Does anyone know why?

[simon]

Why are waterblocks from the main companies wo expensive, Swiftech $50 for the latest, Ok not to bad but the cheapest I can get it in the UK is £50/$75. I can fully understand when they are this price from a single individual like morphling who is making them with his friend, plus they seem more inovative than swiftechs open chamber design. Danger Den is also expensive to obtain in the Uk. Another of the large companies.
When I first thought about watercooling and saw these prices I immediately thought to build my own. The first things I thought were, metal, copper or aluminium, plain open chamber or some kind of channel. From here it was pretty easy to get to spiral, split channels and having the coldest water hitting the centre is just plain common sense. In their little company ifos they all say things like through extensive testing the best design was found, hey its not that hard. Does this justify their high prices??????
One first waterblock cost my £6/$10 and 3 hours of work, at £5 and hour for labour(we are talking a machine in their case, a guy only has to watch)thats £21. £50 i can't understand,
Gabe from Swiftech I'm not attacking you I just want the costs to be justified before I give my money out.

[GigaFrog]

A good business must makes 50% margin.
Thats what I was told, I am a dumb engineer.

[simon]

But if they drop prices they will definately get more customers, and therefore more products sold, more profit. Also the more customers they have, even at a lower price, the more replacement parts they sell, and once someone has upgraded to watercooling they will probably stay with it and buy new blocks in the future!

[GigaFrog]

But they have other costs like admin costs, that us, engineers, rarely think about. You counted the guy behind the machin, but you have to add the whole team that works around him.

You can be the best enginer designing an almost perfect product, if it does not fit any market, or if no one knows it even exists, it is worth nothing.
And I am saying that being a design engineer. We are only a part of a chain.

I guess the 50% margin is based on umcompressible costs (admin, marketing, research, advertizing ...) that any business has to handle.

[RickCain]

Most large companies like to maintance a 40-50 percent gross margin. Hell M$ runs in the hight 50's. If you look at the cost of the machines and labor to make a waterblock, 50.00 is nothing. You must also realize that the price will stay high until it pays itself off (R&D/Development cost). You ever notice that last years video card typically ends up 50% less than when it was introduced once a newer model comes out? Why, because they have already paid themselves off and now are running on straight profit!!!

[DigitalChaos]

hey guys.. im actually starting to make some water cooling gear that is designed to be low budget. now im only one guy with the help of a friend. so i can't really produce LOTS. plus i am going to be doing all of this with a drill press (maybe a cnc if we can get our hands on it). ontop of it i work 30hrs a week and i am a full time college student.

anyway im starting off with some blocks that use the drill and plug technique... probably not gonna be the absolute BEST performers but they should come in close.
I have done most of my R&D so far and i just dumped all my $ into supplies. Hopefully i will have some blocks ready in a week or 2.

the selling is the hard part. i have now cheap way of accepting creditcards. SSL and CreditCard verification costs way to damn much for me to even think about. PayPal would be nice.. but i heard its run by some very shady people. so i think im just gonna have to put my stuff up on ebay. Anyone have any suggestions for that?

[simon]

I don't agree with this, advertising and marketing is extremely cheap for a company like this. They don't pay for the big money for tv ads, like ms or other big companies. Most of their adverts are online, stupidily cheap as one guy on a pc can knock these up. Its not like they pay the big advertising companies for good slogans and new mays to market it. That is the cost of advertising and these companies don't get involved in it. Also cards get cheaper as new cards come out purely to get rid of them, as new cards are out people won't pay the same price for something crap so they reduce the price to sell them all off. Machines are also costed into everything they every make. Companies say buy a machine for £100,000 and if they thikn it will make 100,000 or whatever it makes then they add £1 to the cost of the thing, they don't make people pay more until the machine is paid for. These niche companies have low overheads, small companies, little marketing(word fo mouth is amn advertising when product is for small group of people), and materials. The amount of copper needed for a waterblock can be brought from online meatal stores for $5, where is the rest of my $45 going. $5 on the machine is very generous. $0.50 for advertising(generous). The guy that does the advertising could also run the web site, pay the bills and answer the phones.

[futRtrubL]

I think jaydee can attest that copper is very hard on bits. There's that cost too.

Edward

[simon]

Don't most of the biger companies use CNC machining though, also with regard to anodizing the swiftechs, they say Class 2 anodizing done(sulphuric acid). Is this not just reacting it with sulphuric acid and therefore just placing it in a container of the stuff. If I'm wrong tell me, if not then this can't cost much.

[Brad]

The price of the copper bar for a maze2 is like $20 alone, then factor in the cost of the cnc machine, the cost of running it, someone to run the machine, etc.

Trust me, DDen don't make too much profit out of their products. I talk to them all a lot about blocks, and such, trust me they aren't making a huge deal of money.

The swiftech block looks to be a bit simpler to me because of the smaller amount of copper, and it's largely open design. But then you have the anodising costs as someone pointed out, and again I can't see them making too much money

[jaydee]

Originally posted by simon
Don't most of the biger companies use CNC machining though, also with regard to anodizing the swiftechs, they say Class 2 anodizing done(sulphuric acid). Is this not just reacting it with sulphuric acid and therefore just placing it in a container of the stuff. If I'm wrong tell me, if not then this can't cost much.

