PSOC 5LP Hat for a Raspberry Pi

This question has been a great learning experience from many perspectives. Here are a few points:

1. When it comes to "fair value", the chart is all over the place especially depending on which side of the coin you are on. Customers tend to be price conscious unless the product is unique and useful. Sellers have to make a profit without appearing to gorge someone in the process.
2. The article from Jan Cumps shows there is a reasonable way to price things if you may "expect to use a distributor in the future" to justify a 2.5 times markup. But even then he dismisses that as not really a true option. He did say he had found a way to minimize the shipping cost/expenses. I wonder how many go this far?
3. The debate between made in USA and made in China goes on. I see no light here. I have been to China and see how too many people leads to competitive pricing on everything made or sold beyond electronics. The mentality comes from a poorer China where everyone below the leaders had subsistence living and high taxes being more than 50%. You can go to centers where computers and mobile phones are sold and bargain on anything.

Truly I never expected this simple question to generate so much dialogue. But that is great for all concerned.

Cheers,

Clem

I've seen both methods get used. Typically the more traditional companies used to just apply a multiplier (e.g. just times it by 3) to COG for the more mundane products or ancillary ones or ones with little manufacturing effort (e.g. spares). However that method makes no sense generally, where normal marketing suggests that you should always charge what the market can bear, hence the reason for dealer agreements, artificial difficulties imposed to restrict grey imports occurring, etc. There are some exceptions to this, e.g. as I understand Starbucks tend to charge the same regardless of country. There are also some legal exceptions in limited conditions, because unfettered enterprise isn't always good for society. I'd hope there are also moral exceptions, not everything needs to be prescribed.

For example, (in some countries) legally you must not mislead people and falsely state an item is on sale to persuade them of some value that actually doesn't exist, nor can you charge anything you like to renew someone's land/property lease (under certain conditions) nor can you charge anything you like if a customer is genuinely dying of thirst and you happen to run a store selling water. Sad of course that such things actually need legislation, i.e. we cannot always trust people doing the right thing.

I like that the article mentions reasonable limits and that huge mark-ups are not possible if your customers are clued up (morals would dictate limits too, but we know that not everyone has these).

What the article hints at but perhaps is better to be made clear, is that even if you follow such guidelines and price at (say) 2.5 times COG, doesn't mean it is fairly priced. You can't make that decision without seeing what the competitive products are doing and how they are priced. You could seek differentiators like 'ethically produced' or 'organic' or 'hand-made' where the market is willing to pay extra for this. Is it fair for workers to earn next to nothing so that businesses can make more revenue? No, but equally is it fair to sell to a inexperienced customer base at a high mark-up to benefit yourself and your family?

Is it fair that Kickstarter only shows the actual profile of backed projects and actual backed sums of money that is hidden a few clicks away that an inexperienced customer base may miss?

Fact is, some products are just not viable if you want to sell with responsibility to your customers. As an example, I've worked along with a couple of friends and designed a product. It costs very little to manufacture. However, it makes no sense to sell it with a sufficient mark-up to be profitable yet be overpriced, nor would we want to price it at some amount that would be gouging customers anyway. So we have to look at different ideas, such as take a hit and just release it as an open source project so at least people can benefit from it. Or think of clever bundles or alternative ways to add value to it so that the customer benefits and it becomes a viable product. Unless we do that, the product cannot be considered a good product. It can be technically wonderful, the best in the world, but it is still a bad product if it cannot be manufactured and sold at a reasonable price and to that I'd personally add that morally it ought to actually provide a reasonable amount of value to a market that is larger than just inexperienced customers. As an aside I feel extremely uncomfortable that some deliberately information-hide, e.g. sanding off chip markings. There was a time manufacturers were proud to supply schematics or at least service manuals. Some manufacturers still do. Anyway, that's a digression.

Shabaz,

Can you point me to some products that you are selling? I'd like to see an illustration from your own work of the things you are saying.

Doug

Hi Doug,

I've provided some high-level marketing information in my last post, and provided some examples. However if you need further detail then I'm sure there are plenty of marketing case studies online for those interested in studying further.

I'd love to help, but I'm all about giving priority and my time to helping fellow engineers or those with an interest and passion for engineering or those who might think to support hobbyist/enthusiast projects on Kickstarter and need it examined (Kickstarter by its nature relies on the community as the feedback loop), I'm not into providing business or sales advice, and am very critical of Kickstarter projects (and I suppose their creators) for example if I feel they are misleading or are not in the best interests of the community or general public.

I will not suggest you have been misleading. However with regards to my time and priority I think the road has been travelled for long enough especially when I look at the 12 projects visible on the link highlighted in red below, and everything I read so far in this thread.

I hear where you are coming from. I was an expert on children until I had some myself.

 

Doug Gilliland wrote:

 

I hear where you are coming from. I was an expert on children until I had some myself.

 

Sticking to the point at hand and ignoring any innuendo (because it is not a great way for a Kickstarter project creator to correspond to members of a potential market), first-time backers, young adults (perhaps children if their parents allow them to use Kickstarter) might be inexperienced enough to not examine the creator profile.

The creator profile is typically all that potential backers have to go on; it is also a sign of whether a project creator has supported the Kickstarter community in backing projects too. When all twelve are unsuccessful, I hope potential backers do examine them to make up their own individual minds.

Just for disclosure, I have backed projects with actual funds several times; twice for Kickstarter (both were successfully funded) and once with Indiegogo (a higher risk, but it did deliver). Just one of the ones that I backed was unsuccessful in attracting the full funding.

I just did a quick survey for myself to check the substance of your comment. 3 of the top 4 Tech kickstarters running now have backed 0 projects. The other has backed 1 project. Apparently, it's not a big factor in success at all.

Sure, I backed some losers. I thought the Rocket Powered Bike was funny and I respected his sense of humor. The metal detector video series would have been interesting. I watch the similar show on TV. Lettuce reminded me of a pet rock. Blows my minds when I have had to retool certain projects to fit the criteria of the screeners and that one got through. I thought they deserved credit for that.

Arachnio as a fantastic serious project. I hope that the guy retools and re-runs the project. 3D Printing vintage bicycle parts would have been a good concept. Unfortunately most Kickstarter projects fail. I don't just back winners. I back anything that strikes my fancy at the moment.

I would hope my backers who look at my track record for completing projects on time. I am sure you did look at that but had nothing to say since there wasn't anything negative you could find there. I am sure with some effort you could tell me what I did wrong on all my projects so far.

I guess I'd rather be someone who tries and fails than someone who sits on the sidelines and criticizes those who are trying.

If it makes you feel better, I just went and backed a sure winner. For a dollar. No reward. Pure profit.

That is a sign of an entrepreneurial type person. One who would rather try many things and fail sometimes rather than waiting for a check at the end of the week. Good luck with this and keep trying.

Clem

Now I feel bad. I had a perfect record of only backing underdogs.

Now I feel bad. I had a perfect record of only backing underdogs.