Why is off-road lighting so expensive?

[4x4TruckLEDs.com]

I get you guys, but let’s be honest really there are lots of small companies out there trying to get rich quick or trying to pay for their machining equipment off the first handful of sales (exaggerated of course) how many times have you seen where a product had maybe a couple hundred bucks at most (being extremely giving) in materials most times only a few bucks then they’re trying to charge thousands for said product come on it’s borderline extortion lol

I mean... it's hard to argue for or against that since I don't know what people pay for things.

Let's take my buddy who runs a Firearms store.

Now you can build a rifle yourself for about $500 in parts maybe (the most expensive parts being the Upper at around $75 and the barrel at around $100).

Well my buddy charges $110 normally for his lower. Okay so he's about $35 more then others. And he's making them himself! So he doesn't have to PAY someone for THEIR product right. HIGHWAY ROBBERY you'd think. He's making a KILING!

BUT... ever wonder how much a CNC machine cost? Well figure $250k for a CNC machine.

You're also going to need to hire a guy to operate that. Figure his salary is what $75k a year?

Now, how many $110 lowers do you think he's gonna have to make to re-coupe that $250K + $75/year cost. Don't forget, that's just machine/labor costs. You also have to buy the raw materials. I forget how many lowers he says he can make out of a blank piece of billet.

Sooo yeah... NOT exactly a MONEY MAKER now is it?

That same process is what you see elsewhere. Got a guy laser cutting brackets? Well that laser cutter cost money. The brake (bends the metal) cost money. Powder coating costs money. It all ads up. TIME costs money.

So if it costs the guy $50 to make it, what's he supposed to sell it for? $60? How is he EVER going to re-coupe his costs making $10 profit on every single one he sold when he's out how much in equipment and labor?

The guy at McDonalds is making more then he is at the end of the day!

YES, eventually after a year or two (depending on volume) he might start to turn a profit but the guys not exactly getting RICH is he?

Same with us. We have our KR Off-Road brand. And people LOVE to complain about the pricing. BUT there's a lot that goes into it. We have to sell it at a certain point at retail so that WE make money. We also need to price it so that our DEALERS can make money as well.

We also DISCOUNT the product when bundled as a kit.

Did you guys know we spent $15,000 on a 3D scanner to help us make components? That's pretty expensive! I need to sell a LOT Of brackets to make that up.

Honestly, MANUFACTURERS make the most when they sell retail, but a small portion of their business is retail these days. Baja Designs and Diode Dynamics sell to dealers and they rely on the DEALERS to sell their products. They sell direct of course, which is where they WILL make $$. But most of the sales are to dealers, so their profit margins get cut. And dealers have to pay the manufacturer, so our profits are not as high as people think.

Fun fact, I LOVE talks like this. I love explaining to people the INSIDES of running a business because a lot of people just don't honestly know what goes into it.

I wish I could make huge profits on everything I sold and didn't have to worry about paying anybody... back when I started my company in my basement, that's kind of how it was. BUT I also was 1 guy, had no retail store, no insurance, no overhead (since I didn't stock much of anything) and at the same time, if a customer needed something they had to WAIT now because I just didn't stock anything. Nor was I available via the phone back in the day, since I ran things at night.

Fast forward to today. I'm a lot bigger then I was but the profits are NOT as high as they used to be... but we're here for our customers pretty much 24/7. We have retail business hours, but im also the owner so I'm ALWAYS online looking to help folks. I sleep 6 hours a night, that's basically the only time people can't reach me... and yet i'm making LESS PROFIT now then I used to when I was alone in my basement.

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[AttackGuy64]

I get you guys, but let’s be honest really there are lots of small companies out there trying to get rich quick or trying to pay for their machining equipment off the first handful of sales (exaggerated of course) how many times have you seen where a product had maybe a couple hundred bucks at most (being extremely giving) in materials most times only a few bucks then they’re trying to charge thousands for said product come on it’s borderline extortion lol

Those companies are fly by night and won't be around very long. You can never raise prices enough to float your business when you have a crappy product. Once the word is out, your are screwed. The only model where that may work for a while is drop shipping cheap chinese crap. You can fool enough suckers for a while to make a profit, but you are creating dissatisfied customers that will never repeat their business. I buy Baja Designs because they work and they last forever. If you break a lens or want to swap lenses, you just buy a replacement. They also sell products for every budget. Can't afford LP9s (who can)? Get some S2s while you save up. You can pull them off your front bumper later and convert them to backup or chase lights. That's what I did.

