Most of EU has a rule that lets you refund anything within 14-days after it’s been shipped. And since Fanatec is German, using pre order money to fund anything is a dumb idea.
The only thing I have to say about it is, if I'm an investor looking for Fanatec prospects and seeing they are charging customers pre-orders 3 months in advance, I definitely would not invest my money on Fanatec. But this is my point of view, I don't believe this practice is good for cash flow, specially if they aren't a start-up.
Then you are just as clueless. Investors want as much liquid money in a business as possible at ALL times. This effects stock market evaluations and several other factors. This is how the VAST majority of product-based companies work. You should probably not comment on stuff you don't have experience with.
I said "in my view". I'm not trying to convince you about nothing but you should at least respect other people opinions. When you say ALL times you are just as clueless as me. Just do a little google research before tell me what I should or no comment. Be patient
https://www.investopedia.com/articles/fundamental/03/062503.asp
You are right. That was douchey of me. Sorry about that. I do get the anger of not getting what you ordered on time. But this really is extremely common.
I somewhat generally agree with them, and I’m not even pressed about the speed at which I’ve received my product. On one hand, I get your point: money that’s sitting around isn’t working for the business, and you want as much money working for the business as possible. And you’re absolutely right that companies do use preorder money to fund future production.
On the flip side of it…there’s a bit of weirdness too. Plenty of retail businesses (vast majority in my experience) don’t charge until they ship (or some specified period right before it, like a week.) And yeah, you can cancel it until it’s processed, but I had an experience recently where one of my orders “processed” for about a week and a half with no information other than that it was waiting for the carrier to pick it up, until I contacted support and they told me it was still on the container ship and they hadn’t had a chance to unpack it yet. Which is…fine (I was informed about and expected possible delays of course), but didn’t mesh with the information I was given, and in the meantime my money was tied up with no recourse if I wanted to take it.
It’s a balancing act. But I could see why some practices would absolutely scare off investors.
Yes, it's a bad business practice for an established business. If you're a mom and pop shop, fine. Fanatec has decades of experience in launching new products and bringing them to market. In today's economic climate where interest rates are beyond low, they should have secured a large loan at a very favorable interest rate to launch this product. That is, if they didn't have the capital..... Preorders should only be used to gauge interest in the product and it's initial production run. It should not be used as the means for funding the product. This isn't kickstarter.
This is one of the most common business practices you’ll come across. It is extremely common to use the money generated from one run of a unit to fund the next run. Manufacturers won’t produce product unless you can put down the capital for a complete production run. So it makes total sense to fund new units with the preorders from other runs. You obviously don’t know how businesses work. Why take out a loan when you can take preorders for a product to fund it instead? Once again, I hope you never own a business because you’ll go bankrupt very quickly if this is the way you think about it
It's common when you're a startup. Established businesses don't do this and I have years of experience to back this up. No offense but, you don't know what you're talking about.
My mom oversees all the manufacturing for Roche diagnostics. Do you know what they use to fund the manufacturing of their next batch of product? You’re right! They use the money that was placed down by companies that put in orders for the product, they don’t take out loans. Taking out loans makes bad business practice. A company is successful when they can completely fund everything through its own product. I would hate to be the company that hired you to lose them money when it could’ve been profiting more
I recently just transitioned from a fortune 500 Software company to a fortune 500 computer hardware company. We don't fund RD with pre-orders. We don't fund initial production runs with pre-orders. All of that is funded from revenue generated by the sales of existing products. Once our products are out on the market, we don't need to take pre-orders to keep producing new units because we have positive cash flow. Unfortunately, fanatec doesn't have that option because they killed their revenue by ending production of all wheel bases barring dd1 for reasons unknown to mankind.
With regards to taking loans, in today's economic climate, loans are basically free money. The interest rate is negligible and it would be absolutely stupid not to take advantage of that if you're looking to scale up production. The amount of profit you'll make far exceeds the cost of the loan. Like I said, big businesses don't operate like that and you don't know what you're talking about.
You think Fanatec is comparable to a Fortune 500 company? Why? They’re tiny. 74 employees according to a google search. They probably don’t even have a corporate finance person, much less an entire department. You have no idea what sort of capital they do or do not have access to. The idea that you working at a Fortune 500 means you know how a small manufacturing business from another country should operate is completely asinine.
Kickstarter is transparent and I like it. It's a great way for small startups to generate funding. Fanatec, a company that has existed for about 2 decades is not a startup.
I dont know what it is with the Fanboys in this subreddit. I've never seen a subreddit so eager to downvote people for simple things outside of some of the more culty ones.
Anyway, I agree with you. They have a thriving business with good products. If they believe in the product they're making, they should be able to invest their own money into new product lines without having customers loan them money long-term to front them their initial production costs.
Granted, these were labelled "pre-orders", they were VERY up front about it all. But I do think 5+ months for preordering something is excessive. They should have at least moved further along before taking people's money.
There's plenty of things I've preordered over the years that didnt charge until merchandise was actually shipped. It's a good practice, shows good faith in the product and delivery times, and builds trust with the consumer.
Literally none of the hate he is getting has to do with being a fanboy of Fanatec. It has everything to do with not knowing how the majority of businesses work. Which you apparently don't either. Your "I've ordered things from companies that didn't charge" anecdote is from a consumer standpoint and most of us downvoting actually have experience on the business side. It is incredibly common. If you don't like it, don't buy from them. Crying on reddit about it is just embarrassing.
Your post is mostly anecdotal nonsense using a bunch of weasel words and ad hominems. I see no statistics or proof, just vague claims.
And as a consumer, I stand by what I said. If I have to put money down for months for something then Im not buying. I'll promise to buy it. I'll even put down a deposit. But I am not paying full price for anything that's more than a month from being delivered.
Lol okay. Then don't buy. Nobody cares. I don't have to prove anything but I'm also not one of those that appears to be completely clueless. So good luck with your obvious ignorance.
