I just sent off revision one of what may become this board, and I wanted to take the opportunity to talk about some of my goals, especially as it relates to pricing and customization.

Goal A: Quality

I will never compete with China playing their game. For that reason, I am uninterested in trying to compete at being the lowest price. Even trying to play the game of "I'm not the lowest price period, but I'm the lowest price with THIS niche feature!" isn't a thing I want to do. If I ever got successful, China would come in and make it cheaper. The world is just set up to give them an advantage in that game.

I CAN, in theory, compete on quality.

That said, I have been poor before and am not the type of person to spend money foolishly. I don't expect my customers to be that type of person, either. And I realize that in this pandemic, there are lot of people who have had pay cuts (actual, or effective), and are having to spend money on far more important things than a niche within a niche.

All that to say, I want to find a sweet spot in price vs quality, rather than be the absolute cheapest or the absolute highest quality possible no matter the price.

Goal B: Flexibility / Customizability

My first product will (probably) be a control board that sits on your gantry. There are benefits to this setup (wiring being a big one), but also downsides. Not everyone has the same gantry setup. Do you have a BL Touch? Some other type of sensor? Klicky probe? How many fans do you have? Do you have a Mosquito Magnum+ with TWO thermistors and TWO heater elements?

So naturally, the idea of customization comes in. But customization actually costs a LOT of money. Not necessarily in parts costs, but in process costs. I find that most people underestimate process costs.

Goal C: Price

While price is at the bottom of my list, it's still there. If I can make a decision that doesn't impact quality or flexibility, but is cheaper, I will do that 100% of the time. Really, I think most companies would as well, but my intention is to keep as consistent of a profit margin as I can, and as I find more ways to save money over time (economies of scale, for instance, if this is successful), the price will naturally come down.

Interesting Aside: Economies of Scale

To hopefully add some interesting meet to this log, I want to drive home how important economies of scale are. Many components need power filtering capacitors. Often multiple of them. Often there's a range as to what value is appropriate to use, but 0.1uf is often an acceptable value. It can make a huge difference to standardize on a value.

If I were to buy my chosen brand of capacitor at that value one at a time, they would cost $0.10 each. Currently, I have 13 on a board (this number will likely go up), so just that capacitor would cost $1.30 per board if I bought them one at a time.

If I buy 10 at a time, they cost $0.011 per, so 13 would be $0.143. That's already a HUGE difference, and we're not even buying a whole board at a time.

If I buy 50 at a time, it's $0.078 per board.

If I buy 100 at a time, it's $0.0637 per board.

There are quite a few more price breaks, but if I buy an entire manufacturer box worth, it's $0.02704 per board.

From $1.10 to about $0.03 per board for this part simply by buying in bulk (~97% savings!). The prices can even get smaller if I buy multiple boxes at a time, but a manfucturer-box is a convenient stopping point.

You better believe that I'm trying to standardize component sizes as much as possible.

Unfortunately, things don't scale quite as crazy for the more expensive components that could be on the board. The TMC5160 that MIGHT be on the board costs $6.81 for a single, and a manufacturer box only gets that down to $4.05. (Also since they are so expensive to begin with, a manufacturer box costs $8,100 to order, and I eat that cost if they don't sell. The capacitor is more broadly applicable to other designs, and the entire manufacturer box is only $20.80, making it way less risky.)

How interesting is this rant about pricing? I'm not opposed to talking about the behind-the-scenes pricing more if people find it interesting. I am not afraid of giving away the secret-sauce, I just don't know if people CARE.

My goal for pricing, by the way, is to keep the manufacture-cost of the most basic board below $20. I have not decided how high the markup might be. There are multiple ways of calculating your target markup, they all give different answers, and ultimately you use them as implied bounds, then make an ultimately arbitrary decision. I can go into that in more detail too if people find it interesting.