Disclaimer - I am not associated with 4x4 Truck LEDs or Baja Designs. No products or money were exchanged for my worthless opinion. Use promo code ATTACKGUY64 for a 0% discount at checkout.

 

[JediMcMuffin]

LEDs are DIRT cheap, you are right about that. They make things cheaper. It's probably the least expensive part of the light. There's a lot more to the light then just the LED.

The circuit boards cost money. And to do it right with the right components, costs money. There's more to a light then the diode. Open up any Diode Dynamics or Baja Designs light and you'll see all that goes into it outside of the LED itself.

Then the housings. This has got to be the biggest expense of them all. Some are using a CNC machined housing. Others had to go to a molded process. But they are still big/expensive to make.

Let's not forget about MOLDS and what those costs. @Diode Dynamics & @Baja Designs care to share what a mold costs you guys, because I know it can cost a LOT of money, especially if you make a mold and then have to REVISE it later for some reason.

Molds for the housings
Molds for the optics
Molds for the bezels

(and that's if you are not CNCing them out of a piece of metal)

So that 20 cent LED diode isn't where all the costs are.

You're absolutely right. It took buying some DD lights from you to open my eyes on the quality difference. I'm more of a buy once cry once mentality these days. I literally gave away 8 pairs of cheaply made pod lights for free to install 2 x LP6 Pros which absolutely crush that other garbage. So that first $181 got me going on the trail for two years and now I have a much better appreciation for quality.

So, stick with cheap solutions if that's what gets you out there and wheeling. When you're ready to have nice stuff, choose well and perhaps you can be more conservative on your choices.

 

[Cux211]

I mean... it's hard to argue for or against that since I don't know what people pay for things.

Let's take my buddy who runs a Firearms store.

Now you can build a rifle yourself for about $500 in parts maybe (the most expensive parts being the Upper at around $75 and the barrel at around $100).

Well my buddy charges $110 normally for his lower. Okay so he's about $35 more then others. And he's making them himself! So he doesn't have to PAY someone for THEIR product right. HIGHWAY ROBBERY you'd think. He's making a KILING!

BUT... ever wonder how much a CNC machine cost? Well figure $250k for a CNC machine.

You're also going to need to hire a guy to operate that. Figure his salary is what $75k a year?

Now, how many $110 lowers do you think he's gonna have to make to re-coupe that $250K + $75/year cost. Don't forget, that's just machine/labor costs. You also have to buy the raw materials. I forget how many lowers he says he can make out of a blank piece of billet.

Sooo yeah... NOT exactly a MONEY MAKER now is it?

That same process is what you see elsewhere. Got a guy laser cutting brackets? Well that laser cutter cost money. The brake (bends the metal) cost money. Powder coating costs money. It all ads up. TIME costs money.

So if it costs the guy $50 to make it, what's he supposed to sell it for? $60? How is he EVER going to re-coupe his costs making $10 profit on every single one he sold when he's out how much in equipment and labor?

The guy at McDonalds is making more then he is at the end of the day!

YES, eventually after a year or two (depending on volume) he might start to turn a profit but the guys not exactly getting RICH is he?

Same with us. We have our KR Off-Road brand. And people LOVE to complain about the pricing. BUT there's a lot that goes into it. We have to sell it at a certain point at retail so that WE make money. We also need to price it so that our DEALERS can make money as well.

We also DISCOUNT the product when bundled as a kit.

Did you guys know we spent $15,000 on a 3D scanner to help us make components? That's pretty expensive! I need to sell a LOT Of brackets to make that up.

Honestly, MANUFACTURERS make the most when they sell retail, but a small portion of their business is retail these days. Baja Designs and Diode Dynamics sell to dealers and they rely on the DEALERS to sell their products. They sell direct of course, which is where they WILL make $$. But most of the sales are to dealers, so their profit margins get cut. And dealers have to pay the manufacturer, so our profits are not as high as people think.

Fun fact, I LOVE talks like this. I love explaining to people the INSIDES of running a business because a lot of people just don't honestly know what goes into it.