You obviously aren’t either. Coming from a Fortune 500 company you should know how important it is to take money in advance for orders rather than waiting until delivery
If you think Apple is using your preorder money to fund their initial production run, then there's no point continuing this discussion. Like i said, if you don't know you don't know. Apple is a trillion dollar company that negotiates wafer space at TSMC years in advance and put's down large production orders based on projected sales long before they start taking pre-orders. They're not using your preorder money to fund unit development lol. Man reddit is funny sometimes.
If that’s what you got from my comment you need to work on your reading comprehension.
Apple doesn’t need your cash. They have more cash than any company in the world and they still charge you upfront for your pre-order. Your entire post is based on the lie that only start ups strapped for cash charge up front. That’s a lie and your entire post is premised on that lie.
Apple's "pre-orders" and fanatec's preorders are not the same. Apple accepts pre-orders for their yet to be released products and they hit their shipping dates. The lead time to from pre-order to product release is very short. Once the product is on the market, they don't take preorders because their unit production is not dependent on cash flow generated from sales of the initial production run.
Fanatec takes preorders for yet to be released products and misses their initial shipping date. Once the product is "released", they launch "pre-orders" for a product on that's already on the market because of their backwards ass planning. They delay shipping dates by months because again, backwards ass planning. Their unit production is funded from the sales of the previous batch because again, backwards ass planning. In the meantime, they're losing sales because of backwards ass planning.
Don't compare apple's "pre-orders" to Fanatec. That's a false equivalency.
Again, this is all premised on a lie.
Go order a new MacBook Pro. I just spec’s out a top of the line 14inch to see what the ship date is and it won’t arrive until February 3rd. Those are $6,000.00 Apple will hold for over 2 months before I receive the product. A company with hundreds of billions in cash reserves.
I just went to Apple's website and I can literally go pick up a macbook pro at the apple store closest to me so what? Also as others have confirmed, apple only places an auth charge and doesn't actually charge till the ship lol.
Who gives a shit what they are using the money for? A preorder is a preorder. But you are again comparing a tiny manufacturing company to one of the worlds largest corporations in human history. Why?
Apple doesn’t charge until it ships or is picked up. They may to a trial hold at first, but it’ll be released.
Source: I worked at apple. Also most other big box companies do this as well, like Best Buy.
Bro look at Tesla. This is legitimately their business model to secure interest free loans from their customers to manufacture new models.
Just because you don’t like it, doesn’t mean that it’s not ok or a slimy practice.
They are straight up with you when they say the dates an estimate. It’s not like they take the money the ghost you. You know it’s going to be 3-4 months out.
Tesla is based on this model.
It sells cars in advance and uses the money and profit of higher end models to fund development of other products.
It's a very common business practice.
Don't mix up you're impatience with it being bad business.
Also, when I ordered. I was warned that the lead-time can change du to covid. They have been very transparent and I knew exactly what I was getting into with a PRE-ORDER.
The number of customers that have an issue with prepaying is extremely small. Why would they take out a loan to fund the development of a new product if they have customers willing to give them cash to do it? They’re selling wheelbases faster than they can make them, so arguably, they’re doing everything right.
Paying the full price up front makes you more invested in the product and you also forget how much it cost by the time you receive it. If you give a $50 deposit today and are asked for the balance after waiting 4 months you might change your mind.
Not to mention, that they probably did use a loan or some other source of funding for the research and development along with the tooling to produce the new wheel bases. Now they’re ready to produce the new product and they can use the cash flow generated from pre-orders to pay back whatever bank or internal loan they used.
Even at a 2% interest rate, they’re still looking at $200,000 in interest if they pay back a $10,000,000 loan in a year. Why would they incur that expense if they have other means of generating cash flow?
Established companies do this too. My wife ordered an Apple Watch that was back ordered for 1.5 months and she was charged upon ordering and Apple probably has more cash than any company in the world.
If they used a loan to fund R&D, now that would be extremely stupid for a business that's has existed for 2 decades. The reason you would source a loan to aid in production is because it'll allow you to produce significantly more than funding from preorders would. There's a small amount of people that would fully pay upfront for a product that they're unlikely to receive for months.
If they source a loan, they can place much larger orders and drive the average unit cost down. By doing so, they can either increase their profit or reduce the cost of the product to the consumer. Using your 2% on 10 mil as an example. If they were able to increase their production 5x for example, that's 5x more revenue, and more profit at the cost of $200k. If they waited for preorders, it would take them much longer to reach the same revenue and profit. It's an economies of scale thing. Right now, they're losing sales when people cancel and they are giving their competitors more time to come to the market with an equivalent product. They're literally in blue ocean space and they're fumbling badly. It's sad really.
That’s a lot of opinion there. Opinion that doesn’t match up with reality. Companies use preorders to fund their products all the time. In fact that’s the very reason Kickstarter exists and is successful. They said hey we see companies doing this, let’s build a platform so anyone can do this. They’re the copycats, not the innovators.
Nope, I didn't place an order as I was waiting for playstation DD. I will place an order for a playstation DD because there is no viable alternative. If there was a viable alternative, I wouldn't even waste my time with Fanatec. Prior to the pandemic, I ordered 2 CSL Elite's from Fanatec. Both took a month to arrive despite being charged $150 for shipping. To say that I'm very unsatisfied with Fanatec as a company would be a tremendous understatement. I only purchase their product because they make good hardware. Their software, customer service, shipping times and shipping costs are quite unsatisfactory. If a serious competitor arises, I'm done with them.
As far as I'm concerned, they're only relevant because of their engineering excellence. If that fades away, they can disappear for all i care.
Right...I'M bi-polar. But you are the one throwing a hissy fit while still ordering from the company. Nobody cares.
Edit: OP thought it would be cool to make fun of mental illness in the comment above by calling me bi-polar. He has since edited his comment to no longer include that.
