It's seems Studio Prodjects has three (3) "No Profit" or "Loss Leaders" as you call them, the B1, B3 and C1. And if they lower the price of the C3 that might make four (4) "No Profit" mic's? Is that still legal?
While I am not exactly an expert in Law but I do have two Bachelors degree's (big whoop) and one of them is in business/marketing and yes this is completely legal.
You local grocery store has hot sale items every week in their add and just about everything on the front page ie pack of Coke for 99 cents or green beans 4/$100 are sold at no profit or a little loss. They are betting you will buy a few more things while you are there that they will make their money back and then some.
Or how about the "Buy 12 CD's now for a $1.00 and buy only 4 more in the next three years at our regular every day low prices..." obviously they are losing money selling the first 12 CD's for only a $1.00
BUT their every day "low" price, shipping charges etc allow them to make a profit in the long run. These are only a few examples.
To qualify as "Preditory practices" that are truly unethical and illegal a major player in their market niche... lets say Walmart moves into a town with two or three competitors and basically sells their whole line of same products for le ss than what they paid for them for the specific purpose of driving the smaller local business out of business. Then when the competition is gone the major player just raises prices back up.
The key points here are a large (preditor) competes unfairly by losing money longer than the competitor can afford to lose money and does so for the single purpose of driving them out of business.
Selling some things close to cost (and even below) to get your name out and develop distribution networks while selling some other products that have a higher profit margin is a completely ethical and accepted business practice.
Building your own designs that match performance (not copy) or beat the competitions designs for pennies on the dollar...that my friend is business genius and the very heart of the free enterprise system.
Any mom and pop operation FMR, Studio Projects etc is free to design, build and market a better mouse trap.
If they really do it well for a very competitive price with good quality for its price point the world will beat a path to its door.
This opportunity awaits anyone willing to put time, sweat and knowledge to work.
Believe me the big mic companies are not going to be put out of business any time soon by Alan but they are going to have to become more competitive.
Like Alan said we don't know him or his motives and should not assume we do but if you read between the lines of his comments I hardly think his goal is to drive Senhiser or Neuman etc out of business. Apparantly he supplies capsules to one or more of the biggies.
Tip of my hat to Alan
