True or False?

Brent Hutto wrote: And Mucky is right about the masks. The marginal cost of production of pieces that make up my Swift can't be more than a dollar or so yet good luck trying to buy nasal pillows for ten bucks.

Can't be more than a dollar or so? ROTFL.

I can see I haven't gotten through. We can't all be right, and I'm willing to admit I'm wrong if the numbers show that. So how about we work through some numbers, eh?.

We need to estimate a few things to do this. I'll throw out a few numbers, and expect to make corrections.
market size: 2 million people with apnea actively undergoing xPAP therapy
percent of market buying a particular mask: less than 5% (i.e., 100,000)
average cost for each plastic mold: $50,000
total number of molds per mask: 15
cost to design a mask: $250,000
manufacturing cost for all plastic parts: $5
manufacturing cost of headgear: $2
distribution costs per mask: $4
marketing costs: 20%
expected profit: 20%
middleman markup on mask: 100%

I'm making up these numbers off the top of my head, so feel free to tell me what needs to be corrected. Also, let me know if I've left out anything major.

The up-front costs are $1,000,000 before any masks are sold.
Amortized across 100,000 masks this is $10 per mask.
Total direct cost for each mask is then $21.
Adding marketing and profit brings this to $29.
Adding in the final seller's markup doubles this to $58, pretty darned close to the price of the comfort series stuff.

I suspect I'm low on the cost of doing business for these guys though. I suspect that it is probably a pretty inefficient industry.

BTW, how much does an architect make?
And, how much does a statistician make?
Remember, there are lots of mouths to feed in this food chain.

Regards,
Bill

Bill,

On those estimates I could not expect to do better at all

Good work

DSM

Could well be true.

I have had pro2 and Auto. They are alike except that the Auto has more parameters to set up in the Therpy menu.

At CPAP.com prices:
The Remstar Pro 2 costs $484.89.
The Remstar-auto costs $614.00, a difference of $129.11. That's really not a lot to pay for software. Just buying the Encore Pro software will cost $200.00 (although you could subtract $30 from that to account for the card reader.).

Regards,
Bill

NightHawkeye wrote:

wading thru the muck! wrote:Good point! This is similarily and to a greater degree demontrated by the fact that they sell masks that contain pennies of plastic for $100 plus.

Aw, come on now, Wader. Don't you think that's kinda like saying your computer contains just a little bit of sand. True as far as it goes, but many billions of dollars have been spent coaxing the sand to do quite useful and occasionally entertaining tricks.

Yes, but Bill, that sand does amazing things... the cpap interface is doing nothing but channel air into ones nose. ...and many here seem to need to hack theirs apart to get it to do even that satisfactorily.

wading thru the muck wrote:Yes, but Bill, that sand does amazing things... the cpap interface is doing nothing but channel air into ones nose. ...and many here seem to need to hack theirs apart to get it to do even that satisfactorily.

Excellent point, Wader. When you're right, you're right. Mask-makers have a corner on the market and take advantage of it. The cost to produce is pennies on the dollar. An absolute ripoff.

Yes, but Bill, that sand does amazing things... the cpap interface is doing nothing but channel air into ones nose. ...and many here seem to need to hack theirs apart to get it to do even that satisfactorily.

So the software to properly adjust your pressure based on the feedback you can detect through a 6' piece of tubing and give you a pressure relief when you exhale isnt amazing?

Anonymous wrote:

Yes, but Bill, that sand does amazing things... the cpap interface is doing nothing but channel air into ones nose. ...and many here seem to need to hack theirs apart to get it to do even that satisfactorily.

So the software to properly adjust your pressure based on the feedback you can detect through a 6' piece of tubing and give you a pressure relief when you exhale isn't amazing?

Yes it is! ...but you're talking about the sand and not the plastic.