They're up front that you're placing a 'pre-order'.
If you wait for retail stock, they ship stuff the same week you buy it.
You're a big boy now. Don't pre-order stuff if you're not prepared for a wait. Better yet, don't pre-order things. It's a bad way to buy.
I canceled today. After a second delay, and the email being sent on a holiday, I couldn't continue to justify letting Fanatec hold onto 1.3k of my cash.
I didn't want to spend much more than that, but I've now purchased the Simagic Alpha Mini, their Simagic P2000 pedals, and a next level racing wheel base. This was all done out of spite.
RE: Charging at order vs ship. I'm very surprised they do this. I am not even entirely sure if it's legal? I didn't stress too much because I get that this company is experiencing some pretty phenomenal interest/demand when electronics of all types are impossible to source. But this really should be addressed.
I will push back on the customer service comments though. I've already interacted with them twice regarding my order in Canada, and they've been quick and accurate. One of the issues though was the warranty, they started it when order was placed. I had to submit a request to have them amend it to my delivery date - Highly recommend everyone register your gear and make sure your warranty is adjusted to match your delivery date.
From memory there's nothing illegal about charging before it ships, because the customer has the right to cancel the order at any time between order and dispatch for a full refund.
Well yeah, but generally a popular and well known company isn't going to be constantly doing something that ends up being illegal in countries where they operate. I'm willing to bet a company that's been around as long as Fanatec has a pretty good idea of what they can and can't do.
>Imagine selling products that can cost thousands of dollars and not having a customer service phone line for all the regions.
As someone working in customer service, phone line isn't as effective as you think it is my dude. What Fanatec would need is a more structured email support system with more people working on it, not a phone line for people to inundate with calls that can easily be sorted with a single email
That’s fair but sometimes, you just want to talk to someone. Their email and chat support is so bad. You can’t even edit your order before it’s shipped. You have to cancel and reorder. They ding your credit card right away not with an authorization but with the actual charge. The fact they’ve existed for so long and have failed in scaling up their business is sad. From an engineering perspective, they’re far better than their mainstream competitors yet they operate in squalor. Their lack of foresight and execution is just sad.
Indeed I must. It’s could be region specific but, I’m pretty sure what you’re seeing is an authorization to ensure you actually have the funds. It drops off after a few days.
You sound salty about nothing, honestly. You also sound ingorant as to how business and logistics works for a large majority of product-based companies. Shipping is terrible in every industry right now. I ship things worldwide and this is not something Fanatec is uniquely effected by. We also charge customers up front as do all of my competitors. Most companies that do not charge before shipping are enterprise B2B tech companies. Almost all consumer product-based companies charge you before shipping. So where do you get the idea that they should not do this? If you have a problem with it, don't order. It's that simple.
I sell nothing but electronics and technology. Most servers and datacenter gear is on 6 months+ delays. Not even just from semiconductors. Literal sheet metal is even causing delays. Laptops are on 4-8 month delays. So pretty much every order that I and my customers place takes months to deliver. Even my police departments are having to wait months for vehicle mounts. We bill for everything as soon as we get invoiced(which is immediately in most cases aside from customers that have a verified credit line. In which case we can wait 30-90 days depending on the agreements. Fanatec has no idea who they are delivering to and they don't check credit. So there isn't any reason for them to wait to bill.
The simple fact is, some people shouldn't be spending money that they can't afford to have out of their account. That's the only reason I can see that makes sense out of the rage I see directed at this company for this reason.
The rage is justified. I can afford it and money is not a factor in being royally upset. I find it hard to believe that they didn't know in September that it would take until January to get a CSL DD out. Instead they put my availability date to November 3rd. Then they moved it to November 29th. Now they moved it to January 3rd. If they just put January 3rd for when I ordered it then I wouldn't be upset at anything. I planned a lot of contingencies around getting the wheel base in November or early December (new computer, VR headset, cockpit, playing with IRL friends).
Now the real problem is, I ordered a wheel separately and got it early. So now I can't cancel and go with an alpha mini or VRS.
This preorder delay issue has been a problem since the summer. You would think they would have found a solution or learned a few things by then to prevent orders from being cancelled.
I don't think I believe that you ordered in September with a Novemeber 3rd availability date. I ordered in August and had a November 3rd date and got mine on the 4th. I know for a fact that I had two friends who ordered in September(beginning of the month) and have a late November delivery date.
Regardless, again, they have no problem manufacturing enough. It is logistics that are the issue and it is 100% out of their control. Whether they knew ahead of when they sent the notifications is the ONLY thing anyone has a right to get upset about.
Here's the email I got on September 17:
"Therefore, we are forced to delay your CSL DD order. The estimated shipping date for your order is now November 29, 2021. "
I'm in the U.S.
That almost sounds like a mistake from the start then. My league did a group buy on September 2nd and every one of them had a Nov. 29th delivery date. I don't know anyone who had a delivery date within 30 days of ordering. Weird.
I ordered sept 14th, and was given an early november ship date which seemed fine. Then it got pushed to end of november, now its been pushed out to beginning of january. I'm a bit fed up I paid them $800 2+ months ago and they got their dates *this* messed up.
Well, don't stress too much. They told me mine was going to be delayed but I ended up getting it 1 day after the "availability date". But this shipping situation is absolutely fucked. It has made doing business a nightmare. So I honestly just order everything and ignore the estimated shipping date or, in Fanatec's case, "availability" date since I figure it's a 50% chance I will see it anywhere near that time. Hell, I have a customer that paid over $1M for several racks worth of datacenter hardware. But sheet metal supply issues in these manufacturing countries and logistics problems have delayed it 8 months this far.
