Originally Posted by spud6414
No doubt! I bet they dont outlay $50 either, closer to 5 or 6. IF WE refused to pay it.......That would help too!
The raw materials probably aren't that
cheap, even in volume. Plus they have to ship the things halfway across the world once they're made, which does drive their real cost up (though obviously not close to $500.) They may also face import/export duties, etc.
You also have to factor in the R&D costs (they paid a lot of money up front for this), and obviously there is significant overhead simply in being a "name brand" company with offices, marketing, salespeople, etc. It's a little simplistic to just say "this thing contains $10 in materials! How can they sell it for $500?!!"
Anyway... any time you see a "new" name brand item being sold at a large discount from its MSRP (electronics, clothing, etc.), it is either:
1) A "grey-market" import -- someone is buying them cheap where they are manufactured (maybe even legitimately), then bringing them to the US themselves (usually not paying import taxes) and reselling them for less than the manufacturer does here. You see this a lot with TVs, cameras, etc. -- big-ticket items where they can be reshipped cheaply enough to make up the difference and then some. If the import taxes were paid then this is legal, although some manufacturers don't like it and you usually will have no warranty coverage if something is wrong.
2) Items that failed quality control being resold illegitimately. Some manufacturers do resell these "seconds" at factory outlets, etc. -- but if you're getting it from some random guy on ebay, it's probably going out the back door of the factory instead of being destroyed. Sometimes the defects are minor (say, one sleeve being slightly shorter than the other, or a seam having the wrong shape), and sometimes they are major (like your jacket not actually being waterproof.) Sometimes they tell you about the defects, and sometimes they don't.
3) Unauthorized production from either the same factory or another factory. This is apparently becoming an increasingly large problem for companies contracting out to make high-value clothing/shoes/handbags/etc. The factory produces more items than the manufacturer actually wants, then resells the extra on the side. Sometimes they just take the plans to another factory and start cranking out as many as they can get away with. Hard to prove, and hard to stop since China is pretty lax on IP laws. These items are of very high quality (often -- but not always -- nearly indistinguishable from the real deal), but you're completely screwing the manufacturer by buying them.
4) "Look-alike" knockoffs, usually of vastly inferior quality. These are usually easy to tell apart if you can see them in person and know what the real one should look like, although obviously if you are buying something on ebay you may have little to go on.
Personally, I don't buy anything that I know or strongly suspect is counterfeit (categories 2-4 above). IMO you're stealing indirectly from the manufacturer if you do so, but not everyone feels that way.