Cost of Manufacturing Old Racquets Versus New

[the green god]

Found this online about a court case involving the selling of racquets:

"At trial Ray testified he wrote the November 1984 solicitation letter because Fleming was not buying and paying for his inventory quickly enough, the letter did not violate his agreement not to compete with Fleming because the agreement said he was not to enter the mail order business and the purpose of the letter was to exit the mail order business, Fleming was "hopping mad" about the letter and "wanted to sue me right there and then," and Ray agreed he would not send out such a letter again.

Ray conceded he sent out a mailer in May 1986 which offered many of the items Fleming sold, but maintained he was not competing with Fleming because the item in the mailer which "really sold" was a Head Graphite Director racquet and Fleming didn't sell Graphite Directors. (Ray testified he bought 1,700 Graphite Director racquets from Head for $10 each and sold them all for $40 each, i.e., for a profit of over $50,000 ($30 X 1,700 =s; [225 Cal.App.3d 579] $51,000). Ray said "we sold more of that racket in a shorter period of time than we have ever done with anything ever."

Now $10 in 1986 is roughly $22 in today's dollars. We are talking about racquets made from American labor and I would be willing to bet these were made with better graphite materials with more of it in each racquet.

So this begs the question, "Why are we paying $200 per racquet now?"

 

[Sanglier]

Those are unbelievable figures. $10 is more in line with what the B2B price of a Taiwan-made aluminum frame would have been back then, and $40 was about right for what those frames retailed for at the time.

As a reference: the manufacture cost of a US-made POG prior to 1983 was around $75 (in 1983 dollars), whereas Kunnan Lo was able to cut that down by 3/4 through lower wages, a cheaper solvent-based prepreg-making process, and much higher production volume (hence taking the contract away from the US vendor). These are just the costs! By the time the frame goes through a wholesaler, the price tag was already significantly higher.

From the passage cited, it's hard to tell whether this "Ray" guy was a wholesaler or retailer. If it's the latter, one can imagine why those $40 Graphite Directors went so fast - it was a steal!

Was there a missing zero somewhere? Were these racquets on clearance?

What happened to Coachrick? He was in the business and should be able shed some light on this.

Graphite racquets were/are largely hand-made. Whether you used premium graphite or surplus scrap, the labor and equipment costs are the same, which account for the bulk of the production expenses. Unless Head owned a bunch of slaves in Colorado, it's difficult to imagine that they could have made - much less sold - a racquet like the Graphite Director for $10.

Can you supply a link to this article?

 

[the green god]

http://law.justia.com/cases/california/court-of-appeal/3d/225/574.html

 

[Sanglier]

Very interesting! So THIS is the original "Ray" behind R-a-y-c-o, presumably the same R-a-y-c-o (why is this a naughty word on this board?) that marketed that flimsy adjustable length racquet later on?

Given that by 1986 Head had already been selling the Director II for two years (according to Kuebler), one gets the sense that Ray was simply buying up the dead stock of the earlier Director from Head, hence the ridiculously low price.

What I am taking away from the article is how (surprisingly) tough it was to make a profit in the mail order tennis equipment business!

 

[Lightsout]

I bought from Ray-co back in the day and I thought they were great! I bought a Graphite Director probably in 1985 or so, and I'm pretty sure retail price was a little over $100, so $40 seems reasonable for old surplus stock.

 

[retrowagen]

For reference, I believe the current unit cost for composite frame manufacturing in China is around $30/unit, give or take a couple dollars.

The $10 Graphite Directors referred to in the legal brief were likely Head dead stock, liquidated with an abnormally low unit cost at the end of their product run (which was quite near Head Tennis's corporate sale to Austrian Tabak, hence a likely scenario for a super-duper low price wholesale deal).

 

[max]

It would be very interesting to find a reasonably scientific way to know whether tennis buyers in 2015 would be willing to pay perhaps 10% more for a nicer made racquet.

When I run into my old American made graphites, they just DO seem better made all around. . . although the decals aren't so flashy.

Considering electronic equipment, too, the American made old stuff is just so damn more solid.

We've accepted cheaper product for cheaper prices.

 

[Roadway]

I am very impressed by wall of the frame of Graphite Edge. It's thicker than most of the newly made. If the graphite of 80' and nowadays are the same strength, the older ones are defintely stronger. Or perhaps the new gaphite might be very refined with high strength and low weight, the older ones are perhaps not stronger than new ones.