Joe
Sorry but I have to disagree with you. The large service bureaus
(especially if
they are inefficient) are the ones that will be in trouble. The price
reductions
in the market will cause them to slowly bleed to death primarily when
they
become a bit slow (which will always happen some time or another).
Plyenetics
can be a case for this.
It is the small companies who are nimble enough to adjust with the
market prices
that will prosper. They are more able to handle the slow times and
provide
superior service over the long haul.
Drew Brown
Conceptual Reality L.L.C.
Phone:(248)926-8820
Fax:(248)926-8830
http://www.conceptual-reality.com
Joe Allison wrote:
> I agree with many that the US economy is not immune to the world
crisis
> going on right now. I still find it unbelievable that we have not
> experienced a major down turn here yet. I think we are just waiting
for a
> couple of international banks to fail. But I believe the difficulties
of
> some of the RP bureaus in the US is completely disconnected.
>
> First, Plynetics is an isolated incident that has nothing to do with
the
> market place. They got caught up in the venture capital game and got
> burned. I won't elaborate on this any further.
>
> As for the so called down turn in the market place, this is a simple
lesson
> in business. I have heard several business consultants/experts
predict this
> over the last several years. In a mature market for other types of
custom
> manufacturing, gross margins are somewhere in the area of 45%. In a
start
> up industry, these margins can be much higher due to the lack of
> competition. For the past several years, for our industry, these have
> probably been as high as 55-75%.
>
> What we are seeing in the RP market is the equivalent of a painful
> adolescence. Gross margins are below the 55% mark with more room to
drop.
> This will drive some of the smaller and less efficient service
providers out
> of the business, but you will see growth in the overall industry.
Unless,
> of course, the entire world economy collapses.
>
> OK. I better go get some work done now.
>
> Joe Allison
> Solid Concepts Inc.
> 28231 Avenue Crocker #10
> Valencia, CA 91355
> Tel: (805) 257-9300
> Fax: (805) 257-9311
> Email: Joe@SolidConcepts.com
>
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