their sudden closing has several of us wondering why.
- Thread starter nesikabay
- Start date
Cost of doing business in So cal. If they relocated to somewhere more labor friendly they could cut cost in half.
......same thing that happens anytime any other business goes out of business.
Everyone wants to hear some sort of fairytale or weird explanation. Even good people with a good product can’t fail.
you've clearly never spent time with one to understand why they cost $2k
spec out a full weight kit ACC with folding stock
cadex chassis
decked out whiskey 3 folder
hell even a decked out manners
Nobody gives a shit why they cost $2000.
The market said they ain't worth it, and the market don't give a fuck about fanboys
until they tell us what happened, no one knows whether it was a price issue.
like every other thread you just come to shit from behind your keyboard. nothing new out of you. and nothing useful either. but life goes on with you wasting internet
It likely wasn’t necessarily the actual price that was the issue.
They sold an expensive (comparatively) chassis for 16 years and didn’t come up with any new ideas.
Precision rifle is a very niche market. We like to feel like we’re hot shit, but we ain’t in the grand scheme of things.
When you sell basically the exact same product in a niche market for 16 years, and one that doesn’t fail or break, a couple things happen:
Most everyone who wants one has one.
You have to literally compete against your own used product. They don’t break, so you have 16 years worth of used stocks to compete with. Why buy a new one for $1800, when you can get an excellent shape used one for $1200.
When they finally did come out with a new product, it was the same chassis......for a tikka. Are you fucking kidding me?? You spend the time and money for tooling expecting people to buy an $800 rifle and drop it in an $1800 chassis? Gtfo
They didn’t diversify and didn’t adapt.
And I’m an jae fanboy. I’ve owned close to 10 and love them. B
I can assure you, they didn’t close the doors because the rats were eating all the cash they had piled up from profit.
They sold an expensive (comparatively) chassis for 16 years and didn’t come up with any new ideas.
Precision rifle is a very niche market. We like to feel like we’re hot shit, but we ain’t in the grand scheme of things.
When you sell basically the exact same product in a niche market for 16 years, and one that doesn’t fail or break, a couple things happen:
Most everyone who wants one has one.
You have to literally compete against your own used product. They don’t break, so you have 16 years worth of used stocks to compete with. Why buy a new one for $1800, when you can get an excellent shape used one for $1200.
When they finally did come out with a new product, it was the same chassis......for a tikka. Are you fucking kidding me?? You spend the time and money for tooling expecting people to buy an $800 rifle and drop it in an $1800 chassis? Gtfo
They didn’t diversify and didn’t adapt.
And I’m an jae fanboy. I’ve owned close to 10 and love them. B
I can assure you, they didn’t close the doors because the rats were eating all the cash they had piled up from profit.
What strikes me as most confusing is the moneys
Spent on gumball and the $1200 chassis option.
Unless that was a last ditch effort to get a bunch if sales real fast
That’s what I’m guessing. Gave it one last shot with the funds they had remaining.
You and the price again.
I don't think you know fuck all about running a business, to be honest.
What was their lead time, btw? Wasn't it long as fuck? Sloooooooow inventory turns while cash keeps going out on fixed and variable expenses every month.
Hint: product excellence isn't enough to succeed.
Actually I have. They were very nice but and I often said if I ever went BACK to a chassis it would have been a JAllen.
Then I found foundation and never looked back.
Also have fully kitted manners and they were well south of $2k.
I am guessing 5 employees and a shop full of machines would easily be 50k in over head a month. That is before they even turned a screw or bought materials. You would need to sell roughly 80 to 100k per month in stocks to make a profit. Could they sell and produce that many stocks per month? I wouldn't think so. I think that they bit themselves by taking deposits and creating a false cash flow. They were in a pickle of having a huge backlog of people that ordered direct that were waiting literally years for stocks while in the mean time supplying distributors and not delivering on orders that people put deposits on. I think that when they started producing the JAE700 it was a gerbil wheel from that point on and even a small slow down in orders would gave been devastating.
My cousins friend heard that they wrapped up shop to go big foot hunting. Frank gave them some hot leads on where to find a matting pair in Alaska. They went all in on it.
I agree with your analysis other than the common confusion between being profitable and being cash flow negative.
You can be profitable [ (price-cost of goods sold)/price ] and still lose your ass because each month's expenses > receivables (which is what you're describing)
I think it was two fold, gross profit may have been good but lack of volume could not cover expenses. Also, being blinded by the cash flow of deposits may have contributed to the mentality of operating the business as if you were profitable.
This is one reason why I am skeptical of "pre-orders". I think that they can be a cash flow scam.
On what grounds would a C&D order be issued? They've been in business for what, 16 years without issue. What could have popped up so suddenly to warrant that, I wonder?
Gotcha. I guess I've always view C&Ds in the light of patent infringement, etc., making a product that's too close to another or some such. I'd never considered the financial aspect of things getting involved in such a way, thinking the creditor/bank/whatever would just repo whatever equipment had been defaulted on.
