pubwvj
Member
Registered: Jan 2000
Location:
Posts: 45 |
quote: Personally I think $30 is a little overpriced[/B]
Unfortunately there is a bottom threshold for the Springboards that isn't far below $30. Consider the basic formula that marketing uses 25% of the price, The retailer gets 25% to 50%, the cost of manufacturing is typically about 10% to 30%. Any profit has to come out of the the rest, AFTER R&D and overhead is taken care of. Sometimes there isn't enough and product lines or businesses go broke...
The basic parts to build a Springboard module are about $10 for something simple, really simple. Then package it. That's the 10% to 30% for manufacturing. Here, assume best a case of 30% and you get a retail price of about $30. Assume worst case and you get a retail price of about $100... Ouch indeed.
At $30 if it was sold through the stores they would take roughly half (between store and marketing budget), leaving about $5 for R&D, overhead, errors, and profit.
At $30 and he sells it directly then it takes his time and effort to do those things and frankly he deserves the extra.
Then there is the whole risk element... You must spend money to make money.
One way to get around all of this is to mass produce so that the small profits add up. That requires greater upfront risks, bigger marketing campaigns, etc. More risk, _might_ get more profit. Read big business, venture capital, unlikely without massmarket appeal.
Another way is to keep your costs low and do it all yourself, the small-entrepreneur / craftsman method.
Another trick, with both of the above, is to add more features that don't increase the manufacturing costs much but greatly increase the perceived or real value of the product. e.g., Tailight + vibrator + accelerometer/tilt sensor + Smartcard slot or memory + good developer support for hooks into your little gadgets. This makes it reach a broader audience, compete more effectively with other vendors and leverages off of the basic costs. In many cases you can add extras without it costing too much more. But beware of creaping featurism like that which brought us MS-Word and Windows... Ugh.
If the price is too high for you, build your own... 
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Walter
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