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Bad News - Sherline Closing End of October

  • Thread starter Thread starter CLB
  • Start date Start date
  • Watchers Watchers 17
They originally were a niche business selling dependable, well made machines to hobbyists.

Thinking it through it is a niche market which suggests a limited sales base. Everyone who wanted a machine has one and built to last so there is no follow up sales in parts or replacement of a machine. It was a onetime purchase. I hit that wall back in my NRG days going to conferences and selling wood to the niche scratch builders in time the little market got saturated, builders had a stash to last for years. It did not put the Lumberyard out of business because it was not my source of income just a sideline. in the case of Shirline too big of a business venture for such a small market.
 
Likewise, we can choose how much hi-tech to incorporate into building models. My shop is not open to these hi-tech invasions as there’s nothing there connected to the internet. I get pleasure by building models using 1960’s technology.

my model building is hands on minimum tools but i did step over the line into higher tech then realized trying to keep up was getting way to costly. Old plotters, printers and scanners do not run on new computers and new computers do not run old software and old devices. But the tech was used more for design and not model building.
I do not need a CNC mill or lathe or CAD i do know how to use a T square and triangle and a drafting table and i can read and understand a set of plans.
 
I know this blog post is apolitical but Were American goods produced at a competitive price ( including shipping) then there would not be any issue.
 
the hobby market is not the ideal place for Sherline because the hobby of ship modeling is 90% kit builders and they do not need expensive precision machines the other % use hand tools. So if Sherline started to make quality hand tools they might survive.

i have been in the workshops of master builders and here is what you see a lot of hand tools, a drill press, grinder, rotary tool and a vice. No CNC machines, no mills, no $700.00 4 inch table saw. Where is the $450.00 thickness sander model builders can't live without?

DSCN8664.JPG

This is what they do "by hand"

DSCN8700.JPGDSCN8704.JPG8613.jpg8625.jpgxDSCN8629.jpg




=

DSCN8692.JPG
 
Some of the issues were not price related; that their tools sold to a limited do not need to be replaced, and the rapid emergence of new technology that further limited the market.

Roger
 
Some of the issues were not price related; that their tools sold to a limited do not need to be replaced, and the rapid emergence of new technology that further limited the market.
Roger

I heard you on the wireless back in '52
Lying awake, intently tuning in on you
If I was young, it didn't stop you comin' through
They took the credit for your second symphony
Rewritten by machine on new technology
And now I understand the problems you could see
You were the first one
You were the last one
Video killed the radio star
 
Steviedean said:
Has nothing to do with Trump.
Click to expand...
Don't be so sure of that. Because of his policies and actions many consumers outside the US have developed an ABA philosophy (Anything But American). That's a real thing. Does it have a direct impact on what has happened with Sherline? If the majority of their sales are domestic, then likely not. If lets say, a third of their sales are international then yes, it's a real consideration and shouldn't be dismissed lightly. Regardless, it's always sad to see a long time manufacturer of quality products decide to close up shop. That said, I can certainly understand why, given their detailed explanation of their situation. Sad indeed.
 
Dave Stevens (Lumberyard) said:
Model ship kits, tools, milled wood, is getting more and more costly to the point this hobby will be for only those who can afford it.
Click to expand...

Very true, but considering the cost of most decent ship model kits these days, a serious modeler is money ahead by investing in quality "old 'arn" stationary power tools by stalking the online "garage sales" like Facebook Marketplace and picking up the bargains when the opportunity presents itself. A decent 14" bandsaw can be had for $300 or less. A decent 6" planer for $200 or less. The obliquus Sieg-built 7X bench top lathes with some tooling can be found for $400. Investing the price of one of those $1,500 kits over time can easily equip one to build any number of quality models of any subject with scrounged wood they milled themselves for next to nothing and, should one have cause to abandon the hobby, those power tools can usually be easily sold for as much or more than the seller put into them. Just sayin'.
 
Spree Three said:
I know this blog post is apolitical but Were American goods produced at a competitive price ( including shipping) then there would not be any issue.
Click to expand...

One of the biggest factors in terms of international trade in recent times has become the relative demise of maritime shipping. Decades ago, international purchases, for example a small tabletop miniature lathe like Sherline sold or a large book, could be packed and shipped by "snail mail." It would take as much as six weeks to get something from England to the West Coast of the USA because these packages were shipped on cargo vessels. Then, increasingly, international package mail began to be shipped via air freight. Air mail letters are one thing, but when the item starts having any significant weight, the air freight shipping skyrockets. This is why so much of the small niche vendors who used to ship products all over the world found their products being unmarketable when an international air freight shipping charge had to be added to the mix. Larger manufacturers, such as Proxxon, can afford to sell on the international market by bulk shipping unsold products in cargo containers to in-country distribution centers. A small outfit like Sherline doesn't have the economies of scale that permit that.
 
Dave Stevens (Lumberyard) said:
The direct competition comes from other manual and cnc machines like ours. When we started, Unimate was the only real competition. Now there are many competing machines on the market.

Well i guess the bright side is there are still many machines still out there that have replaced Sherline.