I wish I could make huge profits on everything I sold and didn't have to worry about paying anybody... back when I started my company in my basement, that's kind of how it was. BUT I also was 1 guy, had no retail store, no insurance, no overhead (since I didn't stock much of anything) and at the same time, if a customer needed something they had to WAIT now because I just didn't stock anything. Nor was I available via the phone back in the day, since I ran things at night.

Fast forward to today. I'm a lot bigger then I was but the profits are NOT as high as they used to be... but we're here for our customers pretty much 24/7. We have retail business hours, but im also the owner so I'm ALWAYS online looking to help folks. I sleep 6 hours a night, that's basically the only time people can't reach me... and yet i'm making LESS PROFIT now then I used to when I was alone in my basement.

I’ve been around machining and machinist my entire life I know what machines cost, your example of your buddy at $35 above the “norm” is 100% acceptable easy that’s not what I’m talking about what I’m getting at is people that have say $100 in raw aluminum say then try and charge the customer $1200 because it went through their machine that cost 250k it at the point of lunacy these days

 

[Cux211]

I mean... it's hard to argue for or against that since I don't know what people pay for things.

Let's take my buddy who runs a Firearms store.

Now you can build a rifle yourself for about $500 in parts maybe (the most expensive parts being the Upper at around $75 and the barrel at around $100).

Well my buddy charges $110 normally for his lower. Okay so he's about $35 more then others. And he's making them himself! So he doesn't have to PAY someone for THEIR product right. HIGHWAY ROBBERY you'd think. He's making a KILING!

BUT... ever wonder how much a CNC machine cost? Well figure $250k for a CNC machine.

You're also going to need to hire a guy to operate that. Figure his salary is what $75k a year?

Now, how many $110 lowers do you think he's gonna have to make to re-coupe that $250K + $75/year cost. Don't forget, that's just machine/labor costs. You also have to buy the raw materials. I forget how many lowers he says he can make out of a blank piece of billet.

Sooo yeah... NOT exactly a MONEY MAKER now is it?

That same process is what you see elsewhere. Got a guy laser cutting brackets? Well that laser cutter cost money. The brake (bends the metal) cost money. Powder coating costs money. It all ads up. TIME costs money.

So if it costs the guy $50 to make it, what's he supposed to sell it for? $60? How is he EVER going to re-coupe his costs making $10 profit on every single one he sold when he's out how much in equipment and labor?

The guy at McDonalds is making more then he is at the end of the day!

YES, eventually after a year or two (depending on volume) he might start to turn a profit but the guys not exactly getting RICH is he?

Same with us. We have our KR Off-Road brand. And people LOVE to complain about the pricing. BUT there's a lot that goes into it. We have to sell it at a certain point at retail so that WE make money. We also need to price it so that our DEALERS can make money as well.

We also DISCOUNT the product when bundled as a kit.

Did you guys know we spent $15,000 on a 3D scanner to help us make components? That's pretty expensive! I need to sell a LOT Of brackets to make that up.

Honestly, MANUFACTURERS make the most when they sell retail, but a small portion of their business is retail these days. Baja Designs and Diode Dynamics sell to dealers and they rely on the DEALERS to sell their products. They sell direct of course, which is where they WILL make $$. But most of the sales are to dealers, so their profit margins get cut. And dealers have to pay the manufacturer, so our profits are not as high as people think.

Fun fact, I LOVE talks like this. I love explaining to people the INSIDES of running a business because a lot of people just don't honestly know what goes into it.

I wish I could make huge profits on everything I sold and didn't have to worry about paying anybody... back when I started my company in my basement, that's kind of how it was. BUT I also was 1 guy, had no retail store, no insurance, no overhead (since I didn't stock much of anything) and at the same time, if a customer needed something they had to WAIT now because I just didn't stock anything. Nor was I available via the phone back in the day, since I ran things at night.

Fast forward to today. I'm a lot bigger then I was but the profits are NOT as high as they used to be... but we're here for our customers pretty much 24/7. We have retail business hours, but im also the owner so I'm ALWAYS online looking to help folks. I sleep 6 hours a night, that's basically the only time people can't reach me... and yet i'm making LESS PROFIT now then I used to when I was alone in my basement.

