What percentage of a rope's cost is material?

Price, especially  for speciality goods, often has little to do with cost.  Price is generally dictated by "what the market will bear".  This is why something sold in a less developed market is can be a fraction of what the exact same product is priced for in North America.  Competition does restrain pricing, but not always.  There is a famous book on pricing (used in marketing classes) with interesting case histories on pricing strategy including examples of pricing increases leading to increased unit sales because of " perceived value" (if it's costly it must be good!).  Think about why an EPI Pen is sold for $200+ in the US and about $50 in Canada.

Matthew Bertolatus wrote: I've always assumed 2 big reasons why climbing equipment remains relatively expensive:
1. This stuff is all super low volume, in the grand scheme
2. Manufacturers need to maintain large product liability insurance policies

Ropes are CHEAP, historically speaking. 

My buddies and I bought our first "real" (kernmantle, brand name) ropes in 1976-77. I bought the cheaper one for $90. My buddy splurged for the $99 one. You can do the "adjust for inflation" math if you want, but the last rope I bought was $119 and the one before that was less than $100. By contrast, the best rock shoes money could buy back then cost $40.

Former Climber wrote:

If you scroll up, you’ll see I linked his page earlier.

What I mean is I’m unsure if Team Tough is an independent importer/distributor or if Jim runs it.  Not that it really matters from an end-user perspective.

Nope, you only linked their home page. He runs it.

Very cool question. I ran a quick search for bulk purchases of nylon ropes, Alibaba is coming up with hits starting for 1USD per 1 kg for rope; this is for  raw material + manufacturing.
Estimate ~80g per 1m for workhorse of a climbing rope, 60m will take you to ~5kg. This implies under 5USD worth of material in 60m of rope.

amarius wrote: Very cool question. I ran a quick search for bulk purchases of nylon ropes, Alibaba is coming up with hits starting for 1USD per 1 kg for rope; this is for  raw material + manufacturing.
Estimate ~80g per 1m for workhorse of a climbing rope, 60m will take you to ~5kg. This implies under 5USD worth of material in 60m of rope.

Which is squarely in the ballpark of my a priori estimate.

You know, I hope, that that cost of producing a good is NOT what determines the final sale cost of the good, right? Basic economics. 

Gunkiemike wrote:

Ropes are CHEAP, historically speaking. 

My buddies and I bought our first "real" (kernmantle, brand name) ropes in 1976-77. I bought the cheaper one for $90. My buddy splurged for the $99 one. You can do the "adjust for inflation" math if you want, but the last rope I bought was $119 and the one before that was less than $100. By contrast, the best rock shoes money could buy back then cost $40.

I wasn't speaking about ropes per se, but $90 in 1977 would be nearly $400 today!  Modern ropes are a great freaking deal!  Meanwhile the $40 shoes would be around $180 - what a ripoff!

Jim Titt wrote:

Probably in that region. The problem with guessing the future price depends if there is a shortage of butadien as the raw stock as it's a by-product of refining oil and the oil prices are rock bottom because the refiners aren't buying it. On the other hand the demand for nylon has collapsed so it's anyone's guess!

Someone can correct me if I'm wrong, but I think LNG prices are more relevant here

Senor Arroz wrote: You know, I hope, that that cost of producing a good is NOT what determines the final sale cost of the good, right? Basic economics. 

I would hope that "Basic economics" is wertfrei and doesn't bend to your hopes. 

The real answer is, of course, that volume largely determines supply, and cost only enters the picture in a highly competitive market. Assuming this is a competitive market and also assuming (yes, this assumption is much more of a stretch, pun not intended) that production can be ramped up to outstrip demand at current prices, this leaves room for the price to fall. Given the lower demand I think the second assumption is safe for now.

Matthew Bertolatus wrote:

I wasn't speaking about ropes per se, but $90 in 1977 would be nearly $400 today!  Modern ropes are a great freaking deal!  Meanwhile the $40 shoes would be around $180 - what a ripoff!

Are you calling TC Pros a ripoff?   

