expected prices. Japanese tools only tend to increase greatly in price when the maker is no longer available at any wait (retired). Kinshiro marking gauges are an example, they're easily 3x the price of the next best alternative and yet when they're made available to the market they're usually scooped up immediately.
Last edited by Brian Holcombe; 09-05-2018 at 10:00 PM.
Bumbling forward into the unknown.
Member
I checked on the Auriou website earlier this week. The fundraising has exceeded the goal and I think the appeal has been taken down. So the self righteous need no longer fret about it.
As it happens, I met Michel Auriou in 2011. I had a nice talk with him about chisels and would judge him extremely knowledgeable. The same day I talked with three different Lee Valley representatives, also about chisels. (They had prototypes of the new chisels). It was a huge contrast to Michel- it was as if they had never used chisels before. Like I had a language barrier with the Lee Valley people , none with the Frenchman.
Member
Why such a crowdfunding campaign ?
We kindly ask for your support because the future of our craft and the future of our company is at stake.
The team skills has reached a good level thanks to the management huge efforts over the past years and needs to develop even further.
The company basis is now built and sane.
The team is trained, in place and is increasing every day in efficiency and in production quality. Customers knock on the door and we cannot properly supply the demand.
The company break-even point is now reached.
The only point we need to clear is the lack of company cash.
Our first goal is to reach the €40,000 line. This amount represents about one month cash flow and must be achieved for the company continued activity. Basic material supply will be seriously eased.
Should €50,000 be reached, we will be in a position to renew and enhance our forging machines as well as our thermal processing tools for better productivity. We will also be in a position to release a much better and attractive internet website.
Finally, if €60,000 cash amount is collected during this campaign, the company will be in a position, in addition to the first two achievements , to further develop the production tools and processes in order to meet a strong and raising demand for wood sculpture tools.
https://www.youtube.com/watch?v=0G1xkTrm0pM
Member
Price sensitivity certainly exists, but I do not recall this particular rasp manufacturer changing its prices to the extent that it suffered from a huge loss of demand. In general, buyers of luxury goods are often less sensitive than buyers of everyday items, and his rasps are by no means everyday goods. Machine-cut rasps are not his real competition, either.
Still, even if hand-cut rasps are very price sensitive, it is possible to regulate demand (which is alleged (claimed?) to be the cause (symptom?) of trouble for that company) by gentle pricing adjustments.
Simon
Contributor
If they could simply raise prices and resolve every issue, I'm sure they would have done so.
I don't see any reason why the approach they took was anything other than a viable solution. They raised financing without incurring debt, decreasing demand or otherwise adversely effecting their operation and are now able to immediately apply the new capital into their business to improve their product and further increase demand and supply as well from the sound of it.
Bumbling forward into the unknown.
Member
Nothing in the public domain suggests they have even tried.
As the outcome of their fundraising is positive, we can only hope that they have found the long term solution to their problem.
Simon
Member
Seeing this is not the first time they have resorted to this I doubt the solution is long term. I would be ashamed to put the begging bowl out as they have done, doing that shows that either the business model is not viable or they are bad managers or perhaps both. Imagine someone like Kodak doing the same thing, they would have been laughed at but except in scale there is no difference. I have had more than one business and cannot believe the audacity of begging for money to keep it going. I know it is a hard nosed view but I was taught that a business is supposed to survive by making a profit.
Chris
Everything I like is either illegal, immoral or fattening
Contributor
Not so loud.....next thing you know...Sears will be doing the same thing....
Member
81160 SAINT JUERY
France
Tel +33 (0) 5 63 45 53 64
www.forge-de-saint-juery.com
Member
Apparently, they were smart enough to skip the Econ 101 approach and go to the Econ 423 solution and raise the capital with no debt and no stings, it seems like they showed Econ 101 for what it is, a class in Macro Economics for wide eyed 18 year olds.
The intelligence of this approach remains to be seen and the long run will bear out whether they have the proper business plan in place to make efficient use of the infusion. My guess is the bulk of the donations came from (more or less) local patrons who are interested in helping a local and historic business.
Of all the laws Brandolini's may be the most universally true.
Deep thought for the day:
Your bandsaw weighs more when you leave the spring compressed instead of relieving the tension.
Member
Does Auriou make (wood) chisels? Couldn't find any mention of this on their site, but you got me curious as to what sort of chisel they would make.
Member
Auriou does not make bench chisels and I don't think it is high on their priority list. However I think they would be in a position to make a traditional chisel, something along the lines of an old Cam or Butcher or Peugeot Freres.
Some of today's manufacturers are just machining chisels rather than forging. Machining allows one to use labor with much less skill, but it limits the design and the types of steel that can be used. Some don't machine well. I think Auriou is committed to traditional design and a skilled workforce.
Last edited by Warren Mickley; 09-06-2018 at 11:20 AM.
Posting Permissions
Reply With Quote