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Home Brew Forums > Home Brewing Beer > Equipment/Sanitation > Why are carbonator caps so expensive?
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Old 12-12-2010, 09:18 PM   #31
bendavanza
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I don't think the carbonator caps are durable or well made. It's easy for a 2L bottle, empty, with a cap on it to fall, because they are top heavy, and then the cap breaks. I have a cracked one. Another complaint I have is they tend to leak when attached to co2. In other words, they work fine for me to put pressure on a 2L but not to leave hooked up to my gas lines. I have 3 of these things, one is cracked and the other two I am paranoid about now. My local HBS told me they've gone through a few generations of the product due to breakage.

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Old 12-12-2010, 10:59 PM   #32
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Originally Posted by Catt22 View Post
I'm actually quite surprised that someone has not wrangled a Chinese manufacturer to crank out some knock-offs for pennies per unit. Could probably sell a bunch of them on Ebay at $5.00 each at least.

There is one thing I think we have overlooked and that is product liability. The carbonator caps could potentially fail catastrophically (ie explode under pressure) and cause a personal injury. An expensive lawsuit would be sure to follow. Liability insurance would be a necessity and it would surely bump up the cost more than a little for such a limited production item.
That is an issue I didn't bear in mind, considering the company actually carries some sort of liablilty insurance.

I understand it comes down to supply and demand in its most simplest form, but there is absolutely no competition when it comes to a like product that utilizes the same disconnects creating convenience.

As far as monopolization is concerned, another manufaturer need only make a slight difference to their design to avoid any patent issues. I unno if you can patent an idea, but it seems to me that when there is no competitor (monopoly) that the only supplier can pretty much charge whatever they want for their product. When that price is too high (profit margins are out of bounds) then ultimately they are only hurting themselves because consumers won't want to pay the price for their product.

Of course, a competitor offering a similar product (I mean the same product in essence) it is obvious that someone will have to offer a better price to compete with the original supplier who already has a name in the market, and a product that is trusted and familiar.

My whole point to this thread was that these things are ridiculously expensive. Like I mentioned earlier, unless osme guy is cranking these out one-by-one there is no way they are costing even half ofthe retail price. Any smart business person would be making large volume purchases from supppliers to keep the total cost of each unit to a minimum.

Assuming the mold that makes these things can push out lets say 8 units per injection (which is conservative for how small these pieces are) and there is a 1 minute time/cost per batch, in a 24 run, over 11,000 pieces could be made considering ther is no down time, or material shortages etc...

These would cost next to pennies to make. I guess what I'm getting at is there seems to be some gouging happening in their profit ratio. The only other thing that I can think to take into consideration is the storage of these items if they don't move fast enough. It cost money to store them considering they aren't using a JIT model for production, which could actually lower their cost assuming storage fees are part of their extremely high price.

Having said all of that, I guess it doesn't matter, if no one is going to compete with them, the price isn't going to change.
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Old 12-12-2010, 11:28 PM   #33
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Originally Posted by Schnitzengiggle View Post
Assuming the mold that makes these things can push out lets say 8 units per injection (which is conservative for how small these pieces are) and there is a 1 minute time/cost per batch, in a 24 run, over 11,000 pieces could be made considering ther is no down time, or material shortages etc...
I think one of the most overlooked aspects of this thread is the idea of market size. Some people have alluded to it, but let's take a look at some numbers:
The AHA estimates that there are at least 750,000 people who brew at least once a year at home. The AHA itself has 19,000 members.
In my own homebrew club (Covert Hops of Atlanta), I would estimate that about half of the brewers keg. The rest bottle-condition. Of those who keg, most use growlers or bottles that have been counterpressure filled (myself included). This includes people who use beer guns, the stopper-and-racking-cane method, and all other counterpressure methods. Also, let's assume that non-club members will include a lot of ultra-casual homebrewers who are unlikely to pay the expense of a kegging setup for a hobby they indulge in one or twice a year. So, the percentage of keggers will be maybe 25%.

The long and the short of it is there may be a market of maybe 30,000 of these in the US (this number came from the above numbers plus some rectal extraction). While I'm sure it's off (in what direction is anyone's guess), if they can make 11,000 per 24-hours they could pretty much saturate their market in a little over a workweek if they run one shift per day. Also, if you consider that most people who buy these will buy only one, the economics of scale simply aren't there. Even if half of all US homebrewers (casual and serious) buy one each year, then it would only take about 100 eight-hour days to saturate the market based on Schnitzengiggle's numbers. Factor in die-making, tool depreciation, setup-and-teardown time, and all of the other overhead, and something that you only need to make for 100 days a year isn't much of a bargain. If you also account for small-batch shipping, packaging costs (and the time/energy involved with packaging), the numbers only get worse.

I'd love to hear some counter-analysis that shows that there is a much larger market than this, but if there isn't, you can forget an economy of significant scale.
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Old 12-12-2010, 11:59 PM   #34
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I am pretty sure this thing is two molded parts actually. There is the outer cap itself, and an inner molded insert that houses the poppet. I don't think there would be a way to mold this thing solid with a spring loaded poppet all in one piece.

