How DJI keeps it's prices low relative to such a high quality product..

[cgmaxed]

From TORRE CAPITAL: "High Volume and Low Price Point Strategy: the firm aims for profit margins in the low single digits to ensure competitors cannot offer a similar drone at a lower price point. The fruit of the company’s early start and commitment to cost control show in their manufacturing prowess. DJI consumer-level quadcopters have been outperforming their competitors in terms of drone size, stability, image quality, and battery life since the release of its Mavic pro series in 2016."

Because they have such a huge market share around 70%. They are willing to make only a small profit off their drones compared to other manufacturers. I believe if they didn't have a hold on such a huge chunk of the market, they wouldn't be able to under cut their competitors.

 

[DroneZone Samui]

Without a doubt Dji drones are on the highest level, compared to the (almost non-existent) competition in the "high quality" consumer sector...

They are willing to make only a small profit off their drones compared to other manufacturers

However, this statement can be discussed. For example, the Mavic Air 2, which, according to the teardown video (see below), is sold with a margin of at least 400%

If you compare it with the cell phone market, in which are many more "players" in the top area ... the margin there is rarely more than 200%-300%

But we hope

Here is the link to the "DroningON" Video:

So it's not that the good boys from Dji are satisfied with a small profit ... It's more the fact that they can and do "high pricing" as market leaders ...

 

[cgmaxed]

Well, I guess, that article I read regarding how DJI has became so successful is not totally accurate. Hmmm. Maybe they were speaking relative to other drone manufacturers? But is seriously doubt it. I agree with you.

 

[Bill Dunnuck]

It is difficult in any industry to find a 70 percent dominate player that maintains its donimance year after year. Their products just keep getting better and less expensive. Plus they create such a near hysteria in the market for those waiting on new releases. DJI is an interesting case study.
Bill Dunnuck
Naples, Fl

 

[tlswift58]

From TORRE CAPITAL: "High Volume and Low Price Point Strategy: the firm aims for profit margins in the low single digits to ensure competitors cannot offer a similar drone at a lower price point. The fruit of the company’s early start and commitment to cost control show in their manufacturing prowess. DJI consumer-level quadcopters have been outperforming their competitors in terms of drone size, stability, image quality, and battery life since the release of its Mavic pro series in 2016."

Because they have such a huge market share around 70%. They are willing to make only a small profit off their drones compared to other manufacturers. I believe if they didn't have a hold on such a huge chunk of the market, they wouldn't be able to under cut their competitors.

LOW PRICE! I think not, when you look at the other makers and their "look alike" drones are half the price or more. I've not owned any of the knock-offs and don't plan to, yet DJI to me CHARGES a premium.

They have a virtual lock right now and they tell resellers what they can sell for / etc.

Yes, R&D is expensive and so that goes into the price. Knock-off's don't worry about that or have that expense to copy what DJI puts out there - so, sure they can charge much less. Autel is another drone maker that innovates it's own products, but I don't look at those either. Yuneec is another which was kind of big a few years ago, but don't hear a lot about them these days. They have fairly high prices too and are not DJI copies.

Even with insurance - DJI Refresh is almost double what most people pay for a private insurance policy from like State Farm (USA). So, I think Torre Capital is blowing a lot of hot air.

 

[Dave Maine]

The problem with this analysis is that he looks at only the parts cost.

To make a DJI Drone requires lots of expensive engineering to design the hardware, more expenses for software development, and robotic manufacturing facilities to assemble them. None of this is free.

A fully costed analysis will probably come close to the modest profit described.

 

[dirkclod]

I don’t care what DJI cost for what I get it don’t matter.
Sorry but after being in all the forums I wouldn’t buy anything
else. Fanboy yes but that’s where I’m at and read in all the other
forums. ?‍

 

[cgmaxed]

I don’t care what DJI cost for what I get it don’t matter.
Sorry but after being in all the forums I wouldn’t buy anything
else. Fanboy yes but that’s where I’m at and read in all the other
forums. ?‍

As a fan. Perhaps you'll invest if they put out an IPO. DJI is considering it. I'd possibly buy a few shares of stock if they went public.

 

[cgmaxed]

Who wants DJI to enter the stock market !? Would any of you invest?

 

[dirkclod]

As a fan. Perhaps you'll invest if they put out an IPO. DJI is considering it. I'd possibly buy a few shares of stock if they went public.

Yeah I would too. Always a fan and always will be.
Will quit before I used anything else.
Any thing else ?

 

[maggior]

LOW PRICE! I think not, when you look at the other makers and their "look alike" drones are half the price or more. I've not owned any of the knock-offs and don't plan to, yet DJI to me CHARGES a premium.

They have a virtual lock right now and they tell resellers what they can sell for / etc.

Yes, R&D is expensive and so that goes into the price. Knock-off's don't worry about that or have that expense to copy what DJI puts out there - so, sure they can charge much less. Autel is another drone maker that innovates it's own products, but I don't look at those either. Yuneec is another which was kind of big a few years ago, but don't hear a lot about them these days. They have fairly high prices too and are not DJI copies.

Even with insurance - DJI Refresh is almost double what most people pay for a private insurance policy from like State Farm (USA). So, I think Torre Capital is blowing a lot of hot air.

You get what you pay for with those clones. The budget drone arena is getting better, but the prices are creeping up. Video quality has gotten better, but dji is in another league. I have some higher end budget drones and I could never fly them with the confidence and precision I can fly my ma2. Mini 2 owners seem to have a similar experience. The price gap between good budget drones and the mini2 is closing. Lower end budget camera/GPS drones are just junk, dangerous junk.

