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There has to be more here than meets the eye. How can a company that has been in business for some time suddenly not have the resources to continue to manufacture products that presumably they are making money on. This seems especially hard to believe when the bulk of your business is direct to customer which means you get paid immediately when you sell a product. Who took the money?"
Oppo Players are assembled in China. The factory that assembles the units requires a a minimum order to do a production run. Also, suppliers of custom parts, such as face-plates, circuit boards, etc also require a minimum order. In addition, there is a "up front" charges for developing dies for casing, masks for circuit boards, packaging and literature and software.
For hypothetical reasons, lets say that Oppos Assembler requires a minimum production run of 3000 UDP-203's.
parts and assembly costs = $185
Development, support, overhead and shipping = $130
Profit = $100
----------------------------------
Dealer Cost = $415.00
Dealer profit = $135
------------------------------------
Total cost = $550.00
Now if Oppo sells you a unit directly, their profit goes up to $200 ($235 - $35 shipping).
So for a Production run of 3000 units, Oppo's cost is $915,000.00! Assuming half of sales are direct, profit would be $450,000.
The unknowns here are what is the development cost including molds, dies, etchings, etc. How much is their overhead, salaries, healthcare, building lease/mortgage and advertising? How long does it take for 3000 units to sell? Only the people of Oppo know the answers to these questions.
From my conversation with them, I got the impression that doing another production run was going to eat up too much of their operating capital. UDP-205's sold out in three days from the announcement. How long before UDP-203's are out of stock? Developing a new products takes a long time. So, it they do another production run, do they have enough cash in the bank to pay salaries and their mortgage? How many sales of month do they need to cover these expenses? Is the Parent Company tired of footing the bill for a subsidiary that has an ever shrinking market?
Remember, we're the minority here. Most people these days are quite happy to stream "4K" Netflix or watch on a phone/tablet/computer. I watch more content these days on my computer (4K 32" monitor) than I do on my TV's and 4K projector. More content produces are forcing more content online. Right now I'm watching F1 practice my computer because it's not available on TV.
I think Oppo made the smart choice, but I'm not happy about it. Hey, let's wind down our operation and give our employees time to find new jobs before we start bouncing payroll checks. This is something Toys-R-Us failed to do.
Oppo Players are assembled in China. The factory that assembles the units requires a a minimum order to do a production run. Also, suppliers of custom parts, such as face-plates, circuit boards, etc also require a minimum order. In addition, there is a "up front" charges for developing dies for casing, masks for circuit boards, packaging and literature and software.
For hypothetical reasons, lets say that Oppos Assembler requires a minimum production run of 3000 UDP-203's.
parts and assembly costs = $185
Development, support, overhead and shipping = $130
Profit = $100
----------------------------------
Dealer Cost = $415.00
Dealer profit = $135
------------------------------------
Total cost = $550.00
Now if Oppo sells you a unit directly, their profit goes up to $200 ($235 - $35 shipping).
So for a Production run of 3000 units, Oppo's cost is $915,000.00! Assuming half of sales are direct, profit would be $450,000.
The unknowns here are what is the development cost including molds, dies, etchings, etc. How much is their overhead, salaries, healthcare, building lease/mortgage and advertising? How long does it take for 3000 units to sell? Only the people of Oppo know the answers to these questions.
From my conversation with them, I got the impression that doing another production run was going to eat up too much of their operating capital. UDP-205's sold out in three days from the announcement. How long before UDP-203's are out of stock? Developing a new products takes a long time. So, it they do another production run, do they have enough cash in the bank to pay salaries and their mortgage? How many sales of month do they need to cover these expenses? Is the Parent Company tired of footing the bill for a subsidiary that has an ever shrinking market?
Remember, we're the minority here. Most people these days are quite happy to stream "4K" Netflix or watch on a phone/tablet/computer. I watch more content these days on my computer (4K 32" monitor) than I do on my TV's and 4K projector. More content produces are forcing more content online. Right now I'm watching F1 practice my computer because it's not available on TV.
I think Oppo made the smart choice, but I'm not happy about it. Hey, let's wind down our operation and give our employees time to find new jobs before we start bouncing payroll checks. This is something Toys-R-Us failed to do.