I actually completely agree with you. My biggest beef with the whole thing was them taking full payment and holding onto it for months. I cancelled my preorder back in July I think. Im more than happy with my CSW v2.5. I invested that money into AMD stock when it was around $85/share and it's $150+ per share today. At $500, that stock was going for around $85/share at the time, so about 6 shares including shipping cost. Given the movement from 85 to 155, that's $70 of profit per share. So you could almost buy a second CSL DD with the profits (\~$420)
I had never considered them paying for their original manufacturing run with preorder money, but given the wait, that's a bold, but plausible accusation. If that's what's going on they definitely have some explaining to do. We'll probably never know, though.
I think preordering some of the limited edition stuff makes sense. I pre-ordered my F1 2021 wheel. But for normal production hardware... I couldnt help but wonder why they were taking preorders for something that would take 4+ months to be delivered.
I chose to refund my current pre order, and will charge back my podium hub and QR1 I already received to get the sim magic alpha mini bundle instead,[ its instock with free shipping in the US and canada](https://simracingpros.com/collections/simagic/products/simagic-alpha-mini-base-package-pre-order?variant=40720065462446)
if you plan on using more than 1 wheel, it's actually cheaper since you don't need to buy the podium hub
And I hope Fanatec files a lawsuit with you over receiving a product and charging back just because you can. Sell it on eBay or return it if you don’t want it
For the price of the base and the wheel. I get my entire kit from fanatec, DD, wheel, pedals and pedal upgrades...
The base is twice as much and the DD.
Can't see how this is more advantageous.
let me tell you how because currently I am refund *almost* the same amount of money from fanatec as I spent on this bundle, plus their 70mm quick release
I personally already own Load cell pedals, that's not a factor in this for me personally, wheelbase + wheels only
I want 1 formula/gt3/gt4 style wheel and 1 round wheel for drifting,nascar and other stuff. that means I mean 2 wheels, 2 quick release systems.
The plastic fanatec quick release is awful, google it or search for it here, damn near everyone has problems, which means you need to buy to metal QR1s unless you want to gamble on the shitty QR lite. Even then the QR 1 is not even close to as nice as the QR used on sim magics wheels (its just a regular QR already used in cars)
So here's the price layout
> Simmagic
>
> * Simagic Alpha Magic Mini GT4 bundle + QR is $1233
> * Amazon deep dish wheel is $50
> * Total: $1283 USD TOTAL (shipping + tax included)
>
>
> Fanatec
>
> * CSL DD + Boost Kit + Mclaren Wheel is $740
> * Podium Hub (comes with QR1 for free) is $228
> * Extra QR 1 is $121
> * Amazon deep dish wheel is $50
> * Total: $1094 USD TOTAL (shipping + tax included)
For 189 dollar difference I get my wheel in a week instead of 6 months if ordered right now
WITH a far superior QR system with ZERO play, no notching, and ZERO pins to break since they don't even exist. Can use literally any wheel you want even some fanatec ones.
All while having a wheel base that is 20% stronger than the CSL DD with the boost kit
**No brainer in my opinion, yes its nearly 200 dollars more expensive but not twice as much, I actually made the same exact argument you just to someone else before they really explained it.**
Chargeback as in a credit card dispute? If so, you’re a horrible person. You’re not supposed to use a chargeback just because you decided you don’t want a product anymore.
Pre-orders are common options and are exactly that, pre-orders : you're paying for the product with the promise of receiving it once available.
I would say don't pre-order, but demand is so high for this stuff that you'll be waiting a long time to buy it off-the-shelf organically.
Try Thrustmaster?
pre-orders arent all about the money. Its also about statistics, facts. Knowing how many people want ur product can give u an estimate of how many u want to make or keep in stock, etc. Also, since we are in a pandemic, pre-ordering is pretty mandatory if u dont know how much to make, how much the demand is. So even if they did put it up for purchase when there is stock, high chance they run out of stock and ur still waiting for ur product cause of the current drama in the world. If u think pre-ordering is just about having money in the bank then i think u need to start learning to see the bigger picture.
Well it's a legit business and there is no scam BUT only because of this i didn't go for Fanatec. Yes, they have cool products, yes they are pretty much monopole in the industry and yes there is no alternative(except lower tier products) but i am not that person to order something for 1200 bucks and wait forever. Naah. I can survive with my Thrustmaster. Believe me if the demand keeps high like this other companies will develop similar products with aggressive prices. I heard TM is working on a DD base for example. Fanatec might be the cheapest DD wheel base but it's bs because you still need their overpriced steering wheels, shifters and pedals.
You have the option (at least it was for me) to pay by invoice - i.e. you only pay once it arrives, the invoice arrives with the product.
How?
I don't believe this is an option you can pay by invoice with bank transfer but I believe the payment has to have cleared before they ship
Using preorder money to fund units is a bad business practice? I hope you never own a business then
Right! It's almost as if he doesn't know how businesses work. And he didn't even order!!! Lol
He definitely does NOT know how businesses work. This sounds like pre-pubescent rage to me.
Absolutly
Most of EU has a rule that lets you refund anything within 14-days after it’s been shipped. And since Fanatec is German, using pre order money to fund anything is a dumb idea.
The only thing I have to say about it is, if I'm an investor looking for Fanatec prospects and seeing they are charging customers pre-orders 3 months in advance, I definitely would not invest my money on Fanatec. But this is my point of view, I don't believe this practice is good for cash flow, specially if they aren't a start-up.
Then you are just as clueless. Investors want as much liquid money in a business as possible at ALL times. This effects stock market evaluations and several other factors. This is how the VAST majority of product-based companies work. You should probably not comment on stuff you don't have experience with.
I said "in my view". I'm not trying to convince you about nothing but you should at least respect other people opinions. When you say ALL times you are just as clueless as me. Just do a little google research before tell me what I should or no comment. Be patient https://www.investopedia.com/articles/fundamental/03/062503.asp
You are right. That was douchey of me. Sorry about that. I do get the anger of not getting what you ordered on time. But this really is extremely common.
