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It turns out when you sell products near cost to gain as much market share as possible, not only do you shut them down, but you will eventually get shut down. W
by reportingsjr 14y ago
It turns out when you sell products near cost to gain as much market share as possible, not only do you shut them down, but you will eventually get shut down. Who would have thought?
- revelation 14y agoGiven the massive government subsidies, they were probably selling below cost. Hopefully the market recovers and we continue to see prices come down in double-digit percentages each year. With every price drop, the return on solar installations grows and the business model of companies like SolarCity grows more viable.
- jseliger 14y ago>Who would have thought? Amazon.com?
- reportingsjr 14y agoAmazon isn't in the same situation as solar companies though. Amazon has many other items they have a good margin on that helps them recoup their costs on the items they undercut on. Solar companies only have one item period.
- nikcub 14y agoMisplaced blame - selling at a loss to gain market share is a very well understood business growth method that works.
- reportingsjr 14y agoIt is a well understood tactic, sure, but I don't think my blame is misplaced. Companies who undercut everyone else normally either have other products that they aren't undercutting on that make up for the difference (see amazon), or they raise their prices back up a bit after they have gained market share. Chinese solar companies didn't have/do either of these and in the end this is what will happen. The market was hugely flooded over the last year and as such most US solar manufacturers are gone and the Chinese ones will start consolidating, live off more subsidies, and hopefully they stop selling at such a low margin so they can actually survive and compete fairly.