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Oliver Ryan
25th November 2000, 07:20
I was looking at the museum replicas webstite (www.museumreplicas.com) and saw several swords there that were the exact same as some sold by Bugei, such as the orchid katana, with the same name, blade type, saya, etc. Everything was the same, except in the case of the Orchid in specific it was about $300 less! When I went back to the sword forum at Bugei to see how many responses my post telling this information had, I saw that my post had been removed!

I found the whole thing interesting, and thought some here might like to know.

Jin
25th November 2000, 23:22
That is strange that they deleted your post....usually they are very open and friendly.

As to the swords being sold at Bugei (orchid,bushido,tiger,kami-aka-Guardian Warrior)
those swords are sold through many dealers and not only Bugei. The swords they get from Paul Chen are picked from the best of each shipment and are sold with Bugeis warranty (i think..??) That would explain the higher price. They pick the cream of the crop and everyone else gets the rest.

this is only my observation and may be wrong, feel free to correct any information that is wrong.

Brian James

Tetsuo
27th November 2000, 04:55
James posted a subject titled (Paul Chen Swords et al) in the forum "Swords" section and in this he describes his reasoning for pulling your post as well as those that followed.

Jesse Pelayo

kenjgood
27th November 2000, 05:10
Here is a direct link to the post.

http://www.swordforumbugei.com/ubb/Forum2/HTML/000354.html

Oliver Ryan
27th November 2000, 05:51
Well I'll be sitting down to a nice plate of hot, steaming crow right bout now.....

Twas my mistake and I offer my appologies both here and on the Bugei forum.

Ganbatte

Soulend
27th November 2000, 06:40
Hehe..that's where I got my Shinto katana(Museum Replicas), and I noticed that the prices were less too. From the transcript of an online chat with Paul Chen that I read just today, any swords from his forge that are defective in any way he asks be sent back to him. He will not sell "seconds", even if they are advertised and marked as such. So, even if Bugei gets their pick, I don't see that one bought elsewhere could be that much different. Mine arrived in mint condition and cuts through tatami like a laser through hot butter.

Soulend
28th November 2000, 05:09
Yes, I believe that Bugei offers the finest newly made swords I have seen to date. Alas, if only I were rich!

Something that is interesting to me after reading the statement concerning this on the Bugei site is that CAS Iberia has this policy, one of not allowing retailers to sell their products below a certain price. Forgive me, but this sounds a lot like price-fixing to me, which last time I checked was quite illegal (in the U.S.- not sure about Spain, where CAS Iberia is based). I have a friend with some background in business law, perhaps she will set me straight.

I found the statement by James on the Bugei site to be a little troubling, to be honest. I can sympathize with the time, effort, and travels that the Bugei group have invested. However, there is such a thing as laissez-faire and free enterprise which made this country great. If someone pays a distributor like CAS the wholesale price they request for certain goods, they should be able to retail those same items for any damn price they like, and if they can do it for hundreds of dollars cheaper than the competition- I say more power to em! This is why we aren't paying $10 for a carton of milk.

I have done business with Museum Replicas for only about two years, however I have bought items from their parent company, Atlanta Cutlery for almost twenty. I can say without reservation that they are some of the friendliest, customer service oriented folk you could ever want to meet. Any item that is not to your satisfaction for any reason is replaced or your money refunded, your option. I hope that this isn't considered advertising, because that isn't my intent. Just fact.

Rhomyn Escalante
28th November 2000, 14:37
Originally posted by Soulend
However, there is such a thing as laissez-faire and free enterprise which made this country great. If someone pays a distributor like CAS the wholesale price they request for certain goods, they should be able to retail those same items for any damn price they like, and if they can do it for hundreds of dollars cheaper than the competition- I say more power to em! This is why we aren't paying $10 for a carton of milk.

Doesn't work that way Pal, I am a manufacturer, my distributors and whole sellers have to sell to their retailers at a certain price, the retailers have a price range that they can not go below. By Contract. By Law. As a manufacturer I have to protect the complete distribution line, if not, the line collapses and all retailers, whole sellers, distributors go out of business. But I stay in business because I am the manufacturer. NO distributor, whole seller or manufacturer Rep will sell my product if I don't protect them. CASI has, lets say for arguments sake 4,000 end retailers. If one or two decide they want to under cut the other 3,998 simply because they don't need 'x' amount of profit because they are selling out of their trailer on line, customers see the value of their purchase being diminished and start screaming, and the 3,998 retailers start screaming, who gets hurt? CASI. What do they do? Yank the idiots in the trailer park, protect their base distribution and flow sales and then customer value. It ain't price fixing. Price fixing is when CASI and BUGEI and all the CUSTOM SWORD manufacturers and all the BLADE manufacturers get together and say, "hey, no one buys a sword in the US for anything other than this set price, period!"

