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Hyperwerk

Caselabs is shutting down.

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Dude, Caselabs is clearly not a huge operation. They're not stockpiling a lot of aluminium just like how our subsidiary isn't stockpiling a lot of steel either. We're not BHP who can eat huge losses because of their diversified product portfolio and immense cash flow. The folks over at the USA are eating a 40% increase in steel costs, that increase isn't trivial no matter how much some people in this thread want to suggest eating 40% increase in material costs are a normal thing to be able to adjust to.

 

Its just fortunate that our subsidiary can get clients to eat the costs because everyone supplying liquid tanks are dealing with the same price increases and there's a lot of profit margin in the design and consulting side. Unfortunately, this is not the same for businesses that deal in consumer goods and consumables who are really struggling right now. Some try and tough it out, some close down and some just move operations overseas like Harley Davidson. 

 

The actual increases in price and shortages were definitely unexpected. This isn't a case of BHP being good at divining commodity prices, something they'd probably be good at since they're miners who deal in commodities, this is a case of a government actually enacting on self destructive tariffs and US metal suppliers taking advantage of the situation to increase costs/strangle supply if recent rumors of price fixing are to be believed. It doesn't help that only the largest companies are getting tariff exceptions.

 

There's no disputing that their business model didn't make sense in this era of manufacturing where the majority of case manufacturers either operate on low margins/high volume or outsource their infrastructure/supply costs to Lian Li in the case of boutique mini-ITX case manufacturers. But to argue that the tariffs and sanctions had little impact on their demise is laughable in my opinion, every US manufacturer that sells consumable goods is struggling right now especially when larger companies are able to get tariff exceptions from the Whitehouse.

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I don’t think anyone said that was the only reason this includes casslabs. In fact reading the message posted on thier website they even phrased it to not only explain the reason for their cost increase but how it was the combination of that small profit margins and large defaults on payments. I was simply pointing out that in fact it seems very likely their material costs did go up 80% mostly because people seemed to think it was impossible when it actually seems quite legitimate and in line with what I have heard about the price of high grade aluminum in general. I don’t think anyone was claiming that alone was the problem just clarifying that “a 10% tariff not yet in effect” could very easily have increased their current costs by 80% in this case. I read thier message as “if all these things had not happened at once maybe the bank would have gave us more money”

 

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8 hours ago, dongsDOTtmp said:

Dude, Caselabs is clearly not a huge operation. They're not stockpiling a lot of aluminium just like how our subsidiary isn't stockpiling a lot of steel either. We're not BHP who can eat huge losses because of their diversified product portfolio and immense cash flow. The folks over at the USA are eating a 40% increase in steel costs, that increase isn't trivial no matter how much some people in this thread want to suggest eating 40% increase in material costs are a normal thing to be able to adjust to.

 

Its just fortunate that our subsidiary can get clients to eat the costs because everyone supplying liquid tanks are dealing with the same price increases and there's a lot of profit margin in the design and consulting side. Unfortunately, this is not the same for businesses that deal in consumer goods and consumables who are really struggling right now. Some try and tough it out, some close down and some just move operations overseas like Harley Davidson. 

 

The actual increases in price and shortages were definitely unexpected. This isn't a case of BHP being good at divining commodity prices, something they'd probably be good at since they're miners who deal in commodities, this is a case of a government actually enacting on self destructive tariffs and US metal suppliers taking advantage of the situation to increase costs/strangle supply if recent rumors of price fixing are to be believed. It doesn't help that only the largest companies are getting tariff exceptions.

 

There's no disputing that their business model didn't make sense in this era of manufacturing where the majority of case manufacturers either operate on low margins/high volume or outsource their infrastructure/supply costs to Lian Li in the case of boutique mini-ITX case manufacturers. But to argue that the tariffs and sanctions had little impact on their demise is laughable in my opinion, every US manufacturer that sells consumable goods is struggling right now especially when larger companies are able to get tariff exceptions from the Whitehouse.

