Reposting this to try to keep the discussion alive, since it kind of got
buried in the other thread:

-----Original Message-----

"gpickren" wrote

1) Our economical price is the result of the elimination of multiple
layers of mark-up of the parts and the assembled drives. Sterndrive
Engineering is bringing the parts directly from the manufacturers to the
dealers -- there are no manufacturer representatives, warehouses, trading
companies, private labelers, distributors, or other middlemen. We have made
a tremendous investment in engineering, tooling, and fixturing such as to
have total control of our manufacturing. We have also made volume purchases
in order to obtain the necessary economies of scale. A significant
investment has been made in starting this company.

2) We intend to sign up 4,000 to 5,000 dealers worldwide in the next 3
years. The process has already started and is going quite well. Interested
dealers should call 727 461 0811.

3) The halves (upper and lower) are shipped individually. They are also
pressure tested individually after assembly. During our extensive testing,
we have never had a problem with the assembled halves failing a leak down
test. The fit between the halves is quite good.

4) The cases are treated with a zinc phosphate coating during the finishing
process. We have had an OE case and one of our cases emerged in salt water
(the Intercoastal Waterway in Clearwater, Fl) now for about six months. We
cannot tell any difference in the rates of corrosion. Our cases are made of
356 aluminum alloy which has very good anti-corrosion properties.

Greg Pickren
President and Owner,
Sterndrive Engineering
www.Sterndrive.cc

From SEI's Forum (http://sterndrive.cc/phpbb/viewtopic.php?t=17)

"Blizzard" wrote
There seems to be a lot of skepticism about SEI in rec.boats and other
discussion groups. I've read SEI's statements about eliminating middlemen,
volume purchasing and so forth, but the the prevailing concern still seems
to be "if SEI drives are so inexpensive compared to OEM, there must be
something wrong with them." So, is there a catch? Are they cheap Chinese
knock-offs or something? Are corners being cut somewhere in the manufacture?
(Please don't take offense, there's none intended: it's just that I think
these are the kinds of questions going through many skeptical minds right
now.)


"Tecnical Support" wrote
The drives are not "cheap Chinese knock-offs" and corners are not being cut
in manufacturing. However, our drives are very economical which naturally
raises the question, "How do you do it?" I am comfortable answering the
question in a general since, but I cannot go into specifics. Certainly you
can appreciate that such information is proprietary and not something that
we want to share with our competition.

Basically, our economics come from eliminating middlemen, creating economies
of scale, and keeping overheads low. Take a typical aftermarket prop shaft
for example. It's made overseas and then marketed by a West Coast trading
company to Sierra who pays a commission to a manufacturing representative to
sell the shaft to a distributor (such as Land and Sea) who sells the shaft
to a boat dealer who uses the shaft and his labor to repair a customer's
drive. The shaft is either directly or indirectly handled by five entities.
Sterndrive Engineering has streamlined this process dramatically.

As for ecomomies of scale, you cannot go to an aluminum casting company, for
example, and ask them to make you 10 cases. Sterndrive Engineering has made
the investment in product design and tooling for the purchasing of 1000's of
cases each year. Very few aftermarket company's have the resources to make
these kinds of investments. Consequently, their costs are higher.

Sterndrive Engineering has priced its drives to sell 1000's each year, not
10's or 100's. Our economics only work if we achieve our sales targets.
Other companies are pricing their products so that they can be profitable
with much less sales. Our goal is to be the largest supplier of replacement
drives in the world by next year and we have priced our product to achieve
this goal.

As for why are they less than OE, the answer lies in how almost all OE's
price their replacement parts. If you were to try and buy a Chevy truck one
part at a time, I've read estimates that it would cost over $100,000. Part
sales are usually the most profitable aspect of the OE business and are
critical to maintaining the bottom line.

I hope this helps and thanks for your interest in Sterndrive Engineering.