Soulend
29th November 2000, 19:08
I bow to your superior knowledge. It seems that from the consumer's standpoint, we are just doomed to pay exhorbitant and inflated prices.

The other company in question actually has quite a nice showroom, and many employees including several degreed experts in medieval arms, as opposed to working from a trailer. I wonder how it is that they can sell items so much cheaper, to the tune of hundreds of dollars less per item?

My grasp of these types of dealings is a bit limited, and thanks for your explanation. All the same, not quite sure I am entitled to the "Pal" appellation. It sounds very "tough guy" and all, but to my knowledge we are unaccquainted.

[Edited by Soulend on 11-29-2000 at 02:55 PM]

Rhomyn Escalante
29th November 2000, 21:21
Originally posted by Soulend

All the same, not quite sure I am entitled to the "Pal" appellation. It sounds very "tough guy" and all, but to my knowledge we are unaccquainted.

"Pal" is just a colloquialism. I'm an OG and there is no intended slight.

Jason Dingledine
30th November 2000, 04:14
Hello,

Part of the reason why MRL can afford its lower prices and the showroom, is because they are owned by Windlass Steelcrafts (which also owns Atlanta Cutlery). When Windlass took over, they brought with them a large set of deep pockets from their other industry (medical equipment if I remember correctly), unfortunately WS also forced MRL to break ties with Del Tin who provided them with european swords and blades, and use swords and blades produced by them in India.

Other internet companies have undercut so much (by selling either at a loss, or only $10-15 above wholesale). I know of a few companies that have done this that put themselves out of business in the process. This was hurting the stone and mortar business that had rent to pay, and CASI (which is actually based out of Tn.) simply started enforcing a pricing policy on its items. Del Tin has a similar policy, so that there are no price wars between his distributors.

Price wars and undercutting eventually harms the consumer, since it devalues the items that are purchased. Something that would have been sold at a traditional 100% mark-up (double the wholesale price), may only be sold at a 50% mark-up (wholesale price is now 2/3 of sale price), and this takes directly from a companies profits, and in turn weakens its ability to serve its customers.

This is not meant to be a flame, so if I have irritated anyone, I apoligize now for it.

Jason Dingledine

Soulend
30th November 2000, 07:18
Thanks Jason! I certainly learned something..hmm. I had thought that WS was simply under contract from AC/MR to produce swords/knives, etc. Was thinking though, if the other companies brought their prices down as well, would this not lead to increased sales? Although the retailers would not have as big a profit margin per item, wouldn't they sell more items? And this would seem to benefit the distributor and the manufacturer, since they would still be getting the same amount per sword, but now "moving" a lot more swords. LOL, perhaps I'm too naive for business.

Rhomyn, sorry, just couldn't get the vision of Cagney outta my head, talking out of the side of his mouth: "Now look here pal, I go heeled see, and it's gonna be curtains(pronounce 'coitins') for ya...). BTW, what's an OG? Surely not "Original Gangsta"! :bandit:

Rhomyn Escalante
30th November 2000, 14:15
Originally posted by Soulend
Was thinking though, if the other companies brought their prices down as well, would this not lead to increased sales? Although the retailers would not have as big a profit margin per item, wouldn't they sell more items?

Doesn't work. If you sell too much, you must increase manufacturing, that costs more money, if it costs more money to meet the demand of sales, the price of the pre-finished product goes up and that must be passed along, finally raising the cost of the retail product. It is easier and faster to raise the cost of the retail product, wait and see about sales then the product line and profit margin isn't disrupted. The only time a retail product should go down in price, is when there is a change in the technology of either the manufacturing, distributing, whole selling, or retailing of that particular product. (see the marketing history of the VCR). Bugei Trading Company changed the sword market when J. Williams and J. Wilhoite began working with Paul Chen (sorry I don't remember his proper name). Paul Chen had the ability to change a portion of the above mentioned manufacturing line. It was, cost of labor. Cost of labor was cut dramatically. Then Paul Chen found an incredible amount of great British (German technology) steel (aka Chinese RR track). At the same time Paul Chen had a factory in place and the expertise to produce actual forged and folded blades. That was 5 or six years ago. And from what I've read, they have come a long way since then with the end product that they put on the market today, as well as everyone else in the sword business.


