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brokencycle

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Are there insane licensing fees or some other factor in their COGS or do the expensive designer styles just have huge profit margins?
I don't work in the consumer space, but from what I have gathered, it is just huge profit margins. Herman Miller and Knoll both have gross margins 30%+ and net income 10%+, and other luxury goods/fashion brands have 50%+ gross margin and 15% net income.

My best guess is that licensing is more expensive than having in house designers, but a place setting like that probably has on the order of $20-30 in COGS, so before any licensing cost, you're looking at 80-90% gross margin.
 

imatlas

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Quality costs.
 

true.to.size

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Moving away from Northern Europe...

Here's what I use. My partner and I picked them up in Seoul. They are a slighltly updated version of traditional Korean bangjja (bronzeware). I dig the elongated forms. They require an occasional polishing (and these pictured haven't been polished in a while).

Didn't opt for a full set. We just use the basics anyway.

20201025_120450.jpg
 

imatlas

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Those margins are almost as fat as they are in the cloud software business
 

double00

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i like the fiskars, i wouldn't want to daily a really barreled up heavy flatware personally (even though those often look good imo), i like sort of flat profile and lighter weight feel but not crazy about those 35s as a design

it would be nice to see alternative materials to steel for flatware

i keep thinking about this scene with the mexican redware and wood spoons

 

R.O. Thornhill

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Think someone may have mentioned David Mellor previously. Some really good looking stuff! Prices are not Pott crazy, but maybe ~50% higher than the likes of Alessi and Georg Jensen.

Anybody know about the quality level? Some of the designs I like below.

David Mellor London:
View attachment 1483894

David Mellor Minimal:
View attachment 1483895

David Mellor Odeon:
View attachment 1483896
As mentioned we have the Chelsea set for everyday. The quality is excellent - good weight and nice matte finish. Great value in my opinion

ROT
 

R.O. Thornhill

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I don't work in the consumer space, but from what I have gathered, it is just huge profit margins. Herman Miller and Knoll both have gross margins 30%+ and net income 10%+, and other luxury goods/fashion brands have 50%+ gross margin and 15% net income.

My best guess is that licensing is more expensive than having in house designers, but a place setting like that probably has on the order of $20-30 in COGS, so before any licensing cost, you're looking at 80-90% gross margin.
I really don’t think 10-15% operating profit is in any way crazy. Difficult to cover cost of capital at below 10% EBITDA for almost any consumer facing business
 

brokencycle

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I really don’t think 10-15% operating profit is in any way crazy. Difficult to cover cost of capital at below 10% EBITDA for almost any consumer facing business
If you look at a traditional retailer like Target, its net earnings are in the ballpark of 4%.
 

FlyingMonkey

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Moving away from Northern Europe...

Here's what I use. My partner and I picked them up in Seoul. They are a slighltly updated version of traditional Korean bangjja (bronzeware). I dig the elongated forms. They require an occasional polishing (and these pictured haven't been polished in a while).

Didn't opt for a full set. We just use the basics anyway.
I like these a lot except that I really don't like metal chopsticks.
 

TheFoo

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I’ve seen a number of comments mentioning preference for “flat” flatware. This strikes me as odd. Generally, you want sufficient curvature or angle to keep food on your fork or in your spoon more easily. Good flatware should be very “3D”. In contrast, disposable plastic utensils are very flat—think about how hard it is eat with them. Soup with a disposable plastic spoon is no fun.
 

true.to.size

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I like these a lot except that I really don't like metal chopsticks.
These are particularly divisive. They are flat instead of round, and many people find them difficult to use. The theory is that the flat ones are more ergonomic and easier to use for a long period of time, but it definitely takes some getting used to. I've started to prefer them. I believe this flat shape, as well as a preference for metal, is fairly contained to Korea.
 
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double00

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fwiw comment for *flatness* has to do with the handle i think

i'd prefer wares with more of nouveau lines, flattish through the handle but yes with dimension
 

R.O. Thornhill

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If you look at a traditional retailer like Target, its net earnings are in the ballpark of 4%.
Retailer vs brand owner. The difference is huge. If you basically just sell other people’s brands at huge scale you can of course manage at lower EBITDA (5% is good for grocery retail). But the model is very different if you develop brands. Have a look at the profit margins of big brand owners vs retailers. And then at the economic profit creation / return on capital.
 

brokencycle

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Retailer vs brand owner. The difference is huge. If you basically just sell other people’s brands at huge scale you can of course manage at lower EBITDA (5% is good for grocery retail). But the model is very different if you develop brands. Have a look at the profit margins of big brand owners vs retailers. And then at the economic profit creation / return on capital.
I agree. My point was just that the higher the value of goods the higher the profitability, generally. Hermes has much higher margins than Ralph Lauren.
 

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