Post
Topic
Board Mining (Altcoins)
Re: Swedish ASIC miner company kncminer.com
by
KS
on 18/05/2013, 11:05:59 UTC
It's not that far fetched at all, think of it as a brand new shop opening up and they need to create new clients so the mechanic has a grand opening sale and offers cheap at cost oil changes. I have seen many new mechanic shops do this and it works well. Consider it as advertising. It's a good idea as the need for new products comes along the reputation of the company is well enforced through the products durability and the fact their in the hands of those customers already.

I like it.makes sense. As everything else the more they build the cheaper the RnD

It's not far fetched but it's not in the right market for barn sales.

Consider this:

-WHEN do you do barn sales? When you have inventory.
-WHY do you do barn sales? To get rid of inventory.
-HOW do you make money on barn sales? By buying liquidated inventory (i.e. ex-bankrupcy, overstocks, etc) or selling high margin products cheaper (like tire sales).

-Do they have inventory? No.
-Do they want to get rid of said inventory? No, it's a lossleader, not overstock.
-Will they make money on the inventory? No, it's a lossleader.

As Bitcoinorama rightly pointed out, the Mars sale is a way to lock you into buying a Jupiter. It's not to make a profit to fund development, they're pretty much selling at cost already. They'll make their money when you send yours for the preorder.

Bitcoin mining is a niche industry. In niche industries, you don't do barn sales, you sell know-how at a high price. The performance leader sets the price. If you have a low price, you're automatically "less good" and/or suspicious.

You shouldn't mix commodity market techniques and niche markets. They won't work together because of the low volumes. If you did do barn sales, you wouldn't make any money and YOU'd be the one whose inventory gets bought by bankrupcy sharks. It niche markets, you need to be a performance leader.

edit: when I mean they sell at cost, I don't mean it will just cover the BOM. I consider the R&D and other normal company expenses as well.