Back a few years ago, I met with an engineer that has worked for several of the factories that build fitness equipment. He got tired of the big corporate structure so he went with an upstart factory but one that was going to compete more in the mass market so where he had a substantial budget in the past, the upstart was looking at every penny that he spent and how he built the machine to see if they could drive some of the cost out of it.
He recalled that he and the founder of the company had a heated argument over a few of the discreet components on the controller (the heart of the treadmill) and that the founder, of course, won taking about $5 out of the cost of the controller. This made the machine less reliable and eventually even though the $5 saved the company millions of dollars over the years, eventually it caused the company to go out of business, which cost the founder much more than what he saved.
I was faced with the same question. Our business has become more competitive over the years and when looking at costs of different items, we are always under pressure to lower costs so we can lower the cost of the product to the consumer but there comes a point when you have to decide, do you want to sacrifice quality for price. We haven’t yet and I don’t ever plan to marginalize the parts our customers get.
We have found ways to lower the price of some of our parts but when it gets to the point that we would have to offer a shabby part to our customers, we just exit that line of business. We did that with equipment mats. When we first started, we sold thousands of treadmill, elliptical, and bike mats but consumer preference changed and everyone wanted a cheap foam mat.
We would never sacrifice the quality so now we might sell a few hundred of the solid mats a year but they will last and last and last so they people who are willing to spend extra for quality get quality but we don’t allow our name to be associated with cheap products. That’s how we can afford to offer people free advice on how to fix their machines and what to look for when they buy their next treadmill or elliptical.
We figure that if you can fall asleep easily at night and know that you are offering people a good quality product at a fair price but don’t compromise on the important things, it is a sustainable business. When you see companies go out of business, it is almost always due to someone making an ill suited compromise…think ENRON!
The only way to correctly build a treadmill is to put enough quality into the machine to make it last for its intended purpose and if you can’t built it for that price, don’t.