A bit of background - I queried this on twitter and due to the 140 char limit making it a little difficult, was asked to bring it on here as it makes it a lot easier to talk properly:-
When I ordered my Pi, over the phone, I was told that there would be a £5.95 order charge as the order was under £30. Being as I really want one, and was conscious that not only had the first run sold out, but that there were more and more pre-orders coming in, I agreed to it to make sure I got in the queue - this was fortunate as pre-orders stopped, due to demand, a while after this. I was thinking, later, given the Pi is under £30 and we could only order one each, in the initial run, Farnell must have made an awful lot of £5.95s through this, so I mentioned this on twitter. This opened up a whole can of worms as folks who placed the order on the website seem to have not been charged this, whilst others who phoned their orders through have, plus someone I know said that they recall the additional charge was put to them as a phone ordering supplement,so there was even more confusion.
I queried this with Farnell, on twitter, saying I thought it was a bit cheeky and they kindly offered to remove it from the order, but I had a moment of altruism and have pursued it a little further, sort-of on behalf of everyone.
My query to Farnell is how many orders has this been applied to, and shouldn't it, really, be reversed from all these? Before I go into my reasons, I'll give a little background on myself to try to contextualise my knowledge/points - I have worked in manufacturing for about a total of 15 years, 7 of those being in electronics manufacturing, so I have a bit of knowledge about margins, production runs cost of selling vs cost of manufacturing, hidden overheads, etc, plus I can appreciate that in electronics manufacturing some of the margins can be quite tight. Whilst I can understand that as the Raspberry Pi is under £30 and so the T&C specified discretionary low-order charge (checking, it seems I was given the correct reason for the supplement) can legitimately be charged, isn't it a bit cheeky to do so? As I see it, this is designed to try to stop lots of small orders coming that have an admin overhead, especially as Farnell (as I understand it) are more aimed at selling to companies than individual consumers, but the Pi seems to be a bit of an exception - there were a massive amount of orders placed in a very short time, including a large backlog.
Given that, I would guess, Farnell will make some margin on the boards, that will add a nice chunk to their bottom line as it is, but to further hit some of those orders with a £5.95 supplement seems a bit excessive. Now, please don't get me wrong, I don't deny or begrudge Farnell making money on the Pi - they are a commercial business, and even better they are (as far as I can see) UK based so I wish them every success, even more. But if you're hitting a sell-out of 5000 units (assuming the first 10K run was split evenly between Farnell and RS) plus getting many times that in pre-orders, even if you make a small margin on the Pi when you multiply that by the runs (and there will be yet more interest once the backlog is cleared) then that's should be a good earner for you as it is. To then put £5.95 in pure profit (in a way) on top of that seems, as I have said, a bit cheeky.
I know it's only been put on telephone orders, and that does have additional staff overheads, over online orders, surely that should have been allowed for in the agreed margins. Plus there's the additional issue that I (and, I would think, many others) only phoned my order through, and thus seemingly got charged extra, because the website was unresponsive. Now one reply to this would be that it was due to unprecedented demand and the site was overrun so it was beyond Farnell's control, but I work in IT so I know that this should have been, really, previously load-tested and scalable provisions made, to some degree or other, to allow for the extra traffic - Raspberry_Pi has 48,000 followers on twitter, alone, so large demand should have been expected. I was trying, regularly, between 6am and just after noon, to get on the site (after which I called my order through) and I managed to get the home page up twice, and the product page up once (the order link timed out after that) in all that time, so no-one can say I didn't try to order it online, hehe, so is it really my fault that I had to phone it through?
CAVEAT - BEFORE ANYONE THROWS A WOBBLER AT THIS NEXT PART - these next figures are what I have come up with based on rumour and conjecture, BUT, I don't think they're too unrealistic:-
I ran some very rough, but not unlikely seeming figures. I had a very much unconfirmed reports of 100K sales on the first day, so split that evenly, say, between RS and Farnell then that's 50K each, now say that just 20% of those orders were phones through then assuming this charge was applied to them all then that's still 10,000 lots of £5.95 - nearly £60,000 in "free" profit. Say my figures are overestimated, and it's half that, then that's still £30K, but looking at the production runs that have sold out in advance and taking a run-size of 10K boards from the initial run, it seems to me to be in the right ball-park. There were other costs, obviously, to Farnell by them not having their website available all morning and having to get "all hands on deck" to man the phones, but I doubt that the base margin on the Pi boards in pre-orders, plus the demand moving forward wouldn't cover this.
It was mentioned that I seemed quite passionate about this, and I do - both on the principle and context of the charge, but also, and mostly, as the Raspberry Pi foundation is not only a charitable organisation, but also that (as I understand it) one of the underlying ethoses of the Raspberry Pi is to make programming accessible to kids, especially underpriviledged ones that might not, usually, have access to a computer at home to be able to do this. Seeing I have bveen programming since about age 9 (so, for nearly 30 years, now) this is something close to my heart. And these are many other, equally worthy, uses for the Pi coming out, all the time.
. There were other losses, obviously, to Farnell by them not having their website available all morning and having to get "all hands on deck" to man the phones, but I doubt that the base margin on the Pi boards in pre-orders, plus the demand moving forward wouldn't cover this.
It was mentioned that I seemed quite passionate about this, and I do - both on the principle and context of the charge, but also, and mostly, as the Raspberry Pi foundation is not only a charitable organisation, but also that (as I understand it) one of the underlying ethoses of the Raspberry Pi is to make programming accessible to kids, especially underpriviledged ones that might not, usually, have access to a computer at home to be able to do this. Seeing I have bveen programming since about age 9 (so, for nearly 30 years, now) this is something close to my heart. And these are many other, equally worthy, uses for the Pi coming out, all the time.
So, taking all this into account, is this £5.95 reasonable, in this particular case?
Of course, if Farnell aren't making any margin on the Pis then I would gladly give them my £5.95 as a heart-felt thank you for doing so, and supporting this great little device and cause.
Another option that I, personally, would be equally happy with (if it's a bit of an adminstrative nightmare to reverse all the individual charges) would be to give the supplement part of the orders to the Raspberry Pi foundation charity. I will be donating one, once I am able (as far as I know we didn't have this option in this initial sale) so an extra fiver on top of that would be fine. However, I would understand if the semantics of doing this - if every customer would need to be consulted - are too much, then this may not be an option. But on the flip-side, we all agreed to this extra charge, so in theory there may be nothing to stop this happening, and it could be such a good boost to the foundation.
People from Farnell: all this is as I have managed to work things out for myself, so if I am, in any way, incorrect in anything I've said, please correct me. And I appreciate that you won't be able to reveal what margin, if any, you make on the boards, nor would I ask you to provide specifics. However, some initial order quantities would be very interesting, if you are able to and don't mind providing them (even rough ones).
Thanks - I look forward to a response from the Farnell people, and sorry if I've written War And Peace here!
aSheepie