I'm really not sure what you are trying to say here.  40% is not 80% and for the most part WAS expected, it was not sudden and out of the blue. Anyone who is watching the market regularly could have told you this was going to happen.  No one is suggesting anyone should be able to eat an increase in cost, I am saying that there is no way the increase was 80% and no way the tariff "played a major role".  Remember they said this:

Quote

The tariffs have played a major role raising prices by almost 80% (partly due to associated shortages), which cut deeply into our margins

Hmmm, could it be that some of the shortages were due to other businesses who had the foresight to see the spike in cost and buffer their stocks?  Yep, absolutely that happened.  Could caselabs do that?  nope, why? because they were already heading to bankruptcy.  The tariff played little role in that.  At best the tariff was the straw that broke the camels back.

 

 

Look at all the posts of people saying how over priced their products were and how they have so many orders that the wait time was months. That is not a sign of a business about to go bankrupt unless the reason the orders are taking that long is because they are not managing their stock. 

 

You seem to have missed the point by thinking that the size of BHP somehow changes the message.  Commodities change price and futures trading is a thing.  If your company depends on base metals being below a certain cost then you buy when it is and you stock pile when you can, failing to be able to do that means your business model is not feasible, tariff or not.  You don't have to have a business degree to work that out.

 

 


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36 minutes ago, mr moose said:

That is not a sign of a business about to go bankrupt unless the reason the orders are taking that long is because they are not managing their stock. 

I remember when Jay was talking about visiting them sometime in 2015 - it was a +- 10 man operation with a machine shop, I wouldn't be surprised if they didn't have a single case ready for next day shipping. 

 

TBH I got the impression that they were basically making the cases to order and the wait time was always at least a week if not longer.


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6 minutes ago, Lathlaer said:

I remember when Jay was talking about visiting them sometime in 2015 - it was a +- 10 man operation with a machine shop, I wouldn't be surprised if they didn't have a single case ready for next day shipping. 

 

TBH I got the impression that they were basically making the cases to order and the wait time was always at least a week if not longer.

They sort of did. If I remember right the most common parts they had some of but the less common was made when you order. At some point, when the orders where at max and they litterally closed for new orders (wait time was few months, don't remember exactly how long) they had very few to no parts in stock.


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1 hour ago, Lathlaer said:

TBH I got the impression that they were basically making the cases to order and the wait time was always at least a week if not longer.

Way, way longer, depending on your order, of course.  It took 4 months(!) for me to get mine.

 


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7 minutes ago, jasonvp said:

Way, way longer, depending on your order, of course.  It took 4 months(!) for me to get mine.

Even worse then. 

 

I doubt that they were able to literally send dozens of cases every day - if we take that into account then the business model was hardly sustainable. I'm assuming that at some point they got an unexpected influx of orders and since then they have been on a constant backlog, sending probably one case every two weeks (that was ordered months ago).

 

It may sound weird but for a merchandise that had such a slow turnover they probably were not charging enough for them :D

 

The worst thing is that it's easy to say that they should've diversified and made one line of numbered limited edition high quality cases that would build them a brand and make revenue on something good quality but approachable in the cost ($100-200 tops) but I don't think they even had the infrastructure to commit to such scenario.

 

It takes additional space and machines and people to build a case fast and they did not have that. Not when they were struggling to catch up to their usual orders. 


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10 hours ago, Lathlaer said:

I remember when Jay was talking about visiting them sometime in 2015 - it was a +- 10 man operation with a machine shop, I wouldn't be surprised if they didn't have a single case ready for next day shipping. 

 

TBH I got the impression that they were basically making the cases to order and the wait time was always at least a week if not longer.

Their parent company is also going bankrupt.  It has also been reported that they have been having supply issues for more than 3 years now, which is why blaming the tariffs (especially to the degree they have) is disingenuous.

 

8 hours ago, Lathlaer said:

 

The worst thing is that it's easy to say that they should've diversified and made one line of numbered limited edition high quality cases that would build them a brand and make revenue on something good quality but approachable in the cost ($100-200 tops) but I don't think they even had the infrastructure to commit to such scenario.

