[TenTec] Re: 516 Price in Perspective

[duffyb01@fuse.net]

A nice analysis, but it is not totally accurate.  The government's inflation calculator does not take into account the growth in manufacturing productivity over the same period.  For example, the price of a product should come down over time as productivity increases (assumes no increase is raw material costs).  To take this further, if there is inflation, the inflationary costs increases are somewhat offset by the tremendous increases in productivity that have occurred over the same time period.  While not perfectly balanced, you can't say that the sale price of a $300 radio would equal $1,200 today.  Maybe the retail price over time would be actually be closer to the original selling price. 

A perfect example of this is stereo equipment, CD radios and the like.  30 years ago a good CB radio (if there is such a thing) would sell for around $400.  Today it retails around $100.  A good stereo receiver sold for over $1,000 thirty years ago...now you can get something similar for under $400.

Let's focus a bit on the Argonaut.  The models in past years were more labor intensive than they are today.  Because of technology, the new model uses far fewer components.  Therefore in 2002, the retail price is not totally based on what the radio cost to build, I think it is based upon what TT thinks they can get for it.  The projected retail was originally $595.  I suspect it costs them less than $200 to build each radio (in quantity).  Then the target price went to $695 and now $795.  Why? Because we all talked about it so much and told them we want it and can't wait to get it, ect. Under the law of Supply and Demand, they think that we will tolerate the price increases because the demand has increased.  Had we all cried foul when the price kept going up, and did not put in the advanced orders, TT may have brought the price back down to reality.

Another example.  Yaesu is coming out with the new 897 (I think that is the model number for the new 160 to 440 rig).  So I asked their VP of sales "how much?"  He said they did not know yet, and asked how much I thought it was worth.  I told him and he gave me a range of $1,100 to $1,400.  The retail price is not directly related to the cost of manufacturing, but is more directly related to demand and what the marketplace will tolerate. 

Regards,

Duffy - WB8NUT

> Like some readers of this reflector, I was surprised
> when the price of the new Argonaut V model 516 was
> announced at $795, particularly when the Ten-Tec site
> had earlier given an estimated retail price of $695.
> As some others have done, I decided to get some
> perspective.
>
> At the Unofficial Ten-Tec web site
> (http://www.qsl.net/tentec), original retail prices for
> the 505, 509, and 515 versions of the Argonaut are
> given; at the W8KC Virtual Ten*Tec Museum web site
> (http://mywebpages.comcast.net/W8KC/lineage.htm), the
> starting year of production for these models is noted.
> With this information, I went to the Bureau of Labor
> Statistics web site (http://www.bls.gov/cpi) and used
> their "Inflation Calculator."  This handy device allows
> you to input a value and year, and calculate what that
> value would be for any other year using the actual rate
> of inflation over that period.  For example, $100 spent
> on goods and services in 1971 would cost $443.95 in
> 2002 for the same goods and services, based on
> inflation alone.  The inflation-adjusted 2002 prices
> for the three early Argonaut models are shown in the
> fourth column of the table below:
>
> ---Model---- -Year- -Price- -2002 Price-
>
> Argonaut 505  1971   $288    $1279
>
> Argonaut 509  1973   $329    $1332
>
> Argonaut 515  1979   $429    $1062
>
> The $795 price for the new 516 is 25% to 40% less than
> the inflation-adjusted prices of these Argonaut models
> when they were first introduced, an interesting result.
>
> Bill, KD5QID