Next is the direction that world manufacturers have taken, and the world's consumers have accepted. This is the “disposable world”.

this is the biggest problem and it shows it ugly head in the computer world perfectly good printers or printers that can be repaired but the cost of the part and labor charge is almost the cost of another printer. Try to get an appliance like a dish washer or washing machine or clothes dryer fixed simple repair but very costly just buy a new one. A delicate balance cost, build to last vs built to be replaced
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Companies, starting many many decades ago didn't choose to incorporate Planned Obscelence into their business models. Not to mention the expense in inventory carrying cost.
Not unlike the legacy costs in employee pensions. Where there are more retired people on there legacy pensions than currently employed at the same company!
So what did "they" do? Third party outsource.
Sorry. I digress. Sherline is not the same as the domestic auto industry.
Most young people don't do much that requires precision these days. Let alone know what a micrometer is.

Funny.......
I'll bet my dear father, if still alive, was sayin' the same thing to his friends when I was coming of age.
 
Working capital is The term used to describe money required to finance day to day business activities. It is the difference between cash paid out (paying employees, vendors, etc.) and that coming in from sales of product. Running out of working capital is a common reason why businesses fail.

For small privately owned companies working capital needs are usually met by a line of credit from a bank. There’s an old expression that says that banks only lend money to those who don’t need it, and unfortunately it’s true. For small privately owned companies especially those not showing a profit, banks will demand collateral; physical assets; company and owner’s. Banks also require annual audited financial statements and when the CPA includes the dreaded “going concern” language in his report that can be the end.

I don’t know if this was Sherline’s problem but they were trying to turn a business around in a tough environment. Anyhow, throughout it all they maintained high standards and great customer service. They will be missed.

Roger
 
How sad that this company is going out of business.

"The biggest competition is the Chinese imports. These Chinese machines also show up more in web searches and any search similar to “best tabletop lathe or mill”. Sherline doesn’t show up in any of these comparative searches, only Chinese machines."

The quote above is very true!
Several months ago I was searching for a small lathe.
The only lathes that I kept finding were machines from China.
I did not see anything regarding Sherline made machines.
Very sad as after briefly reviewing their product line, I came away with the feeling that they are indeed a premier manufacturer of machine tools.
Their product lineup is extensive and their website is very well done.

I imagine they will be very sorely missed by their costumer base.
 
Roger Pellett said:
Working capital is The term used to describe money required to finance day to day business activities. It is the difference between cash paid out (paying employees, vendors, etc.) and that coming in from sales of product. Running out of working capital is a common reason why businesses fail.

For small privately owned companies working capital needs are usually met by a line of credit from a bank. There’s an old expression that says that banks only lend money to those who don’t need it, and unfortunately it’s true. For small privately owned companies especially those not showing a profit, banks will demand collateral; physical assets; company and owner’s. Banks also require annual audited financial statements and when the CPA includes the dreaded “going concern” language in his report that can be the end.

I don’t know if this was Sherline’s problem but they were trying to turn a business around in a tough environment. Anyhow, throughout it all they maintained high standards and great customer service. They will be missed.

Roger
Click to expand...
There's another old business adage that goes something like....
Don't let your overhead drive sales. Let the sales drive overhead.
Guess how I know? I worked in a small shop when one day we were all called into a conference ..........
I feel terrible for those Sherline employees of tenure. I hope they weren't blindsided.
 
A few of the factors that may have brought about the downfall of the company ... there is a limited number of people that will buy a small lathe at such a high price even though it is of good quality. And the fact it is good quality means you are not likely to buy another one, I still have my first sherline lathe with brass bed.
Sherline like Lego a number of years back tried to expand their sales by going into other markets and selling things the original buyers of the lathes did not need. Hobbyist do not need to have industrial capabilities and that was not the original purpose of these lathes. They should have stuck to what they do and looked at some way to make the lathe less expensive for the market they have. I would certainly have bought a second lathe if the prices had been more reasonable or at least available where I am now.
Somehow they have choked their marketing in europe and only a few companies can even distribute the Sherline product. A whole market was lost because there is not sales in many parts of europe. In Serbia where I am now, I can only buy from a company in Canada. Shipping for a simple lathe from canada was estimated to be over $800. Direct shipping from Sherline was about $150 but then they changed their mind and said they can not send it here. How if that a good marketing strategy if you don't allow shipping from your own company to people that want your product.
In the end .. I still have my lathe but it is getting worn and I need a new 3 jaw chuck but can't get one.
 
One thing to remember about lathes is that within far greater limits than many realize, you can make small things on a large lathe, while you can't make large things on a small lathe. I think a lot of people figured out that they were paying a far greater premium for Sherline's small footprint miniature machines and proprietary tooling than that small footprint was worth. While I doubt many of us who own the earlier generation Unimat system machines, now long out of production, would readily part with them for a lot of good reasons, were we to be in the market for a benchtop lathe today, we'd be looking a those in the 7"X and even 10"X or 12"X size range that use generic tooling, considering what they offer in capability for the price.
 
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