Note: Sorry about the delay. This update was posted in our Discord about a week ago, but I forgot to put it here.----------
Update 28 — Batch 2 and Winter DesignHello everyone, sorry it’s been a while.
Due to the massive increase in aluminum price, manufacturing costs, and international shipping costs, we’ve come to the uncomfortable realization that we are going to be losing money on Batch 2. This is unavoidable no matter what option(s) we choose. We have made the decision to deliver B2, despite losing money, because we feel that it’s the right thing to do for our backers and customers.
I wanted to bring this discussion to our community, because transparency is important. Here are the options we considered:
1. Using our original supply chain, and the B1 manufacturers — For B2 they quoted us $30k higher than Batch 1. For those of you doing the math, we’d be losing ~ 26k on this batch as a result.
2. A set of new manufacturers for B2 - They quoted us about 44k for the production run, bringing our losses down to about $18k for Batch 2, after shipping.
3. Cancelling Batch 2 and refunding — This option would put us in the red for about $28k, since we’ve already ordered / produced some parts and secured packaging and paid for shipping of those parts / materials for B2. Most of that cannot be returned, so we’d have to refund B2, and we’d have a bunch of unused parts sitting around that would have to go to recycling.
Thus We’re left with a list of bad options, and not much room to maneuver. Unfortunately, most of this is due to circumstances we couldn’t have planned for. What would have been a simple Kickstarter + Web order 2-batch production run turned into a logistical nightmare as the global manufacturing systems attempt to recover from COVID-19.
Of those choices, Option 2 appears to be the most appealing, and minimizes our losses, while still delivering Winter One to you. There are some risks, but no more than with Batch 1, when our selected manufacturers were new to the process. There might be slight delays on our timeline, but we’re still trying to get B2 out by the end of the year.
As I’ve said before, B2 will be the last batch. It doesn’t make sense to build this product at today’s aluminum prices, and current manufacturing costs. I know a lot of people had reservations about the cost, but there was genuinely not a ton of margin in this product.
Had it been designed today, there are a lot of decisions we would have made differently, going for the safety of higher margins, and lower manufacturing costs, different materials, and different finishes. It would have been a compromise on our vision for Winter One, and would have lacked the sheer excess that First Edition W1 had, but would have been a profitable product.