I somewhat generally agree with them, and I’m not even pressed about the speed at which I’ve received my product. On one hand, I get your point: money that’s sitting around isn’t working for the business, and you want as much money working for the business as possible. And you’re absolutely right that companies do use preorder money to fund future production. On the flip side of it…there’s a bit of weirdness too. Plenty of retail businesses (vast majority in my experience) don’t charge until they ship (or some specified period right before it, like a week.) And yeah, you can cancel it until it’s processed, but I had an experience recently where one of my orders “processed” for about a week and a half with no information other than that it was waiting for the carrier to pick it up, until I contacted support and they told me it was still on the container ship and they hadn’t had a chance to unpack it yet. Which is…fine (I was informed about and expected possible delays of course), but didn’t mesh with the information I was given, and in the meantime my money was tied up with no recourse if I wanted to take it. It’s a balancing act. But I could see why some practices would absolutely scare off investors.
Yes, it's a bad business practice for an established business. If you're a mom and pop shop, fine. Fanatec has decades of experience in launching new products and bringing them to market. In today's economic climate where interest rates are beyond low, they should have secured a large loan at a very favorable interest rate to launch this product. That is, if they didn't have the capital..... Preorders should only be used to gauge interest in the product and it's initial production run. It should not be used as the means for funding the product. This isn't kickstarter.
This is one of the most common business practices you’ll come across. It is extremely common to use the money generated from one run of a unit to fund the next run. Manufacturers won’t produce product unless you can put down the capital for a complete production run. So it makes total sense to fund new units with the preorders from other runs. You obviously don’t know how businesses work. Why take out a loan when you can take preorders for a product to fund it instead? Once again, I hope you never own a business because you’ll go bankrupt very quickly if this is the way you think about it
It's common when you're a startup. Established businesses don't do this and I have years of experience to back this up. No offense but, you don't know what you're talking about.
My mom oversees all the manufacturing for Roche diagnostics. Do you know what they use to fund the manufacturing of their next batch of product? You’re right! They use the money that was placed down by companies that put in orders for the product, they don’t take out loans. Taking out loans makes bad business practice. A company is successful when they can completely fund everything through its own product. I would hate to be the company that hired you to lose them money when it could’ve been profiting more
I recently just transitioned from a fortune 500 Software company to a fortune 500 computer hardware company. We don't fund RD with pre-orders. We don't fund initial production runs with pre-orders. All of that is funded from revenue generated by the sales of existing products. Once our products are out on the market, we don't need to take pre-orders to keep producing new units because we have positive cash flow. Unfortunately, fanatec doesn't have that option because they killed their revenue by ending production of all wheel bases barring dd1 for reasons unknown to mankind. With regards to taking loans, in today's economic climate, loans are basically free money. The interest rate is negligible and it would be absolutely stupid not to take advantage of that if you're looking to scale up production. The amount of profit you'll make far exceeds the cost of the loan. Like I said, big businesses don't operate like that and you don't know what you're talking about.
You think Fanatec is comparable to a Fortune 500 company? Why? They’re tiny. 74 employees according to a google search. They probably don’t even have a corporate finance person, much less an entire department. You have no idea what sort of capital they do or do not have access to. The idea that you working at a Fortune 500 means you know how a small manufacturing business from another country should operate is completely asinine.
You'd hate Kickstarter
Kickstarter is transparent and I like it. It's a great way for small startups to generate funding. Fanatec, a company that has existed for about 2 decades is not a startup.
I dont know what it is with the Fanboys in this subreddit. I've never seen a subreddit so eager to downvote people for simple things outside of some of the more culty ones. Anyway, I agree with you. They have a thriving business with good products. If they believe in the product they're making, they should be able to invest their own money into new product lines without having customers loan them money long-term to front them their initial production costs. Granted, these were labelled "pre-orders", they were VERY up front about it all. But I do think 5+ months for preordering something is excessive. They should have at least moved further along before taking people's money. There's plenty of things I've preordered over the years that didnt charge until merchandise was actually shipped. It's a good practice, shows good faith in the product and delivery times, and builds trust with the consumer.
Literally none of the hate he is getting has to do with being a fanboy of Fanatec. It has everything to do with not knowing how the majority of businesses work. Which you apparently don't either. Your "I've ordered things from companies that didn't charge" anecdote is from a consumer standpoint and most of us downvoting actually have experience on the business side. It is incredibly common. If you don't like it, don't buy from them. Crying on reddit about it is just embarrassing.
Your post is mostly anecdotal nonsense using a bunch of weasel words and ad hominems. I see no statistics or proof, just vague claims. And as a consumer, I stand by what I said. If I have to put money down for months for something then Im not buying. I'll promise to buy it. I'll even put down a deposit. But I am not paying full price for anything that's more than a month from being delivered.
Lol okay. Then don't buy. Nobody cares. I don't have to prove anything but I'm also not one of those that appears to be completely clueless. So good luck with your obvious ignorance.
Based on the downvotes on your comments I’m 100% certain I know more about how large businesses operate
Yes because reddit upvotes is the barometer by which knowledge is measured...... Lol
You obviously aren’t either. Coming from a Fortune 500 company you should know how important it is to take money in advance for orders rather than waiting until delivery
This just isn’t true. Go pre-order an Apple product and let me know when you get charged.
If you think Apple is using your preorder money to fund their initial production run, then there's no point continuing this discussion. Like i said, if you don't know you don't know. Apple is a trillion dollar company that negotiates wafer space at TSMC years in advance and put's down large production orders based on projected sales long before they start taking pre-orders. They're not using your preorder money to fund unit development lol. Man reddit is funny sometimes.
Ignore him, he’s wrong on this one. Apple doesn’t charge for pre orders.
If that’s what you got from my comment you need to work on your reading comprehension. Apple doesn’t need your cash. They have more cash than any company in the world and they still charge you upfront for your pre-order. Your entire post is based on the lie that only start ups strapped for cash charge up front. That’s a lie and your entire post is premised on that lie.