You’re also going the extreme opposite of what I was trying to say if a guy spends $50 bucks to make something no I don’t expect him to sell said part for $60 that’s just stupid and honestly kinda take that as an insult lol it would be completely reasonable for that part to be say $150-$300 bucks depending on what went into it I’m talkin about the ones that have $100 in materials then try and charge $1200 for the part come on, to many have the get rich quick mentality anymore

 

[indio22]

Because it can be. I guarantee the profit margins are absolutely vomit worthy. LEDs were supposed to make everything cheaper and power efficient and we're being suckered into paying WAY more for what should be less expensive technology. I don't get it either.

Now that being said, go get a light off Ali Express and compare the housing to a Baja Designs light.

What bothers me is when the LED light source is not plug and play replaceable, like I use to do when replacing halogen bulbs in my older vehicles. Instead we are looking at considerably more money having to replace the entire light assembly.

Also somehow I have low cost LED lights fitted in all my home lighting fixtures, but for vehicles the costs after switching to LED light sources have multiplied. It's not some new technology anymore.

 

[85_Ranger4x4]

I have cheap AUXbeam ditch lights on our Bronco, honestly after 2 years they are still better than the factory LED headlamps lol.

 

[Sitruc_btb]

I assume the quality of the parts used, and being built in USA. Maybe Baja Designs is suited for actual race cars or baja trucks, and might be overkill for a daily driver.
I bought a set of amber fogs from Black Oak LED. Built in Florida. Pretty decent pricing.

 

[5GENIDN]

You’re also going the extreme opposite of what I was trying to say if a guy spends $50 bucks to make something no I don’t expect him to sell said part for $60 that’s just stupid and honestly kinda take that as an insult lol it would be completely reasonable for that part to be say $150-$300 bucks depending on what went into it I’m talkin about the ones that have $100 in materials then try and charge $1200 for the part come on, to many have the get rich quick mentality anymore

I think what the disconnect here is that there may be $100 in materials, but then there is $400 in labor with a 40% overhead to break even..... (different industries have different expected overheads so I do not know this industry).... That is not profit, that is cost. Cost of product is now $900.... can they sell it for $1200? $1300?

You have good companies that are right at those numbers... Then you have someone come in and they have $60 in materials and $150 in labor with a 35% overhead. The product is way inferior (ie. crap) but this company sees their's as a similar product and tries to beat the price at $1000.....

Who is screwing who here? Yes company 2 will go out of business (no one will buy their product) once word gets out about their quality.... So they close down and change names and do it all over again. Red flags always go up for me when you can buy the same product under 2, 3, or more names.... Are they anticipating word getting out on one of the product "names" and they just shut that one down and go to the next name????

That is why I like going to trusted established businesses. It is also why a lot of small start up businesses have a difficult time establishing themselves... because people like me, do not always want to take the chance on a company that is not established.

 

[5GENIDN]

I assume the quality of the parts used, and being built in USA. Maybe Baja Designs is suited for actual race cars or baja trucks, and might be overkill for a daily driver.
I bought a set of amber fogs from Black Oak LED. Built in Florida. Pretty decent pricing.

I have some Black oak as well... but they have been around for quite a while and are probably more known in the nautical arena.....

 

[Newdoc]

As quality and craftsmanship get to a certain level, then the scale of economics goes exponential. For example, you can buy a speaker to get you 95% of your listening needs for $100. The last 5% that get you to 100% will cost you 5-10x that amount. I think a lot of people are looking for value on here and that unfortunately can be a tough find with the LED market changing so much.

I'm not going to spend multiple hundreds for ditch lights because I may need to light a ditch up only a couple of times a year. More frequent off roaders may see value in the hundreds of dollar lights because they need it every week.

 

[DefNotBuddyLee]

@4x4TruckLEDs.com didn't even account for his snack candy that he boxes for you instead of having a snack to eat himself that day plus the sweet shirt I got.

I mean, there is also the R&D for these products. Baja Designs didn't just find some leftover components and build the next gen of lights. They probably tested a number of things, tried some new ideas, and made a number of molds for design. Once they've done that though, then you get the cheap off-shore copy cats, that are typically of lower quality for reasons already mentioned.

But sometimes there is just a niche market with limited options and then you get capitalism. Do you think it costs Matt $5k-$7k to recover your vehicle from the trail, or is it because AAA isn't coming to get your vehicle? You pay for his experience, his crew, his time, taking risk, and most importantly his willingness to come help where others won't.