Rhomyn, sorry, just couldn't get the vision of Cagney outta my head, talking out of the side of his mouth: "Now look here pal, I go heeled see, and it's gonna be curtains(pronounce 'coitins') for ya...). BTW, what's an OG? Surely not "Original Gangsta"! :bandit:

No, I am older than the term Gangsta. Even tho OG use to mean Original Ganster, vis a vis, LA (Americans of Mexican descent- read: Zoot!) street gang slang. It only means "old guy" when applied to me:}

[Edited by Rhomyn Escalante on 11-30-2000 at 03:33 PM]

Soulend
1st December 2000, 17:11
Yes, I see your point. Thanks for the explanation. Hehe, I'm no spring chicken myself.

Joss
2nd December 2000, 01:15
Guys,

No one should be paying more than the minimum price they can find. The idea that a manufacturer has to set a high price to protect their customers is completely flawed. I can't believe I'm reading that in the US, land of capitalism & free enterprise...

That argument is the one that is used by luxury goods companies, that have gross margin that are at least 50%. It's also the argument that is used in Europe and Japan to protect small, overpriced convenience stores. The results in such cases are clear:
1) The customer gets shafted;
2) The industry develops a comfortable layer of fat...

Now, I'm not saying that CAS is immoral, or anything. CAS' business is to make money - period. People invested their hardly earned $$$ in CAS to get a return. CAS has invested heavily to get a license, and they're trying to maximize their return. Nothing bad in that. If they do have an exclusive license, and that their distributors agreed to have fixed prices, so be it - and that should be enforced for everyone.

But let's be clear: the idea that a managed market (this is how this would be called if it was a macroeconomic policy) is ultimately good for the customer because it allows manufacturers to spend more on customer service, etc, is pure crap. Customers are smart enough to decide what they want to pay for - are you willing to pay more for additional service? Do you perceive a better customer service, more options, a better convenience, faster delivery, etc, and how much more are you willing to pay for that?

Typically, in a free market, for a given product, you'll get a range of price. What companies do there is that they try to de-commoditize the product - offer different service to make them dissimilar. For example, you might get a better price for a book on another site than Amazon, but will you get the same availability, CS, etc. A managed market sets a floor to the price level, that is legally enforced rather than driven by the customers. Now, think carefully about that: if it needs to be enforced legally, the chances are it's because the customers would not have been willing to pay for it by themselves.

Now, what happens in a totally free market? Well, that depends how easily a product can be de-commoditized. The non-exclusive Chen swords are basically commodities, i.e., there's no difference from one store to the next (one may have a better return policy, etc, but in that case it doesn't appear to be the case.) In the case of commodities, eventually merchants have to compete on price. Note that it doesn't mean that the profitability suffers, but it certainly keeps everybody on their tows, and it makes for a less warm and fuzzy business environment. Note also that in such an environment, the bigger player will dominate (because they can spread fixed costs over larger sales.)

I love Bugei. They offer a brand name I trust, a one-stop shopping, a broad range, etc. Just because of their forum and the wealth of info it provides to me, I'm probably willing to pay at least 10% more than the best price I could find elsewhere, I also believe that if there is a contractual agreement on pricing between CAS and their vendors, it should be respected. But a managed market is **not** for the eventual benefit of the customers.

JD

PS: That type of price fixing - a contractual agreement between a manufacturer or distributor and their retailers - is not illegal. What's illegal is when all the producers of a given good agree to set the prices at a certain level. That's called collusion, and will get you directly to jail, without going through Start. ;-) The difference is that the contractual agreement doesn't hurt competition: if someone else finds a way to import a similar good, and decide to sell them 20% lower, there's nothing you can do to prevent that.

[Edited by Joss on 12-02-2000 at 07:17 PM]

Soulend
2nd December 2000, 07:48
Here, here!

Rhomyn Escalante
4th December 2000, 15:26
Originally posted by Joss
Guys,

No one should be paying more than the minimum price they can find. The idea that a manufacturer has to set a high price to protect their customers is completely flawed. I can't believe I'm reading that in the US, land of capitalism & free enterprise...

Capitalism: "I do not think that word means what you think it means"!

Free Enterprise: "I do not think that phrase means what you think it means"!

But you had a great post. I enjoyed reading it. I am voting for you when ever or where ever you run for office, and if you ever own a business I want to be one of your customers.

Sincerely.