How Does Fractal Make Money...

steadystate

steadystate

Fractal Fanatic
when all three of their products are out of stock? Currently, the XL, MKII, and MFC are out of stock. Have been for a while. I'm sincerely curious as to how that affects the operations of a company.
 
Interesting point. There is service and labor, the cab packs but I'm sure it has quite an affect. Although the invitations for the XL have been going out and people have been buying them.
 
I have an invitation to buy the XL, but it has been out of stock since the day the email arrived (and long before that). The expenses involved in running a company are substantial. Payroll, insurance, rent/lease, interest/premiums on loans, licenses, attorneys, accountants, materials, ad infinitum. According to the website, no product has been available for sale for a while. It seems to me that each day this is true is a significant loss. I assume this must not really be the case. Still, the fact that the company that makes a product is out of stock so frequently is interesting. Supplier problems? I guess ramping up production for spikes in sales isn't a good long-term plan.
 
They seem to follow the old Harley Davidson model, keep supply down and demand up. Of course they could order 10,000 units, borrow the money and have tons of inventory, but then to make the payments you are forced to reduce pricing to ensure a more steady flow of sales. While such an order would create economies of scale on the production end, the work force required to produce such sales would likely dissolve the savings enjoyed. It's Cliff's show to run as he desires.
 
steadystate said:
I have an invitation to buy the XL, but it has been out of stock since the day the email arrived (and long before that).
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I thought the invitations meant "your unit is ready to ship to you, just pay for it", and provided a special URL for you to visit to complete the purchase? The normal ordering page will show out of stock, but the invite emails should provide a way for you to bypass that. At least that was my understanding, and how it worked when the MFC101 MKIII was released. Yes? No?
 
EJ James said:
I thought the invitations meant "your unit is ready to ship to you, just pay for it", and provided a special URL for you to visit to complete the purchase? The normal ordering page will show out of stock, but the invite emails should provide a way for you to bypass that. At least that was my understanding, and how it worked when the MFC101 MKIII was released. Yes? No?
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That's how it worked for me for both the -XL and the MFC. They emailed, I paid, They shipped.
 
EJ James said:
I thought the invitations meant "your unit is ready to ship to you, just pay for it", and provided a special URL for you to visit to complete the purchase? The normal ordering page will show out of stock, but the invite emails should provide a way for you to bypass that. At least that was my understanding, and how it worked when the MFC101 MKIII was released. Yes? No?
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It seems my first attempt had some sort of problem. The link they sent does in fact work. I wish I could delete this thread now. The good news is that the XL will be on the way soon.
 
socalguitar said:
How does Fractal make a profit? I don't know...maybe he can build a axe fx for 1000 dollars and sell it for 2300?
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Don't all great product have profits margins? Let's be honest now, Cliff could sell an Axe for $5,000 and the majority would still pay for it. Supply and demand, my friend. That's all there is to it. For me, I'm grateful of Cliffs business model. It means that my Mk1 is still worth 80% of its original value
 
Fabio KTG said:
Don't all great product have profits margins? Let's be honest now, Cliff could sell an Axe for $5,000 and the majority would still pay for it. Supply and demand, my friend. That's all there is to it. For me, I'm grateful of Cliffs business model. It means that my Mk1 is still worth 80% of its original value
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Damn straight on all points. :)
 
I think Cliff actually moonlights as a standup comedian and Matt tours with the Chippendales when he has down time. ;)
 
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