RE: [Harp-L] Hohner Price Increase

["Joel B. Chappell" <joel.b.chappell@xxxxxxxxxxxxxxx>]

The reason for the increase is that "someone" in Washington DC is printing
an extra amount of money and flooding the market with it. Our foreign
neighbors have realized that this inflationary practice on our part is
costing them money so they are taking measures to hedge their losses. Very
simple and elementary really...

Joel B. Chappell
21 Billings Street
Milford, NH 03055
What you believe determines what you choose.
What you choose determines your future and
the future of our nation



-----Original Message-----
From: harp-l-bounces@xxxxxxxxxx [mailto:harp-l-bounces@xxxxxxxxxx] On Behalf
Of Vern
Sent: Friday, July 01, 2011 8:38 PM
To: fjm
Cc: harp-l@xxxxxxxxxx
Subject: Re: [Harp-L] Hohner Price Increase

I don't think that you can attribute the increase in harmonica prices to the
increased cost of raw materials.

A diatonic harmonica weighs about 2 ounces or .12 lb.
The most expensive material of the harmonica is the copper in the brass
reeds and plates.
The current price of a pound of copper is $4.30
If the harmonica were made entirely of copper, its raw material cost would
be only about 54c.
Actually, the harp also contains far cheaper zinc, steel, and plastic.
About 25c would be a pretty good rough estimate for its raw material cost.

The rest is the cost for tools and facilities, labor in all of its forms,
marketing costs, and...of course...profit.  Because they are made in foreign
countries, currency exchange rates are...as you say...a factor.  

If people are buying fewer harmonicas, the fixed costs become a higher
proportion of the total and the price must rise. It is my guess that this is
responsible for the increase.

It is easy to attribute a price increase to manufacturer greed.  A free
market is pretty good at controlling greed.  We have plenty of competition
including a struggling American startup and a failing Brazilian startup. If
prices get outrageous  the startups and the repairers will flourish.  

Vern
 
On Jul 1, 2011, at 8:56 AM, fjm wrote:

> Anything metal is a lot more expensive than it used to be.  Steel used to
scrap at 2 cents per hundred weight now it's about 20 cents a pound.  Copper
is hovering between 3 and 4 dollars a pound scrap.  Zinc makes pennies worth
more than their face value.  The recent spike in energy prices hasn't helped
and the dollar is very weak against world currencies.  I'm not sure what
Hohner's supposed to do.  Sell harmonicas for under cost and make up the
difference in volume?  fjm