 

 

Infrastructure is not really the problem if everything else works (a growing business you can build slowly or get a loan to support faster growth).  But mostly the business just isn't in the right location for what they are trying to do (tax, labour cost and logistics, most of which can be offset by the exchange rate alone when importing). 


QuicK and DirtY. Read the CoC it's like a guide on how not to be moron.  Also I don't have an issue with the VS series.

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20 hours ago, Lathlaer said:

Even worse then. 

 

I doubt that they were able to literally send dozens of cases every day - if we take that into account then the business model was hardly sustainable. I'm assuming that at some point they got an unexpected influx of orders and since then they have been on a constant backlog, sending probably one case every two weeks (that was ordered months ago).

 

It may sound weird but for a merchandise that had such a slow turnover they probably were not charging enough for them :D

 

The worst thing is that it's easy to say that they should've diversified and made one line of numbered limited edition high quality cases that would build them a brand and make revenue on something good quality but approachable in the cost ($100-200 tops) but I don't think they even had the infrastructure to commit to such scenario.

 

It takes additional space and machines and people to build a case fast and they did not have that. Not when they were struggling to catch up to their usual orders. 

What you guys describe sounds like the cost of (inefficient) labor was quite expensive.

The price of material is only a part of the final cost. If material's price is raised 40% by the tariff, the final price should raise by 20% or so at most which shouldn't kill their business outright.

 

I'm leaning on bad management and the tariff was a good way out for them.

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1 hour ago, mrthuvi said:

What you guys describe sounds like the cost of (inefficient) labor was quite expensive.

The price of material is only a part of the final cost. If material's price is raised 40% by the tariff, the final price should raise by 20% or so at most which shouldn't kill their business outright.

 

I'm leaning on bad management and the tariff was a good way out for them.

And that 40% figure is anecdotal and mostly in regard to steel, the actual aluminium tariff is only 10%, as calculated on the figures Pas008 gave earlier we are talking price hikes for the consumer in the vicinity of $6 a case (when their cases are $600+ that's pretty small increase).


QuicK and DirtY. Read the CoC it's like a guide on how not to be moron.  Also I don't have an issue with the VS series.

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To survive as a small US manufacturer, you must diversify your production resources to cater to as many consumer markets as possible. Mnpctech wouldn't have survive if we relied on sales of our custom PC parts alone. We make niche products for other enthusiast hobbies as well. 


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I looked at caselabs, and found that the Thermaltake Core W100 and W200 was a "Caselabs rip off" yeah a rip off at $300-$400 instead of Caselabs $1,400 price.

It was very Ikea, as in Thermaltake shave some of the costs off by flatpacking it, you need to put it together yourself.

But the finished look is amazing and i bought the WP100 i think it will be my server case for many years to come, great size for all my drives and any need i'll have in the future.

 

Even as an enthusiast building a server i couldn't justify that the case would be worth more than the CPU/Motherboard together costs.

That being said i am lusting for the Spectre for my gaming machine https://www.singularitycases.com/product/spectre/

 


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21 hours ago, mr moose said:

And that 40% figure is anecdotal and mostly in regard to steel, the actual aluminium tariff is only 10%, as calculated on the figures Pas008 gave earlier we are talking price hikes for the consumer in the vicinity of $6 a case (when their cases are $600+ that's pretty small increase).

Yes but what does it cost for exporting to other countries now like i said shipping to other countries became more expensive because of their retaliation tariffs

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13 minutes ago, pas008 said:

Yes but what does it cost for exporting to other countries now like i said shipping to other countries became more expensive because of their retaliation tariffs

I would be more interested to know how many products they actually ship to countries that have retaliated and compare that to when the retaliation actually occurred. 


QuicK and DirtY. Read the CoC it's like a guide on how not to be moron.  Also I don't have an issue with the VS series.

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3 minutes ago, mr moose said:

I would be more interested to know how many products they actually ship to countries that have retaliated and compare that to when the retaliation actually occurred. 

True

I know our exports died down recently and before because of Canadian dollar values but some Canadians come and pick up their orders themselves lol

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2 minutes ago, pas008 said:

True

I know our exports died down recently and before because of Canadian dollar values but some Canadians come and pick up their orders themselves lol

Well, I can't speak for other countries but it has always cost an arm and leg to get anything shipped to Australia from the US (the UK too in many cases).


