Something has been bothering me for months now. Why are there so few American espresso machine manufacturers? The only three I've heard of are Salvatore (hand-built by an Italian), Astra Espresso, and Synesso. Why have we as a country not been able to produce something along the lines of a Silvia, a Tea, or a Vetrano? Is it due to the previously favorable exchange rate? I know many of the internal components (i.e. pumps, pressure stats, etc...) are manufactured in Italy. Any ideas?

*Edited to reflect reality...there are, in fact, American espresso machine manufacturers, just not a lot*

I think there's another one... Genasco? or something like that?

JetSteam?

So are there none or are there three?

I stand corrected, and have edited my original post to reflect that.

However, it still doesn't answer my original question. Many here gripe about being slaves to the Euro exchange rate, the sometime sketchy Italian work ethic/workmanship, or the fact that we almost always get a machine designed for 220v somehow converted to 110v. It seems there is an unrealized market here that is waiting to be tapped. It does not seem unreasonable to me to think you could manufacture a PID'd single boiler and sell it for $500.

JollyGreenBucket wrote:It does not seem unreasonable to me to think you could manufacture a PID'd single boiler and sell it for $500.

Not bloody likely.

Fair enough. Why not? If you were able to secure large lots of expensive equipment (PID's, SSR's, etc) at reasonable prices, it would bring the price down considerably. When we buy a PID, we're paying for everything from the manufacturer to us, right? Or am I naive on the way electronics pricing works?

JollyGreenBucket wrote:Fair enough. Why not? If you were able to secure large lots of expensive equipment (PID's, SSR's, etc) at reasonable prices, it would bring the price down considerably. When we buy a PID, we're paying for everything from the manufacturer to us, right? Or am I naive on the way electronics pricing works?

Because the economics don't support it at that price. If you expect to sell the machine in quantities that enable you to sell for 500.00 you're gonna be selling them in all sorts of department stores and other places. So there's markup involved there - say 40%. And you better be selling them yourself for twice what you're making them for or you're gonna go broke, as a ballpark estimate. So I got that you had better be able to make them for $180.00 each. Dunno how fast you can put an espresso machine together, but I bet you yourself can't put one together in half an hour, although someone might be able to do it if they were making large amounts of them. Better figure on paying that person some money. Lessee, if you're paying the poor guy 20 bucks an hour for mind-numbing work, you're really prolly paying him somewhere near to that again in other costs - least that is what the deal is around here, so now you gotta make the thing for 160 in parts. Ain't gonna happen.

We're not talking the scale of cars here.

-Greg

DavidMLewis wrote:JetSteam?

Yes. Made in Indiana.

For most industries involved in electronics, the rule-of-thumb is the MSRP is five times the cost of goods. The breakdown goes something like -

10% labor
17% to 20% material

Is the Cost of Goods. To that we add -

10% R&D
12% Administrative and Marketing (sometimes a lot more)
10% Warranty costs
??% Margin (aka profit) could run from 1% to 40% depending on the industry. Typically is around 33%.

From there, we sell to the distributors and retailers. Who typically add 10% to 33% on top of their costs.

So it roughly breaks down to - MSRP/5 = Mfg. cost.

So if an espresso machine retails for $500, then the cost of goods (out the Mfg. door) will have to be no more than $100.

Breaking this down further, the typical assembler on the Mfg. floor is going to make $8 to $15/hr plus benefits. The technician and QA folks are going to be making 10$ to 20$/hr. Then you have supervisors, Mfg. Engineers, and Process Engineers, who you have to pay even more.

If you look at most Consumer/Pro-sumer espresso machines, it's easy to see how they are "designed for assembly". A Silvia can probably be assembled - bare chassis, minus the skins, to be functional in about 20 minutes. A Quickmill Andreja shouldn't take more than 30 minutes to assemble to a functional state where they can be burned in and verified functional.

Of course one needs several assembly stations - subassemblies get put together on multi-purpose workstations by batches - wiring harness', boiler assemblies, group head assemblies, etc. Then, there's tracking parts inventories, ordering, stocking packing material, final assembly - put the skins on, final check out, boiler drain, final wipe down, packing, scheduling shipping, and actual shipping.

Plus, something always goes wrong - parts suppliers run out, sometimes tolerances go to extremes, bad lots arrive, etc.

Then, no matter how hard you try, nor how sophisticated the MRP system, nor how great the process control is, at the end of the quarter it's always a scramble resulting in overtime.

So to cover costs, one needs a high volume. Or one needs many common parts to create variations on a machine - i.e. re-using the E61 head on a dual boiler machine. And common parts is key. Adding a part means adding a part number, adding a part number means updating inventory control systems, additional logistics costs because now additional spares inventories need to be updated. In the end adding a $5 part may cost a company $50 or in a large company $5K.

Bob