[Elecraft] K2 price increase, RoHS

[Eric Swartz - WA6HHQ, Elecraft]

Larry is correct - parts costs for all amateur radio manufacturers have 
gone up significantly over the past 12 months. Raw materials like copper 
and Aluminum have increased in cost by 20-50% over this period. As an 
example, our complete K2 enclosure by itself costs $15 more to 
manufacture than it did 12 months ago. In addition to basic 
supply-demand competition for raw materials by China, India and the 
developing world, the impact of the European Community's RoHS 
requirement (reduction of hazardous substances) has been huge on all 
manufacturers. RoHS primarily covers the tinning of component leads with 
lead-free solder, but it also impacts the plating used on basic 
hardware, the types of plastics used etc. Ironically the EC has exempted 
all automobile battery, medical, telecom and military manufacturers from 
this requirement..  (Fortunately the use of regular lead based solder by 
individual builders is still OK.)

Elecraft has been 100% committed to converting to RoHS compliant parts 
on all of our products, and this has also put upward pressure on our 
costs. Many RoHS compliant parts (lead-free solder tinned leads etc.) 
have increased 20-40% over their previous prices. Only aggressive 
negotiating with our volume suppliers for large quantities of parts has 
allowed us to keep it under control. Fortunately we have been successful 
in finding RoHS leaded parts for the K2 and our other products. We 
planned for this transition over 18 months ago and we put the financial 
resources in place then to buy the additional RoHS inventory.

We have been holding off changing prices for over two years in an effort 
to see where things settle out. We finally concluded her had to adjust 
things last month. In fact, the $30 change on the K2 does not cover our 
total increase in costs and our overall percentage margin is slipping in 
order to keep it affordable for everyone.  We run a tight ship and this 
just means that we have to manage it even better as we move forward.  
Fortunately sales actually increased after the price change. :-)

If the current component cost trends continue I can see a similar rise 
in prices 6 months out. We'll work hard to contain this. Fortunately the 
K2, K1 and KX1 still provide the most fun and performance for the dollar 
on the ham radio market. :-) We'll keep building them as long as you 
keep buying them and telling your friends about us!

73, Eric   WA6HHQ
http://www.elecraft.com



Larry Phipps wrote:
>
> As I small manufacturer, I can certainly see where Elecraft is coming 
> from. Between the orders for my first and second runs of LP-100s, the 
> price of copper and aluminum have gone up considerably. I am paying 8 
> and 10% more respectively for my two enclosures on the current run.
>
> I also had to switch to RoHS compliant  parts and RoHS processing of 
> the PCBs and SMT assembly. Shipping costs have increased recently due 
> to fuel increases. Elecraft is also affected as I am by trying to keep 
> the bulk of the kits through-hole.  As parts suppliers find a smaller 
> and smaller market for those types of parts, prices creep up.
>
> If my prices increased over this short period of time, I certainly 
> can't fault Elecraft for raising it's prices after years.
>
> Larry N8LP
>
>
>
> Solosko, Robert B (Bob) wrote:
>> I too have been planning to add some additional options, and of 
>> course, it's disappointing to see a price increase, but let's be 
>> realistic -- it's only a 5% increase - while that could be a hardship 
>> for a few people, the additional $30 is not likely to prevent most 
>> people from purchasing a $600 piece of equipment (especially when you 
>> start adding the cost of all of the options that haven't gone up in 
>> price (yet)). The K2 is still well worth the cost...
>>
>> Bob W1SRB