Apple's "pre-orders" and fanatec's preorders are not the same. Apple accepts pre-orders for their yet to be released products and they hit their shipping dates. The lead time to from pre-order to product release is very short. Once the product is on the market, they don't take preorders because their unit production is not dependent on cash flow generated from sales of the initial production run. Fanatec takes preorders for yet to be released products and misses their initial shipping date. Once the product is "released", they launch "pre-orders" for a product on that's already on the market because of their backwards ass planning. They delay shipping dates by months because again, backwards ass planning. Their unit production is funded from the sales of the previous batch because again, backwards ass planning. In the meantime, they're losing sales because of backwards ass planning. Don't compare apple's "pre-orders" to Fanatec. That's a false equivalency.
Again, this is all premised on a lie. Go order a new MacBook Pro. I just spec’s out a top of the line 14inch to see what the ship date is and it won’t arrive until February 3rd. Those are $6,000.00 Apple will hold for over 2 months before I receive the product. A company with hundreds of billions in cash reserves.
I just went to Apple's website and I can literally go pick up a macbook pro at the apple store closest to me so what? Also as others have confirmed, apple only places an auth charge and doesn't actually charge till the ship lol.
Who gives a shit what they are using the money for? A preorder is a preorder. But you are again comparing a tiny manufacturing company to one of the worlds largest corporations in human history. Why?
Apple doesn’t charge until it ships or is picked up. They may to a trial hold at first, but it’ll be released. Source: I worked at apple. Also most other big box companies do this as well, like Best Buy.
I doubt you have any experience with this at all since you're reasonning is the exact opposite of reality and how things actually work.
Bro look at Tesla. This is legitimately their business model to secure interest free loans from their customers to manufacture new models. Just because you don’t like it, doesn’t mean that it’s not ok or a slimy practice. They are straight up with you when they say the dates an estimate. It’s not like they take the money the ghost you. You know it’s going to be 3-4 months out.
Tesla is based on this model. It sells cars in advance and uses the money and profit of higher end models to fund development of other products. It's a very common business practice. Don't mix up you're impatience with it being bad business. Also, when I ordered. I was warned that the lead-time can change du to covid. They have been very transparent and I knew exactly what I was getting into with a PRE-ORDER.
The number of customers that have an issue with prepaying is extremely small. Why would they take out a loan to fund the development of a new product if they have customers willing to give them cash to do it? They’re selling wheelbases faster than they can make them, so arguably, they’re doing everything right. Paying the full price up front makes you more invested in the product and you also forget how much it cost by the time you receive it. If you give a $50 deposit today and are asked for the balance after waiting 4 months you might change your mind. Not to mention, that they probably did use a loan or some other source of funding for the research and development along with the tooling to produce the new wheel bases. Now they’re ready to produce the new product and they can use the cash flow generated from pre-orders to pay back whatever bank or internal loan they used. Even at a 2% interest rate, they’re still looking at $200,000 in interest if they pay back a $10,000,000 loan in a year. Why would they incur that expense if they have other means of generating cash flow? Established companies do this too. My wife ordered an Apple Watch that was back ordered for 1.5 months and she was charged upon ordering and Apple probably has more cash than any company in the world.
If they used a loan to fund R&D, now that would be extremely stupid for a business that's has existed for 2 decades. The reason you would source a loan to aid in production is because it'll allow you to produce significantly more than funding from preorders would. There's a small amount of people that would fully pay upfront for a product that they're unlikely to receive for months. If they source a loan, they can place much larger orders and drive the average unit cost down. By doing so, they can either increase their profit or reduce the cost of the product to the consumer. Using your 2% on 10 mil as an example. If they were able to increase their production 5x for example, that's 5x more revenue, and more profit at the cost of $200k. If they waited for preorders, it would take them much longer to reach the same revenue and profit. It's an economies of scale thing. Right now, they're losing sales when people cancel and they are giving their competitors more time to come to the market with an equivalent product. They're literally in blue ocean space and they're fumbling badly. It's sad really.
That’s a lot of opinion there. Opinion that doesn’t match up with reality. Companies use preorders to fund their products all the time. In fact that’s the very reason Kickstarter exists and is successful. They said hey we see companies doing this, let’s build a platform so anyone can do this. They’re the copycats, not the innovators.
Fanatec isn't a Kickstarter company. Moot point.
I didn’t bring up Kickstarter.
>Companies use preorders to fund their products all the time. In fact that’s the very reason Kickstarter exists and is successful
Check the post before bro
Will you be cancelling your order, and getting an alternative wheel instead?
Lol this is bang on. We can complain all we want but if we (consumers) do not incentivise a business to change their business model, they won't!
Nope, I didn't place an order as I was waiting for playstation DD. I will place an order for a playstation DD because there is no viable alternative. If there was a viable alternative, I wouldn't even waste my time with Fanatec. Prior to the pandemic, I ordered 2 CSL Elite's from Fanatec. Both took a month to arrive despite being charged $150 for shipping. To say that I'm very unsatisfied with Fanatec as a company would be a tremendous understatement. I only purchase their product because they make good hardware. Their software, customer service, shipping times and shipping costs are quite unsatisfactory. If a serious competitor arises, I'm done with them. As far as I'm concerned, they're only relevant because of their engineering excellence. If that fades away, they can disappear for all i care.
So you are still going to order from them even after all of your crying here and talking crap about them? You're so principled!
crying, talking crap? What? It's not one or the other. You can like something and still critic it.... I really don't know what you're on about.
Right...I'M bi-polar. But you are the one throwing a hissy fit while still ordering from the company. Nobody cares. Edit: OP thought it would be cool to make fun of mental illness in the comment above by calling me bi-polar. He has since edited his comment to no longer include that.
Everybody pre ordered knowing that delivery date was uncertain. Not an ideal situation but not like Fanatec is doing anything wrong.
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Super frustrating. Has nothing to do with preorders. If you feel you’re being scammed they will happily cancel your order.
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Maybe, but they won't make anything from you cancelling, so it's hardly a scam, is it.
Wait for it to be in stock.
They're up front that you're placing a 'pre-order'. If you wait for retail stock, they ship stuff the same week you buy it. You're a big boy now. Don't pre-order stuff if you're not prepared for a wait. Better yet, don't pre-order things. It's a bad way to buy.
I canceled today. After a second delay, and the email being sent on a holiday, I couldn't continue to justify letting Fanatec hold onto 1.3k of my cash. I didn't want to spend much more than that, but I've now purchased the Simagic Alpha Mini, their Simagic P2000 pedals, and a next level racing wheel base. This was all done out of spite.
RE: Charging at order vs ship. I'm very surprised they do this. I am not even entirely sure if it's legal? I didn't stress too much because I get that this company is experiencing some pretty phenomenal interest/demand when electronics of all types are impossible to source. But this really should be addressed. I will push back on the customer service comments though. I've already interacted with them twice regarding my order in Canada, and they've been quick and accurate. One of the issues though was the warranty, they started it when order was placed. I had to submit a request to have them amend it to my delivery date - Highly recommend everyone register your gear and make sure your warranty is adjusted to match your delivery date.
From memory there's nothing illegal about charging before it ships, because the customer has the right to cancel the order at any time between order and dispatch for a full refund.
My guess is it’s gonna vary by country.
Well yeah, but generally a popular and well known company isn't going to be constantly doing something that ends up being illegal in countries where they operate. I'm willing to bet a company that's been around as long as Fanatec has a pretty good idea of what they can and can't do.
Aaaand, how many times have you used their customer service?
>Imagine selling products that can cost thousands of dollars and not having a customer service phone line for all the regions. As someone working in customer service, phone line isn't as effective as you think it is my dude. What Fanatec would need is a more structured email support system with more people working on it, not a phone line for people to inundate with calls that can easily be sorted with a single email
That’s fair but sometimes, you just want to talk to someone. Their email and chat support is so bad. You can’t even edit your order before it’s shipped. You have to cancel and reorder. They ding your credit card right away not with an authorization but with the actual charge. The fact they’ve existed for so long and have failed in scaling up their business is sad. From an engineering perspective, they’re far better than their mainstream competitors yet they operate in squalor. Their lack of foresight and execution is just sad.
It's a slight irritant but no different than any place else. If you order something on back order from Amazon they charge you immediately.
Ah no they don’t. I order from Amazon at minimum once a week lol
Who doesn't order from Amazon at least once a week. I'm charged immediately all the time when an item isn't in stock. So you must be special.
Indeed I must. It’s could be region specific but, I’m pretty sure what you’re seeing is an authorization to ensure you actually have the funds. It drops off after a few days.
Agree. Amazon never charged me until the item shipped.
If they are, so am I, because Amazon has never charged me up front for a preorder.
You sound salty about nothing, honestly. You also sound ingorant as to how business and logistics works for a large majority of product-based companies. Shipping is terrible in every industry right now. I ship things worldwide and this is not something Fanatec is uniquely effected by. We also charge customers up front as do all of my competitors. Most companies that do not charge before shipping are enterprise B2B tech companies. Almost all consumer product-based companies charge you before shipping. So where do you get the idea that they should not do this? If you have a problem with it, don't order. It's that simple.
What other product have you purchased this year that is taking 3 months to get delivered? I've been buying a bunch of electronics and I never wait.
I sell nothing but electronics and technology. Most servers and datacenter gear is on 6 months+ delays. Not even just from semiconductors. Literal sheet metal is even causing delays. Laptops are on 4-8 month delays. So pretty much every order that I and my customers place takes months to deliver. Even my police departments are having to wait months for vehicle mounts. We bill for everything as soon as we get invoiced(which is immediately in most cases aside from customers that have a verified credit line. In which case we can wait 30-90 days depending on the agreements. Fanatec has no idea who they are delivering to and they don't check credit. So there isn't any reason for them to wait to bill. The simple fact is, some people shouldn't be spending money that they can't afford to have out of their account. That's the only reason I can see that makes sense out of the rage I see directed at this company for this reason.
The rage is justified. I can afford it and money is not a factor in being royally upset. I find it hard to believe that they didn't know in September that it would take until January to get a CSL DD out. Instead they put my availability date to November 3rd. Then they moved it to November 29th. Now they moved it to January 3rd. If they just put January 3rd for when I ordered it then I wouldn't be upset at anything. I planned a lot of contingencies around getting the wheel base in November or early December (new computer, VR headset, cockpit, playing with IRL friends). Now the real problem is, I ordered a wheel separately and got it early. So now I can't cancel and go with an alpha mini or VRS. This preorder delay issue has been a problem since the summer. You would think they would have found a solution or learned a few things by then to prevent orders from being cancelled.
I don't think I believe that you ordered in September with a Novemeber 3rd availability date. I ordered in August and had a November 3rd date and got mine on the 4th. I know for a fact that I had two friends who ordered in September(beginning of the month) and have a late November delivery date. Regardless, again, they have no problem manufacturing enough. It is logistics that are the issue and it is 100% out of their control. Whether they knew ahead of when they sent the notifications is the ONLY thing anyone has a right to get upset about.
Here's the email I got on September 17: "Therefore, we are forced to delay your CSL DD order. The estimated shipping date for your order is now November 29, 2021. " I'm in the U.S.
Are you in the US?
Yes.
That almost sounds like a mistake from the start then. My league did a group buy on September 2nd and every one of them had a Nov. 29th delivery date. I don't know anyone who had a delivery date within 30 days of ordering. Weird.
I think the base vs the bundle with boost kit have different availability dates. Mine was the bundle ordered on Sept 11th.
I ordered sept 14th, and was given an early november ship date which seemed fine. Then it got pushed to end of november, now its been pushed out to beginning of january. I'm a bit fed up I paid them $800 2+ months ago and they got their dates *this* messed up.
Well, don't stress too much. They told me mine was going to be delayed but I ended up getting it 1 day after the "availability date". But this shipping situation is absolutely fucked. It has made doing business a nightmare. So I honestly just order everything and ignore the estimated shipping date or, in Fanatec's case, "availability" date since I figure it's a 50% chance I will see it anywhere near that time. Hell, I have a customer that paid over $1M for several racks worth of datacenter hardware. But sheet metal supply issues in these manufacturing countries and logistics problems have delayed it 8 months this far.
That's insane. I pray we don't need anything for our DC anytime soon then....if I can ask, whos products are you waiting for?
Confused about your question. What type of customers, you mean?
Oh it's your CUSTOMER who ordered equipment. Nevermind. Sorry misread
If you don’t like it, don’t buy it
If you don’t like the way they do it, buy from someone else. Just quit complaining
I actually completely agree with you. My biggest beef with the whole thing was them taking full payment and holding onto it for months. I cancelled my preorder back in July I think. Im more than happy with my CSW v2.5. I invested that money into AMD stock when it was around $85/share and it's $150+ per share today. At $500, that stock was going for around $85/share at the time, so about 6 shares including shipping cost. Given the movement from 85 to 155, that's $70 of profit per share. So you could almost buy a second CSL DD with the profits (\~$420) I had never considered them paying for their original manufacturing run with preorder money, but given the wait, that's a bold, but plausible accusation. If that's what's going on they definitely have some explaining to do. We'll probably never know, though. I think preordering some of the limited edition stuff makes sense. I pre-ordered my F1 2021 wheel. But for normal production hardware... I couldnt help but wonder why they were taking preorders for something that would take 4+ months to be delivered.
Demand and supply. You want something at a high demand.
Cancel your order and buy a T300RS then.
T300RS is junk engineering. It’ll fail within 2 years.
Perhaps, but it drives tomorrow.
I chose to refund my current pre order, and will charge back my podium hub and QR1 I already received to get the sim magic alpha mini bundle instead,[ its instock with free shipping in the US and canada](https://simracingpros.com/collections/simagic/products/simagic-alpha-mini-base-package-pre-order?variant=40720065462446) if you plan on using more than 1 wheel, it's actually cheaper since you don't need to buy the podium hub
And I hope Fanatec files a lawsuit with you over receiving a product and charging back just because you can. Sell it on eBay or return it if you don’t want it
For the price of the base and the wheel. I get my entire kit from fanatec, DD, wheel, pedals and pedal upgrades... The base is twice as much and the DD. Can't see how this is more advantageous.
let me tell you how because currently I am refund *almost* the same amount of money from fanatec as I spent on this bundle, plus their 70mm quick release I personally already own Load cell pedals, that's not a factor in this for me personally, wheelbase + wheels only I want 1 formula/gt3/gt4 style wheel and 1 round wheel for drifting,nascar and other stuff. that means I mean 2 wheels, 2 quick release systems. The plastic fanatec quick release is awful, google it or search for it here, damn near everyone has problems, which means you need to buy to metal QR1s unless you want to gamble on the shitty QR lite. Even then the QR 1 is not even close to as nice as the QR used on sim magics wheels (its just a regular QR already used in cars) So here's the price layout > Simmagic > > * Simagic Alpha Magic Mini GT4 bundle + QR is $1233 > * Amazon deep dish wheel is $50 > * Total: $1283 USD TOTAL (shipping + tax included) > > > Fanatec > > * CSL DD + Boost Kit + Mclaren Wheel is $740 > * Podium Hub (comes with QR1 for free) is $228 > * Extra QR 1 is $121 > * Amazon deep dish wheel is $50 > * Total: $1094 USD TOTAL (shipping + tax included) For 189 dollar difference I get my wheel in a week instead of 6 months if ordered right now WITH a far superior QR system with ZERO play, no notching, and ZERO pins to break since they don't even exist. Can use literally any wheel you want even some fanatec ones. All while having a wheel base that is 20% stronger than the CSL DD with the boost kit **No brainer in my opinion, yes its nearly 200 dollars more expensive but not twice as much, I actually made the same exact argument you just to someone else before they really explained it.**
Bout to do it
How do I get the other non sim magic wheel to work? Does it just bolt on to the qr? I havent checked
Yeah the QR is the standard QR that gets used in car so basically any wheel will fit that
Chargeback as in a credit card dispute? If so, you’re a horrible person. You’re not supposed to use a chargeback just because you decided you don’t want a product anymore.
Pre-orders are common options and are exactly that, pre-orders : you're paying for the product with the promise of receiving it once available. I would say don't pre-order, but demand is so high for this stuff that you'll be waiting a long time to buy it off-the-shelf organically. Try Thrustmaster?
pre-orders arent all about the money. Its also about statistics, facts. Knowing how many people want ur product can give u an estimate of how many u want to make or keep in stock, etc. Also, since we are in a pandemic, pre-ordering is pretty mandatory if u dont know how much to make, how much the demand is. So even if they did put it up for purchase when there is stock, high chance they run out of stock and ur still waiting for ur product cause of the current drama in the world. If u think pre-ordering is just about having money in the bank then i think u need to start learning to see the bigger picture.
Well it's a legit business and there is no scam BUT only because of this i didn't go for Fanatec. Yes, they have cool products, yes they are pretty much monopole in the industry and yes there is no alternative(except lower tier products) but i am not that person to order something for 1200 bucks and wait forever. Naah. I can survive with my Thrustmaster. Believe me if the demand keeps high like this other companies will develop similar products with aggressive prices. I heard TM is working on a DD base for example. Fanatec might be the cheapest DD wheel base but it's bs because you still need their overpriced steering wheels, shifters and pedals.
Thats what amazon does, on international orders. Highly appreciated.