Simply put – because REELEX could not survive on machine sales alone. Our annual machine sales are not very many, and thus with 40+ employees the cost of running the business would force machine prices to be extraordinarily high. This would make the barrier to adopt REELEX much too expensive and nobody would buy machines.
Thus, if REELEX tried to survive from machine and part sales alone we would be out of business. Instead, REELEX sells machines “at cost”. This means that when REELEX sells a machine it includes material, labor, development costs and overhead, but no profit.
The Royalty fees are collected from ALL REELEX licensees. Everyone with a D-750 pays the same fee regardless of how long they have been a customer, or how many machines they have. The small companies can compete equally with large companies with no favoritism. These royalties keep REELEX in business so we can continue to provide parts, service, know-how and decades worth of R&D to our customers. Without the royalty fee REELEX would be out of business very soon, and so would service and parts to support over 300 active REELEX machines, over 100 major cable producing facilities and thousands upon thousands of distributors around the globe.