I DO use a CNC machine. It costs about $5 per block for the tooling to do a maze style block in Copper. (it costs about $30 for a decent end mill to mill copper. You can get about 6 blocks out of one bit, si $5 a bit.) It takes about 30mins for a big fast mill or an hour for a smaller slower mill, it costs about $6.50 for the block material, $2.00 for the mounting hardware, $1.50 for the barbs, Time for a employee to make the block which is about an hour after milling and drilling the holes in the block and tapping the holes for the barbs and polishing it up. That is approx $8-$20 depending on the employee. Then there is shipping and packaging.

There is not a lot of money in a $43 maze 2!!!

As for Swiftech they make a better profit because of more machinery but they are intitled to charge more because their blocks/HS's are very good.

[simon]

I understand all the hidden costs, but a company like dd who can buy in bulk can't be paynig $1.50 for a barb thats how much I would pay for one from a plumbing shop. Also from $8-$20 up to $43 is a huge jump, I alos have to pay $20-25 delivery to UK. So a posible $8 waterblock might be costing me $68, tell me where the good value is.
Swiftechs latest also uses vey cheap to make open area design plus now either no barbs or cheap plastic ones. I think this one to my door is $71. Jaydee116, I can't remember, you just have your own CNC machine right? If you do I could understand higher costs for you as its a slow process, one at a time, one process at a time. The whole point of doing it to a big scale is too save money which they are doing or they would stop, but they still charge the high prices.

Can you explain to me their R&D costs, a few samples then make up fine, but their designs aren't new, not at all.

[simon]

Brad,
If i can get 2inch by 4inch by 1 inch copper bar for $5 how is it at all possible for the copper in the danger den maze uses $20 worth, I think they have been tell you some lies.

[jaydee]

Dude you are so off the wall backwards it is really pathetic. A person like me can cut the cost in half because I own my own mill, I have no employees to pay, no electric bills for more machines.

I can make a maze2 for myself for $12.00 complete. All the blocks I posted on my site cost ME less than $9 total. If I had employees to pay that would double without making a profit.


I pay the same for material as DD does because I can buy it through the company I work for at their bulk discount at cost.

I also ment $1.50 for 2 barbs not one. Any local hardware store charges between $1 and $1.75 for ONE. Buy them by the 100 and they are about .75 each.

R&D for Swiftech is much more than DD. Their blocks are designed by design enginers that are PAID. No that cost is not much and is made up for.

$8-$20 was for the price to pay the employee for an hour of work for one block. Add that to the rest of the materials.

If you do not want to pay for the performance of a already made block then don't.

realize MOST people do not have the tools to make their own blocks so these companies are their only hope aswell.

You have really missed the reality boat in your journey in life. Your posts have been the most ignorant I have seen here before.

In one post you are wanting water cooling to go mainstream, but in this post you don't want to pay for it???

[TigerOats]

Simon - I got my water block form Be Cooling for $30 and shipping to the UK $15 which equates to about £30 and I saved myself £20. The Be Cooling block works well for me and I am happy. I think that the prices in the UK are also too high and I wish more of the US firms would deal internationally. Some do but their shipping prices are ridiculous.

[deeznuts]

simon, let me ask you, do you work for a living? are you a professional? seriously. reading these posts, it seems as if you have no clue about the real world, or how business works. if you do know how business works, for some reason you feel it doesn't apply to waterblock retailers.

these guys are here to turn a profit, and that profit will be the most they can charge wihtout hurting sales. plain and simple. to do otherwise would be idiotic of any one in business. people do so with hobbies, but obviously these companies are not hobbies.

you sound like Marx and Engels when they questioned how illogicial it was for the bourgeoisie to take 1 part material, 1 part llabor, and come up with a product that sells for 4 parts. the extra 2 parts was created out of thin air according to them, and the enlightenment, that you seem to be experiencing, will come, where all workers and laborers will rebel, and destroy the capitalist system.

look i am not trying to flame you, just replying to your posts with equal vigor. dangerden is in the business of selling waterblocks. they are allowed to turn a profit. if not, they wouldn't sell these waterblocks, and you would have to make it yourself. that is what you are paying extra money for, for the service. factor in all the materials, hidden costs, workers, webhosting, and the extra "two parts" and you have the price. if dangerden could sell the maze2 for $200 and people would still buy it, it would be idiotic if they didn't, and i wouldn't blame them if they did.

[Brad]

there are differant grades of copper, DDen pays $14 for the copper for each maze2, but they waste a lot because they are always playing with new designs, and fixes. the maze1c1 itself has had 4 very minor revisions in the channels, that block is only 6 months old.

either way, they aren't making a huge amount of money, neither is anyone. If you want cheap watercooling, buy a cheap heater core, a rio 150 pump, and get a 2" x 2" x 1" block of Al, and drill a couple of holes in it.

If you want good water cooling, buy a large new heatercore, an Eheim 1060, and a maze2 waterblock. And pay the price

[p_D_c]

there is something called profit you know!

here in my country you have to pay a fair amount of taxes, i dont know how it is in the US.
Here you pay the 17% of VAT (?), then every semester you give 38% of your pure profits to the state, and also pay about 250dollars per semester to have a company name. (bear in mind that the lifestyle costs here in portugal are less than half of the US)
if you have a 40% profits, you can see where that goes (15 or 20%), it is in reality much smaller than that. if you have an employe, a car for deliverys etc etc...

and those danger den guys should be earning more than the minimal salary... so that means they work pretty hard for their green