Trad Man wrote:

Are you calling TC Pros a ripoff?   

Only compared to the great deals we're getting on ropes nowadays. 

You may be thinking of this as-if price of inputs is what determines the sales price.

That's true for commodities. That's largely true for stuff that's been "commoditized" (e.g. that's so common & hard to distinguish that it sells as if it was a pound of aluminum... e.g. could be a service, like bandwith in a free telecom market for exemple). I'm not sure ropes have gotten to that point. To some extent, rope manufacturer can probably set prices according to other factors, such as the price they expect customers to be willing to pay.

Trad Man wrote:

Someone can correct me if I'm wrong, but I think LNG prices are more relevant here

LNG's primary relevance here is that surging gas supplies have driven down oil prices. LNG - essentially pure methane - is downstream of the separation of higher, more useful hydrocarbons. So while this upstream processing of natural gas does provide some feedstocks, I think the petrochemicals that ultimately become Nylon 6-6 are overwhelmingly derived from petroleum. I suspect coal is in 2nd place as a feedstock.

Idaho Bob wrote: Price, especially  for specialty goods, often has little to do with cost.  Price is generally dictated by "what the market will bear"... Think about why an EPI Pen is sold for $200+ in the US and about $50 in Canada.

Maybe not the best example. Canada has a Federal agency that's authorized to regulate the list price of any patented drug.

Perhaps a better example would be brand-name drugs that retail for more than generic drugs, despite being practically identical products.

Franck Vee wrote: You may be thinking of this as-if price of inputs is what determines the sales price.

That's true for commodities. That's largely true for stuff that's been "commoditized" (e.g. that's so common & hard to distinguish that it sells as if it was a pound of aluminum... e.g. could be a service, like bandwith in a free telecom market for exemple). I'm not sure ropes have gotten to that point. To some extent, rope manufacturer can probably set prices according to other factors, such as the price they expect customers to be willing to pay.

Commodities frequently end up selling for LESS than the cost it took to produce them. Oil, for example, is currently selling for less than the cost to produce it in most places. But people have to unload massive supplies somehow, so less of a loss is better than more of a loss. 

Senor Arroz wrote:

Commodities frequently end up selling for LESS than the cost it took to produce them. Oil, for example, is currently selling for less than the cost to produce it in most places. But people have to unload massive supplies somehow, so less of a loss is better than more of a loss. 

Good exemple. Though over the long run, they have to sell on average for more, I guess. But then, over the long run, costs for commodities (in real terms) seem to be mostly flat/declining. I don't remember where I got that, but for many commodities, if you track the prices since data/estimates are available, prices tend to be flat/declining over long (decades/centuries). Makes sense I guess - it's not much harder to extract the same, say, iron from iron ore than it was 100 years ago. But our means for doing so are probably much better....

At any rates, ropes & other climbing gear aren't commodities (thank god).

Martin le Roux wrote:

Maybe not the best example. Canada has a Federal agency that's authorized to regulate the list price of any patented drug.

Perhaps a better example would be brand-name drugs that retail for more than generic drugs, despite being practically identical products.

That's right. Insuline would be a better example than EpiPen, or I guess adrenaline (which is basically what an Epipen is - packaged adrenaline).

Former Climber wrote:

Your link doesn’t state that, Team Tough’s page doesn’t say that, and Jim above said they’re his importer, which may or may not imply ownership stake.

Want to argue ownership, ask Jim. 

I merely said I’m unaware of his involvement with a distributor, beyond supplier.  

Well if I was involved I'd call them my distributor but anyway Team Tough is completely independent.

Senor Arroz wrote: You know, I hope, that that cost of producing a good is NOT what determines the final sale cost of the good, right? Basic economics. 

Basic economics is that the cost of producing MUST be lower than final sales price otherwise you are bankrupt. Therefore the cost of production is the base determinant for the minimum sales price, if the costs over and above prodution (sales, taxes, profit etc) are too high there is room for a competitor so competition drives the price down but at the end of the day the competition still has to pay the cost of production, it literally is the bottom line.