OK it may be Western firms that are creaming off all the profits - 500% markups appear to be the norm but who made them? One day the huge profit making stuff will also be done in China.
No, the story I tell is quite the whole one, especially for smaller podunk firms like the ones we deal with here. I talk about the mentality because I've seen and been told about it first hand by people who do business there. It's the disease which along with corruption is keeping the country down. It's small mindedness and greed: quick buck today at the expense of tomorrow is how people do business when they don't have proper business education/training.
There's a reason why the western firms are making all the money while the hard laborers in china make jack shit. One understands how to conduct big business properly and one doesn't. From the frustrations we deal with in our budget hobby, I think this should be quite clear.
For example, in business school, you're taught to market certain products in 3 tiers. For the same mass product with possible differentiators, you have the low end basic, often loss leader, model to bring in the customer's interest. Then you have the medium tier model which has all the standard features most people want for a reasonable increase, and that's what most people would buy because the former is purposely somewhat crippled. Finally what you need is the top deluxe version which is purposely not a good value, and while some people will always may more for the best model, the point is to help the majority of your customers justify and find the value in their purchase. Instead, you see from china dozens of complete randomly permutated models from the same make, even for the same kind of light.
Ultrafire needs to stick to one general purpose medium size (18650?) cree light, the "best" but distinguished design (eg 504b with a twist in style), with maybe the lowest bin and no modes for cheap light, a good bin with modes for the one everyone buys, and a quad-die or xp-g with programmable modes for best model, and make all 3 with consistent quality. If you need to introduce a new model, don't just throw it up on the DX site; you need to announce the new big thing (2011 models!) and even build up a sense of anticipation at regular intervals. Then people aren't confused which one to get and why does the one I get differ from what my friend got last week, etc. While we addicts will buy all the variants, most normal people won't and that's where the money is.
From DX's persepective, they need to apply this pressure to the supplier instead of getting dragged along by them, but of course they won't because they feel the few pennies they make selling a few extra models on their site to some small time third-world buyer is totally worth it. Narrow minded thinking is what limits their business, and ironically we see dozens of copy-cats of exactly what they do WRONG. They have absolutely no business discipline and that's why they'll easily get crushed by any western company if they ever find some market segment that's making real money.
Again, a lot of good business practice is counterintuitive to those without the education, and usually the ones we see are the overly greedy type (the ones who made the mistake of going the other way tend to get squeezed out by the time they get to us in the west). What I'm saying is more constructive criticism than bashing, but of course they don't listen because they're idiots so I guess it might as well be bashing.
