The pricing of things

The part about making electronics for people to buy that I really don’t do well is the price. Designing something, while it has some challenges, doesn’t stump me as hard as picking a price for the result.

Covering the obvious costs (ie, the components) is usually pretty easy. Covering my time is harder, since even for assembly time I don’t have a useful value for it. Not one I could reasonably apply.

There’s also some complexity in the cost of the components. I’m not making thousands or millions of these, so the prices for components are volatile and sensitive to quantity.

This then means the price for initial runs has to be just high enough to cover the big costs and a little more to help fund the next run, but not so high it won’t sell at all.

While I’d like to think I’m inventing new things, I am not and the market already has a price for many of these things. The heuristic of “cost times three” breaks down – I don’t have the same production capacity or immediate demand to make that viable against the market price.

A lot of the future is about getting better pricing on the parts I am using, and improving build processes so that it takes less time to do each build.

Funnily enough, I am working through the pricing for the Kakapo dev board, which is what prompted this post. Should be an announcement soon on what that looks like!

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