The Economics Of Selling Your Hardware Project – EEVBLOG [Reblogged]

I’ve had quite a few people ask why I am not selling my µCurrent through international distributors like I did last time. Well, that’s a good question, and I’ll answer that as well as breaking down the economics of selling your own hardware product, what price you should sell your product at, and the pros & cons of using distributors.

The reasons I am not selling the µCurrent through distributors (resellers) this time around are as follows:
1) I make a lot more profit selling it myself. And, if I’m honest, the idea of a distributor making morethan I do per unit kind of bugs me. Even if it means more work for me.
2) I have spent many months and a lot of effort setting up an Australia Post commercial account, and a system that allows me to sell and distribute my product easily and cheaply. Primarily for the Kickstarter campaign, but I was also thinking for the future. To now not take full advantage of that would be silly.
3) The vast majority of sales for my µCurrent come from my large audience base and my own marketing, SEO, and word of mouth etc. Very few people who know nothing about it will stumble across it on a distributors site and decide to throw one in their shopping cart. It’s a fairly niche product.
4) