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<blockquote data-quote="Phil Graham" data-source="post: 88558" data-attributes="member: 430">Re: Cost, BOM, and pricing considerationsJeff,I think its fair to say that price is a key factor on every purchase <img src="https://cdn.jsdelivr.net/joypixels/assets/8.0/png/unicode/64/1f642.png" class="smilie smilie--emoji" loading="lazy" width="64" height="64" alt=":)" title="Smile&nbsp; &nbsp; :)"&nbsp; data-smilie="1"data-shortname=":)" />I&#039;d love to think that I could get a product out the door at a $50 price point that did all this, but from a startup electronics venture standpoint, it simply isn&#039;t possible. I&#039;d be happy with a $50 build of materials (BOM) in low volume. John Roberts&#039; cautionary post above is well advised.As anyone who works for a manufacturer can tell you, the gross margins on your BOM have to be pretty hefty to be a sustainable business. You have to amortize your development cost, provide enough working capital to carry at least a small inventory, account for failures/returns/exchanges, provide enough sustaining cash flow to cover your variable costs, and ultimately drive a product with net positive cash flow within a reasonable amount of time. Without these pieces you&#039;re neither profitable nor sustainable.Also, over the life cycle of the product you&#039;ve got to provide some margin to lower costs while still retaining a profitable product in anticipation of the ever present push of market pressure and competition.If you want the above product at your desired price point, a major player is going to have to put it out in the field.</blockquote>

[QUOTE="Phil Graham, post: 88558, member: 430"] Re: Cost, BOM, and pricing considerations Jeff, I think its fair to say that price is a key factor on every purchase :) I'd love to think that I could get a product out the door at a $50 price point that did all this, but from a startup electronics venture standpoint, it simply isn't possible. I'd be happy with a $50 build of materials (BOM) in low volume. John Roberts' cautionary post above is well advised. As anyone who works for a manufacturer can tell you, the gross margins on your BOM have to be pretty hefty to be a sustainable business. You have to amortize your development cost, provide enough working capital to carry at least a small inventory, account for failures/returns/exchanges, provide enough sustaining cash flow to cover your variable costs, and ultimately drive a product with net positive cash flow within a reasonable amount of time. Without these pieces you're neither profitable nor sustainable. Also, over the life cycle of the product you've got to provide some margin to lower costs while still retaining a profitable product in anticipation of the ever present push of market pressure and competition. If you want the above product at your desired price point, a major player is going to have to put it out in the field. [/QUOTE]

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