Zoama, for sure the full prepayment is for cash flow generation. New companies that are growing fast like this one are always searching for cash flow. A small deposit on prepayment would not help much with the cash flow
I imagine it's much easier to get funding for a large shipment directly from the purchasers who want the units rather than try to stare down some steely eyed ultra Conservative Banker. The purchaser has a vested interest in the deal too, he or she gets a considerable discount by putting the money up front for the purchase.
The pre-order discount received on my pp256 was about $325 from the book price including the included A81 torch upgrade.
The machine arrived about a month after payment. This means the annualized rate of return on the prepayment is: $325/1799= 18% (in one month) x 12= 216% per annum
The bank is currently paying me 2% per annum.
I'm more than happy to hand the money over to Everlast a bit early and receive 108 times the bank rate of return.
The other factor that must weigh into it for Everlast is that in taking the prepaid orders they are working with a known set of numbers , that is they know that X units are sold and paid for, so it probably allows them to work on a larger scale, ie full containers instead of partials. Shipping in partial containers is also an incredible headache compared with ocean shipping one or more full containers. With partials a 2 week voayge can turn into 4 months as your container gets shunted around to half the countries in the world.
Must shut up now, the new Contest Prize Welder (Imig 200) is sitting in an unopened box in my truck.
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