Well work backwards.
Dealer makes 1/3 profit so that mower was $ 2000 at the factory gate.
Rear tyres wholesale at $ 50 fronts at $ 25
Transmission wholesales at $ 400
Engine at $ 750
Battery $ 25
Belts $ 25 & 32
So that leaves AYP $ 643 to cover the cost of pressing out the body , frame panels & deck , then painting them all.
They also have to buy in the front pulley, tensioning pulleys x 2, for drive + 2 more for the deck. wiring loom, safety switches steering wheel , seat & about 40 bolts
And most likely a dozen more I can not think of right now, assuming things like springs are all made in house.
Then there are the costs of employment, wages , healthcare, gloves overalls, toilets , lunchrooms ,showers, first aid posts, heating , supervision & management staff.
When the mowers come off the line there is inspection , testing, mechanical rectification then crating storage and inventory control.
SO how much actual profit do you think there is left over ?
Then out of that profit there is credit to the dealers , down here 120 days, so AYP will have paid for all the inputs then not get paid for the product for 3 months after it leaves the factory which might be a full year after it was made & paid for.
So while interest rates are low at the moment, even low interest on $ 10,000,000 to $ 100,000,000 adds up and because mowers are seasonal, even the cost of having 1000 of them ( more like 50,000 ) sitting in undercover temperature controlled space is not exactly cheap. And of course there is R & D designing next years models, purchasing department chasing up suppliers for next season and finally warranty department.
The sad reality of it , AYP would be running at a real profit in the order $ 10 to $ 30 on a machine you paid $ 3000 for.
People who have never been involved in manufacturing just do not seem to be able to understand that factories are very expensive things to run.
I always believe the christmas myth is to blame because in the back of everyone's minds there is a space that no one pays for , staffed by elves who work for free , making stuff from nothing, which gets warehoused & delivered by santa.
For me, the tragedy is the actual cost of making a junk product is almost same as making top quality ones.
So the same plant that makes a mower that will just outlive warranty can also make a mower that will last for 50 years and the difference in manufacturing cost is in the order of 5% to 20% which is only in the order of 5% of the final retail price.
The real tragedy is if you bought the top shelf $ 6000 machine they would be looking at $ 2000 profit which would keep the factory running Americans employed and you would have a mower that will last 30 years even if you left it out in the weather so every one wins.
No one wins neither the manufacturer nor the consummer by driving prices down to unprofitable levels.
This is a bold faced lie that we have had shoved down our throats for 50 years to the benefit of nobody but the 1% of super wealthy who are in a position to manipulate situations to their own advantage,
honestly no clue.
