In 1887, a trade magazine for jewelers called The Keystone was established. It is still going, with a name change in 1935 to The Jewelers Circular and Keystone. The keystone name was attached early on to the practice of publishing retail prices (advertisements, catalogs and printed price tags) and sometimes noting in fine print that the prices were "keystone." That meant that the retail jeweler's cost was one half of the published price. Obviously, the manufacturer/wholesaler was making a profit when he sold the goods for half of retail. Hence Thermite's "double, triple, or more margins" comment. Have you ever walked by a jewelry case and seen a "40% off" sign? They are still making money, and probably paid even less than keystone.
Larry
Got it in one. "Triple key" was common, pretty much industry-wide '74-'84 when I was running a manufacturing jewelery "captive" operation. By building in-house, we could pump out decent goods to sell at only 100% markup, if-even. Add "JIT" manufacturing tricks to keep investment in gold and diamonds down, we were able to hit and sustain eight turns a year, never long hold slow-moving goods.
Another example is how we "repaired" hearing aids. Basically? We simply DIDN'T! Repair anything.
My Service Dept staffed (IBEW organized by then) would tear-down incoming defectives, separate and rigously clean the major components, (mic, reproducer, PCB), discard the cheaper parts (case, volume control) outright.
All those got identical tests to brand-new, had as many brand-new parts added-in to support batch assembly, same jigs, fixtures, techniques and test AS "brand new".
Legally, the "used" components made them "different" but the performance specs were identical. HAD to be.
A "service unit" for a $900 retail hearing aid was about $17.50, fully-burdened cost when mass-produced that way.
Damed good thing, too.
Engineering had pushed to a "bridge too far" on one high-gain behind the ear model. The mounts would stiffen on mic & reproducer, feedback ensue. Around 130 dB of it!
Some user's dogs or cats would attack and EAT the offensively squealing alien "bug"!
Most hearing aids even survived teeth-tears and pet bowel-journeys, just as one of our rugged stainless-cased "body" instruments had once saved a life by stopping a .38 Special heart-shot.
We needed to deliver 2 to 3 "service units" to get that model to last to at least its one-year warranty, one or two more units, yet as we elected to extend the warranty.
Eventually, a new model that did not have the problem replaced it.
Customer reaction?
"Yes, I had problems, but what WONDERFUL Warranty service the maker provided!"
'nuther company, same again with an early LCD "Sport Watch".
Case and band were one-piece soft synthetic rubber, would stiffen and break as sweat attacked the material. Customer was simply handed a new one in exchange for the old. No paperwork, even.
When accumulated defectives had filled a 55 gallon drum, we took a photo, sent it to the maker in China, got back 5,000 new "watches", no charge.
Our cost was around $3.00 each, sell around $9.75. At over fifty thousand units a year.
Once again, customers LOVED US for the no-hassle warranty service and remembered it longer than the reality that it wasn't much of a "watch".
Sometimes "losing" on a marginal product can be turned into a perceived "win" - even a financial win.
Problem with applying that to machine tools?
For openers, you need a Helluva lot more than a bucks worth of postage each way to cycle them between warehouse and end-Luser premises, especially if more than once.
...and then? The disgruntled end-Lusers may rat you out, anyway... "Right here on PM".