Dji may be more expensive but there is a very definite and clear upgrade in quality. They also service and repair...cheaper drones you DIY if you are lucky enough to get spare parts. Customer service for a faulty design of a budget drone is a free replacement after the drone crashes itself into a tree. I see it all of the time in other forums. Lots of people spending good money after bad because eventually they won't replace for free!

Dji is far from perfect, but I think their customer service is head and shoulders over the budget brands.

Where I think you can see a lot of value is when you compare the high end mavic 2 pro and the mavic air 2. The pro 2 is clearly priced for the pro...but the ma2 has much the same functionality with quality in the same league....and is somewhere around half price. Mavic 2 pro is overkill for me...ma2 is just right. They know their customers and their market!

 

[AZDave]

Without a doubt Dji drones are on the highest level, compared to the (almost non-existent) competition in the "high quality" consumer sector...



However, this statement can be discussed. For example, the Mavic Air 2, which, according to the teardown video (see below), is sold with a margin of at least 400%

If you compare it with the cell phone market, in which are many more "players" in the top area ... the margin there is rarely more than 200%-300%

But we hope

Here is the link to the "DroningON" Video:

So it's not that the good boys from Dji are satisfied with a small profit ... It's more the fact that they can and do "high pricing" as market leaders ...

Sorry, but you made a ridiculous summation that didn't even correspond to the video. Raw piece part cost is a small fraction of the cost that goes into a drone like any of those from DJI. There are the design and development costs, which can be formidable and require upfront funding (think debt and the interest on it). There is the software cost ... those people don't come cheap. It takes engineering to port a product into manufacturing even if the board stuffing and other assembly is contracted to someplace like Foxconn. It takes overhead to manage all of those efforts, and it takes a LOT of money to navigate all of the regulatory agencies around the world ... not to mention whatever payoffs might be on the table in China. And then, of course, there are the marketing and international distribution costs, which can be very large. Finally, there are the customer support and replacement costs ... do you think DJI is making money on their Fly Away program.

Several of those clarifications were made in the video but you decided to ignore them. I'm sure that DJI is making a healthy margin on their products. They certainly should be if they have 70% market share. But I guarantee it isn't anything like a markup of "at least 400%."

 

[JeffreyS]

The overwhelmingly major factor in how consumer products are priced has to do with the quantity of the product that is produced. Since DJI sells a lot of units, the manufacturing costs per unit are lower.

 

[AZDave]

The overwhelmingly major factor in how consumer products are priced has to do with the quantity of the product that is produced. Since DJI sells a lot of units, the manufacturing costs per unit are lower.

That's partially true in that scale does lower manufacturing cost, but the real overwhelming factor for high volume consumer products is how the volume spreads all of the fixed overhead costs better. It doesn't take twice the design, development, engineering, marketing, and support cost to sell twice as many units and for many electronics companies those overhead costs can be two to three times the variable costs (costs that directly track the number of units).

For the record, I used to be the operations manager with P&L responsibility for about $300 million annual sales of commodity electronics components until I retired, and I was on the board of directors for two different offshore manufacturing joint ventures.

 

[DroneZone Samui]

Raw piece part cost is a small fraction of the cost that goes into a drone like any of those from DJI. There are the design and development costs, which can be formidable and require upfront funding (think debt and the interest on it). There is the software cost ... those people don't come cheap. It takes engineering to port a product into manufacturing even if the board stuffing and other assembly is contracted to someplace like Foxconn. It takes overhead to manage all of those efforts, and it takes a LOT of money to navigate all of the regulatory agencies around the world

I agree with almost everything ...
I would like to say that I'm not an expert in electronics products, I'm actually from the hotel / restaurant industry.

There is a very simple formula:
1/3 costs the raw products, 1/3 costs the cooking work, service, rent etc. (sales) and everything that it takes until the product stays with the guest (buyer) ... in the end the last third as profit ...

Even if we calculate generously: material costs including controller and accessories .... let's say 200 ... and the work, development, marketing and sales ..... let's say other 200 .... so these are $ 400 until the Mavic Air 2 is in the buyer's hand ...
In my opinion, it shouldn't cost more than $ 600? Yes? (But is my personal opinion)

 

[Meta4]

As a fan. Perhaps you'll invest if they put out an IPO. DJI is considering it.

Can you point to a source for this information?

 

[cgmaxed]

Can you point to a source for this information?

Mainland drone giant's IPO could take flight

The world's largest maker of non-military drones, the mainland's SZ DJI Technology, is said to be considering an initial public offering in Hong Kong, though people within the company claimed they had...

www.thestandard.com.hk

Will the DJI Drone IPO finally take off in 2021?

DJI Innovations is evaluating an IPO in mainland China and Hong Kong in early 2021. In this article, we evaluate the merits of the world’s…

medium.com

Oh and Google: "DJI considers IPO".
Their valuation is at 18-20billion dollars now, An IPO may be offered when their valuation hits 25 billion. The decision will be up to DJI itself. I don't think they need or want the money they would get from an IPO, but who knows. The creator of DJI owns 40% of the company. Self made billionaire.

Read the articles.

 

[cgmaxed]

Can you point to a source for this information?

Let every one know what you think, after you have read the two articles in their entirety.

 

[cgmaxed]

Yeah I would too. Always a fan and always will be.
Will quit before I used anything else.
Any thing else ?

In post #17 I gave Meta4 sources of DJI's possible consideration of an IPO. It would probably be offered through Nikkei. It may be put on the table for consideration when DJI's evaluation reaches 25 billion dollars or more. I think it's around 18 billion now.

 

[dirkclod]

In post #17 I gave Meta4 sources of DJI's possible consideration of an IPO. It would probably be offered through Nikkei. It may be put on the table for consideration when DJI's evaluation reaches 25 billion dollars or more. I think it's around 18 billion now.

I read ,thank you .