 

[4x4TruckLEDs.com]

@4x4TruckLEDs.com didn't even account for his snack candy that he boxes for you instead of having a snack to eat himself that day plus the sweet shirt I got.

I mean, there is also the R&D for these products. Baja Designs didn't just find some leftover components and build the next gen of lights. They probably tested a number of things, tried some new ideas, and made a number of molds for design. Once they've done that though, then you get the cheap off-shore copy cats, that are typically of lower quality for reasons already mentioned.

But sometimes there is just a niche market with limited options and then you get capitalism. Do you think it costs Matt $5k-$7k to recover your vehicle from the trail, or is it because AAA isn't coming to get your vehicle? You pay for his experience, his crew, his time, taking risk, and most importantly his willingness to come help where others won't.

Ya know those hats and shirts we give away are like $15 each. We have them made here on Long Island. So YOUR business helps OUR business and helps ANOTHER small business on Long Island. Basically 5 companies benefit when you buy a fog kit from us, 6 technically

1) The Light Company
2) Us
3) Our Sheet Metal partners
4) Their powder coating partner
5) Out apparal company
6) My wiring guy
7) We can also throw the box company into the mix sine we have to ship the box
8) The shipping company

So basically 8 companies get paid by the time you guys get a fog light kit from us. You can see how those CRAZY PROFITS dissapear fast

 

[Gene Dios]

That's not actually true... Nobody is making a killing on anything. In fact, business right now is slow for everybody and a lot of vendors are having a tough time right now.

A lot of people forget what goes into selling something. I have the following expenses before I even get to give myself any kind of salary

-Inventory
-Rent (as I have a retail store/warehouse)
-Insurance
-Payroll
-Electricity
-Oil (we're on oil here for heat) or A/C in summer
-Internet
-Credit card fees (we don't charge our customers so this comes out of our end)
-E-Commerce storefront fees
-Marketing (we spend a FORTUNE on google/facebook marketing) not to mention all the forums we're on
-Discounts (because we offer discounts, and that takes a HUGE chunk out of profits)

Finally, after all that MAYBE I get to pay myself, as an owner, something. I'll be honest though, and every business owner will tell you the same thing. We are the LAST PEOPLE who make money and sometimes don't.

Sooo all of this costs money.

It also costs a lot of money to make lights.

Baja Designs makes their lights BY HAND. Diode Dynamics makes their lights BY HAND. They don't have some automated system building them. SURE the circuit boards might come off an assembly line, but there's an actual human that is soldering the components, screwing down boards, making the light a LIGHT. That guy gets paid a living wage too.

Unlike overseas lights which are cheap because they don't pay their workers a living wage, american made products cost money because of what goes into them. When you buy something from an american company you are helping to put food on someones table. Pay someones rent. Give someone an education.

There's more to buying any product basically then paying "cost". Too many people want "a deal" and "just give it to me for a little over cost" but fail to realize ALL the other factors that go into it.

Not too often you see someone acknowledge the working class and the fact that people need a living wage to live. Respect, sir.

 

[Cux211]

I think what the disconnect here is that there may be $100 in materials, but then there is $400 in labor with a 40% overhead to break even..... (different industries have different expected overheads so I do not know this industry).... That is not profit, that is cost. Cost of product is now $900.... can they sell it for $1200? $1300?

You have good companies that are right at those numbers... Then you have someone come in and they have $60 in materials and $150 in labor with a 35% overhead. The product is way inferior (ie. crap) but this company sees their's as a similar product and tries to beat the price at $1000.....

Who is screwing who here? Yes company 2 will go out of business (no one will buy their product) once word gets out about their quality.... So they close down and change names and do it all over again. Red flags always go up for me when you can buy the same product under 2, 3, or more names.... Are they anticipating word getting out on one of the product "names" and they just shut that one down and go to the next name????

That is why I like going to trusted established businesses. It is also why a lot of small start up businesses have a difficult time establishing themselves... because people like me, do not always want to take the chance on a company that is not established.

I’m the same way I don’t buy crap I buy from established businesses and take it a step further and try to stick to the ones that are known for taking care of their customers and not gouging over the years I’ve had to step away from certain companies that I dealt with for years because their pricing got absurd. I have several very good examples but don’t want to use company names in the open. Think I need to add because this has sorta spun out of control I am in no way shape or form pointing fingers at 4x4 truck leds I believe they are one of the “good guys”

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