So less material should = cheaper, but then I suppose there would be development costs. If you are targeting the mainstream then your sales numbers should be higher. How many people do you think we have on these forums? Now think outside the forum. Seems like 2000 should be attainable. Are FE powered vehicles really that small?
I think the issue is not whether or not 2000 blocks could be sold, but rather how long it would take to sell them. Selling at a lower price, it would take a long time to recoup costs from such a major investment. Typically, only big companies can do that sort of thing. Now if you could sell those 2000 blocks in one or maybe 2 years, that would be different. You'd probably recoup your costs within half of that timeframe.
When a company first releases their block or head, such as BBM did, you'll get a rush of sales, partly because a lot of guys have been looking, waiting or are just jumping on the opportunity while it's there. Once that initial rush is over, sales will probably drop pretty drastically and even out at a much lower rate.
I'm not a business man, so that was all guessing, but it seems to be logical.
Doug, you should be a business man because you are exactly right on this. A couple of my own examples: When my book was released in 2010, I sold 450 in the first month. Since then, I am still selling them but only average 10-15 a month. I re-couped my publishing costs on the first 400 books, but the costs of all that race gas, intake gaskets, sealer, etc. took me until 1000 books to recover. Never mind getting paid for all my labor. Don't get me wrong, I don't regret any of it, because I had a great time doing all those tests. But as a business proposition, it would be a loser.
It is basically the same story on my intake adapters, I had a list of more than 100 people who wanted them and it took me quite some time to fill those orders. As I went along building them some unexpected costs came up, and it ended up taking me 130 adapters to recover the tooling and machining costs associated with them. Now I'm caught up on my list for the medium riser adapters, and selling them on ebay in addition to selling them directly, and they go out the door at about one per month. So I'm making a little money on them, but nowhere hear enough to compensate for the hundreds of hours I put into that project. Again its a good thing I enjoyed doing it, because as a pure business proposition they are a loser.
Now let's look at this run of 2000 cast iron FE blocks. If the sale price is $1500, let's say that the cost of manufacturing, including amortizing the tooling over 2000 blocks, is $1000 per block. To commit to getting 2000 done, that is an investment of 2 MILLION dollars up front. I'm as FE-crazy as they come, but I would run screaming from a deal like that, even if I could afford it (which I can't). Maybe you could sell 250 in the first year, but I'll bet you'd be selling 50 per year thereafter, and it would take you 35 years to sell them all. From a gross profit standpoint you would make a million bucks, IF you could sell them all, over 35 years. No guarantees on that one. Meanwhile, you'd make more money investing in Treasury notes, and you wouldn't have to do any work. The whole project makes no sense, even for someone like me who isn't looking to make their living on it.
We have to recognize that the size of the FE market is such that custom parts are going to be more expensive than they are for a small block Chev or LS engine. Anybody who thinks different is welcome to make the big investment themselves, and see how that turns out!
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