Replies to post #14159 on Redwood Scientific Technologies Inc (RSCI)

[dcsteve]

The royalties are the biggest news yet for GDGI. Do you still see a tout being employed near term?

[gnosis]

shipping costs would be trivial compared to tariffs i would think
if so that is kind of sloppy communication to mention shipping costs and not tarrifs

tariffs can run up to 30%
these units cost $20k retail or something
it would not cost 1k to ship the
but you might pay a $6k tariff

and while there are exemptions for environmental tech sometimes, it takes a while to get them
so while saving on shipping is probably nice, saving on tariffs is even more helpful

both combined probably dont offset the cost of cutting in a partner
if they weren't in a hurry to close a sale, they could start their own mftring concern in a country with good pan asian export tariff treaties

but since they dont close sales fast, i think the short run interest of having someone culturally prepared to do business in asia trumps the long run interest in making more money instead of less money

[gnosis]

"Also, there is greater incentive for the nearby manufacture to PUSH the product, since they will be reaping much of the reward"

excellent point that photon ltd, a company so dominant that you cant' even find it on the web will have an extra incentive to push the product.

just think, if they could negotiate to give away 100% of the profits, there would be huge incentives for people to push the product!

still, their decision to make an agreement to manufacture it suggest they think they or someone they know can sell it, and having someone who understands the asian market right now, even a the cost of trading all the profits for a share in the form of royalties is not bad.

if we already had another deal though, i would be against this. GDGI would be better off with their own factory in asia if they could afford to wait til they had money to build it. a it is, i agree that it is a positive, but its not as if royalties are some bonus card in monopoly - its that smaller amount that you get when you forgo full profits to let someone else run your show.