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Old 12-13-2010, 12:26 AM   #35
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There's another factor no one's talked about yet - retail markups. The homebrew shops presumably are going for gross profit margins of 30% - 40% (gross margins - just the sales cost of a good related to how much you paid for it, not including salaries or electricity or marketing or any other overhead). Figure that a $20 CC, they're probably paying $12 or $13 for it, at most.

Figure as well - let's say you get the manufacturing and packaging down - how are you going to sell them? Not sure how the distribution models work, I *think* there are a couple of big distributors that sell most products to the shops. You've either got to convince a distributor to carry your version of the same product they already sell, or convince hundreds of stores around the country to do the same.

And what's your selling point? What's the marketing angle?

"We'll sell it for $15, instead of $20"?

I just don't see it making any sense to try and shoehorn in on this.

1. It's a tiny market and inherently limited (maybe 30k potential customers, maybe a few more, but very limited repeat sales; you buy one and you're good)

2. All of the costs of the mold-making and other manufacturing costs

3. If you're trying to compete on price, you're probably looking at selling these to the retailers for maybe $10 a pop. Doesn't leave a lot of room for margin expansion.

And, there's no real potential for scale. You aren't going to start selling these more broadly unless you figure a way to 86 the need for a full CO2 tank. Maybe if you could create carbonated beverages using a simple, CC-like device that used the CO2 chargers or a simple regulator, you could sell to the health-food market. As currently conceived, CCs require that you have a full kegging setup, which basically limits you to *us* as the entire end market.

And... if you're right, and they ARE selling these way over cost... the original manufacturer is going to knock you on your ass, because they've already paid all the setup costs and gotten the distribution arrangements and done all that hard work. They're in a much better position to undercut YOU on cost, because their costs have mostly already been paid.

This feels like the Dragon's Den....

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Old 12-13-2010, 12:26 AM   #36
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I am confused on this product. Is it used to keep the carbonation in beer that has already been carbed and put into a 2L, or is it used to carb uncarbed beer put into a 2L?

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Old 12-13-2010, 12:29 AM   #37
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You can use it for both purposes. I bought mine to carb up a pumpkin beer that wasn't quite ready when a friend was in town and now I use it to keep beer carbed.

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Old 12-13-2010, 12:31 AM   #38
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I am confused on this product. Is it used to keep the carbonation in beer that has already been carbed and put into a 2L, or is it used to carb uncarbed beer put into a 2L?
Mostly to maintain carbonation on already-carbed beer (in lieu of filling a growler), but they can also be used to carbonate other beverages.
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Old 12-13-2010, 01:18 AM   #39
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Just keep your eyes peeled. I bought 3 of them 1 at a time for about $8 each with shipping. There awesome for early testing beer. I use a 1 liter pop bottle to samlpe my 15 gallon batches before I rack and carbonate it all to see if I need to make any adjustments.

Still cheaper than getting a 2 1/2 corny till I find one cheap.

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Old 12-13-2010, 02:29 AM   #40
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Quote:
Originally Posted by matthewkbridges View Post
I think one of the most overlooked aspects of this thread is the idea of market size. Some people have alluded to it, but let's take a look at some numbers:
The AHA estimates that there are at least 750,000 people who brew at least once a year at home. The AHA itself has 19,000 members.
In my own homebrew club (Covert Hops of Atlanta), I would estimate that about half of the brewers keg. The rest bottle-condition. Of those who keg, most use growlers or bottles that have been counterpressure filled (myself included). This includes people who use beer guns, the stopper-and-racking-cane method, and all other counterpressure methods. Also, let's assume that non-club members will include a lot of ultra-casual homebrewers who are unlikely to pay the expense of a kegging setup for a hobby they indulge in one or twice a year. So, the percentage of keggers will be maybe 25%.

The long and the short of it is there may be a market of maybe 30,000 of these in the US (this number came from the above numbers plus some rectal extraction). While I'm sure it's off (in what direction is anyone's guess), if they can make 11,000 per 24-hours they could pretty much saturate their market in a little over a workweek if they run one shift per day. Also, if you consider that most people who buy these will buy only one, the economics of scale simply aren't there. Even if half of all US homebrewers (casual and serious) buy one each year, then it would only take about 100 eight-hour days to saturate the market based on Schnitzengiggle's numbers. Factor in die-making, tool depreciation, setup-and-teardown time, and all of the other overhead, and something that you only need to make for 100 days a year isn't much of a bargain. If you also account for small-batch shipping, packaging costs (and the time/energy involved with packaging), the numbers only get worse.

I'd love to hear some counter-analysis that shows that there is a much larger market than this, but if there isn't, you can forget an economy of significant scale.
The above has it nailed. Home brewers are a very small market. Only a fraction of that small market would have the required CO2 equipment and some minority of those may make a one time purchase of a carbonator cap. Surely there would be some repeat customers, but they will be relatively few and far between.
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