Originally Posted by
bjames
So I see alot of you saying Begi won't make money on this. What is this based on? Where are the facts to support this asumption? Here are a few things to consider, he knew there would be no big volume sales going into this, He had knowledge the tune wouldn't be easy, he got information from exeperienced forum members and talked to Kleemann beforehand. On his site he sells kits that range in price from $1618.00 to $3999.00. The expensive one has a Garrett Turbo and a header style exhaust manifold. Expensive items. I don't think he is selling any of these for a loss. The Chinacharger T.28 that is going to be on ours he sells for $350.00 his cost I don't know. As far as a intercooler, couple hundred bucks, maybe.
Piping and misc. fittings he buys in bulk. He knew in pennies what the parts were worth, he has built enough of them to know.
Biggest expense with any startup project is the tooling and R&D. This stuff isn't cheap... you'll have wasted material, countless man-hours, and
all of that risk and expense is absorbed by the company. If you know in advance that you have a broad market (Miatas are his bread & butter) then you know you can aggressively price the kit because it will eventually break-even. A thousand widgets at $5 each is a much easier sell than 5 widgets at $1,000. I can assure you, the profit margin for the Miata kit initially wasn't that impressive. Now that they've been out a few years and have sold a thousand or so kits, maybe. But initially, there's a good chance that he didn't make a dime on the first several kits.
The difference with us is the size of the market. It simply isn't there on the broad scale. Miatas have a niche following in Grassroots motorsports. They are used as weekend toys, spec racers, etc. Crossfires are mainly used for GT coupes and curbside appeal... racers are rare amongst us.
The price point for the Crossfire turbo is not drastically higher than some of the Miata kits. But the sales numbers WILL be drastically lower, a mere fraction. If he sells enough Crossfire kits to break even, I'll be shocked. Only he would know, as only he handles the finances.
But that would certainly explain the reluctance in the build. If this was a cash cow, it would be in his best interests to crank it out sooner, as it would translate to earning money faster.