Why is demand for FAS products still outstripping supply?

V

VidarAus

Experienced
This is a genuine question asked with genuine curiosity, so please don't shoot (I know topics like this can get heated around here). I am curious about the business/manufacturing side of releasing high technology, high demand products like those of FAS.

FAS has been around for a good while now and released a number of products. Customer demand has always been very strong and their business only seems to have gone from strength to strength. The release of the AXE III, foot controllers and the upcoming FM3, is certainly not their first rodeo. It is clear that there is a massive demand for these products long before they are released, which has been proven again and again. Previous product releases had massive waiting lists that took months to catch up, and this is looking the same for the FM3. In Australia, you can't even buy the AXE III new as there is no local stock and it has been out for a while.

So my question is, if FAS knows they could basically release anything and have enough customers to fill a fleet of cruise ships ready to buy it instantly and they have a lot of experience in manufacturing and releasing products, why is there still not nearly enough supply? Or maybe everyone's idea of how many customers there are is actually overinflated (but this would make fulfilling orders easier)?

Does FAS just not have enough capital to purchase enough stock all at once? Is it a business decision to keep the market hungry? Is there simply not enough manufacturing capacity in China to deliver enough volume for such a product? On this last point, I imagine that FAS doesn't have its own factory. So using a third party to produce the product might be the bottleneck? I mean, I doubt Line 6 products or say IPhones have quite the same waitlist issues but they are much larger in scale. Or perhaps the true number of

Anyone in the know about manufacturing/business for products like this who can add to a friendly discussion?
 
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My uninformed opinion is many factors contribute to an actual release date and rate of manufacturing..not the least of which is this has sorta been FAS protocol from the start, as Cliff’s extremely high standards for quality control and the distribution chain handled personally , as FAS started (and continues AFAIK) as a family business. Creating anticipation for a highly regarded/ in demand product may also weigh in. Worldwide component shortages, vagaries of dealing with international manufacturers distributors and shippers , the exponential growth of the company. Personnel changes,the final firmware tweaks... and of course the fine law of Murphy all contribute to some extent to when we get our perfect black boxes, made as well as anyone could imagine.
Nuff said. (By me)
 
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I work in the automotive manufacturing industry. There is a principle called "just in time" which means that you only manufacture what you need in a given period of time. Any additional inventory or "safety stock" is just a waste of space in your warehouse, extra risk if some defect was found in that inventory, and most of all is just basically extra money just sitting around not doing anything. I imagine that a relatively small company like FAS doesn't want to have millions of dollars worth of inventory sitting around.

In automotive you need some safety stock because if you run your customer (OEM's) out of parts they charge you for line shutdown costs sometimes $3000 per hour for however long you shut down their production line. Any defects or broken tooling have to get fixed extremely fast to avoid this. In the consumer electronics industry I imagine your only risk is just putting your customers on a wait list. Knowing FAS and their dedication to quality I imagine they would spend however long it takes to take care of any issues and just put us on a wait list.
 
FractalAudio said:
We have plenty of stock. The distributor can order more at any time.
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This is interesting. So some of this is distributors not wanting to hold inventory in case it doesn’t sell. Seems a little too risk adverse as there still seems to be a lot of demand for the III (well based on forum perusing, not hard data).

In this case Cliff, are you expecting to have enough stock to fulfil expected initial FM3 demand worldwide on release, as it sounds like you have this all locked down :)
 
You never know with distributors. Like every other business, they have lines of credit that have to be maintained. They may be directing spending elsewhere or spent bad previously and trying to catch up. Our LOC requires we zero it out every so often, sometimes that’s hard to do.
 
searching said:
I work in the automotive manufacturing industry. There is a principle called "just in time" which means that you only manufacture what you need in a given period of time. Any additional inventory or "safety stock" is just a waste of space in your warehouse, extra risk if some defect was found in that inventory, and most of all is just basically extra money just sitting around not doing anything. I imagine that a relatively small company like FAS doesn't want to have millions of dollars worth of inventory sitting around.

In automotive you need some safety stock because if you run your customer (OEM's) out of parts they charge you for line shutdown costs sometimes $3000 per hour for however long you shut down their production line. Any defects or broken tooling have to get fixed extremely fast to avoid this. In the consumer electronics industry I imagine your only risk is just putting your customers on a wait list. Knowing FAS and their dedication to quality I imagine they would spend however long it takes to take care of any issues and just put us on a wait list.
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What he said. And the cynic in me also thinks that they don't think it hurts business to make customers wait and create a feeling of scarcity then have ample supply in shops available at the ready. Scarcity wets the appetite in ways that ample supply can't. Just look at the Klon. If Bill Finnegan had cranked those out like he was Boss Pedals himself you'd think it would have gained such mythical status? Anyone can get a Klon(e) nowadays, even EHX sells them by the bucketload. And yet some people are still willing to fork out a thousand for what they consider a real Klon.
 
I have to admit most of my purchases are either on impulse or a gas that must be satisfied quickly. I often change my mind when I have to wait. This was not the case with my Axe Fx because there is nothing else like it. The few days I waited for delivery almost killed me though lol.
 
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