D
Dr. O
- Jan 1, 1970
- 0
Sometimes I see these products which are so cheap that I wonder how they can
make any profit from them. For example, in my local hardware store they sell
electronic timer units for about $5. If you take in account the markup by
the retailer, the selling price (including profit) is probably no more than
a $1.50. These units contain, among other things, a LCD display, a relay, a
computer and a casing plus a two dozen or so miscellaneous electronic
components (resistors, capacitors, fuse, voltage regulator, diodes,
transistors, crystal), plus a single sided PCB.
I really wonder how they can make a product that cheap. I mean, if I add up
commonly used components available in the Western world (such as a Microchip
or Atmel MCU) I get a price which is at least 10 times the selling price,
without any profit at all and labor, taxes and such not included.
I know they make these things by the thousands, but even if I take that in
account (let's say 15% discount for every doubling in volume) I still cannot
get close to $1.50.
So how do they do this? What kind of microcontroller are they using, for
example. If I order a million 16c55's from Microchip, they'll probably cost
about $0.40 or so. How do I design a product *that* cheap. Let's say I have
an idea and I make a prototype with commonly available components, are there
special shops which can turn it into a ultra-low cost consumer product?
make any profit from them. For example, in my local hardware store they sell
electronic timer units for about $5. If you take in account the markup by
the retailer, the selling price (including profit) is probably no more than
a $1.50. These units contain, among other things, a LCD display, a relay, a
computer and a casing plus a two dozen or so miscellaneous electronic
components (resistors, capacitors, fuse, voltage regulator, diodes,
transistors, crystal), plus a single sided PCB.
I really wonder how they can make a product that cheap. I mean, if I add up
commonly used components available in the Western world (such as a Microchip
or Atmel MCU) I get a price which is at least 10 times the selling price,
without any profit at all and labor, taxes and such not included.
I know they make these things by the thousands, but even if I take that in
account (let's say 15% discount for every doubling in volume) I still cannot
get close to $1.50.
So how do they do this? What kind of microcontroller are they using, for
example. If I order a million 16c55's from Microchip, they'll probably cost
about $0.40 or so. How do I design a product *that* cheap. Let's say I have
an idea and I make a prototype with commonly available components, are there
special shops which can turn it into a ultra-low cost consumer product?