QuicK and DirtY. Read the CoC it's like a guide on how not to be moron.  Also I don't have an issue with the VS series.

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7 hours ago, mr moose said:

Well, I can't speak for other countries but it has always cost an arm and leg to get anything shipped to Australia from the US (the UK too in many cases).

Pretty sure it costs almost the same price of a case to be shipped here, and it comes in a flat box to save some $ with dimensions.

Now, if you order in bulk. You will have to pay for the pallet too, let alone the insurance. ggwp. 


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Not surprised to hear this. Its hard being a small operation in the US. Especially when you dont have the economies of scale on your side. Im sure there were many factors besides the tariffs that lead to this. Firstly the supplies of the materials used probably went up, do the the tariffs choking the supply. But if you add in shipping costs which have been increasing. Due to the lack of truck drivers in the US. I live in Metro Detroit. You need a job and your a truck driver, some companies are offering $5000 as a sign on bonus. But if you dont have the Truck drivers to deliver goods, it means those costs also go up. Insurance costs are always increasing. 

 

Case labs only choice would have been to increase the costs to the consumer. Ive seen how much their cases cost. Increasing prices would have not helped as they already were some of the most expensive cases out their. They had a product that only few would buy due to cost.  Thats why Im not surprised to here the news. 


You ever notice that many establishments have a sign that as "No Shirt, No Shoes, No service"? They never say anything about pants............ You know what that implies. You dont have to wear pants. 

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On 8/17/2018 at 10:50 AM, Donut417 said:

Not surprised to hear this. Its hard being a small operation in the US. Especially when you dont have the economies of scale on your side. Im sure there were many factors besides the tariffs that lead to this. Firstly the supplies of the materials used probably went up, do the the tariffs choking the supply. But if you add in shipping costs which have been increasing. Due to the lack of truck drivers in the US. I live in Metro Detroit. You need a job and your a truck driver, some companies are offering $5000 as a sign on bonus. But if you dont have the Truck drivers to deliver goods, it means those costs also go up. Insurance costs are always increasing. 

 

Case labs only choice would have been to increase the costs to the consumer. Ive seen how much their cases cost. Increasing prices would have not helped as they already were some of the most expensive cases out their. They had a product that only few would buy due to cost.  Thats why Im not surprised to here the news. 

At that level of cost, another $500 would have been absorbed by the target market easily.

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2 minutes ago, KarathKasun said:

At that level of cost, another $500 would have been absorbed by the target market easily.

The issue is, they dont have the customer base. They have a few people who like the quality of their product and are willing to pay the price. But for what they were selling cases for, most who bought probably are keeping those cases long term, meaning that Case Labs have less people to market their product to. While I liked the features of their case, I would never spend that kind of money on a case. 


You ever notice that many establishments have a sign that as "No Shirt, No Shoes, No service"? They never say anything about pants............ You know what that implies. You dont have to wear pants. 

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Just now, Donut417 said:

The issue is, they dont have the customer base. They have a few people who like the quality of their product and are willing to pay the price. But for what they were selling cases for, most who bought probably are keeping those cases long term, meaning that Case Labs have less people to market their product to. While I liked the features of their case, I would never spend that kind of money on a case. 

Sounds like a terrible business model then.

 

They should have focused on accessories and the like that people can afford.

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It is true that the new trade tariffs are destroying a lot of smaller companies. I will not be surprised if many other small companies will close and be forced into bankruptcy. Moreover, I'm sad because Caselabs will not be able to manufacture and sell any of its PC cases.

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5 minutes ago, Maria Phene said:

It is true that the new trade tariffs are destroying a lot of smaller companies. I will not be surprised if many other small companies will close and be forced into bankruptcy. Moreover, I'm sad because Caselabs will not be able to manufacture and sell any of its PC cases.

I'm not seeing that here in the states TBH.  Caselabs failing was Caselabs fault, not a problem brought about by tariffs.

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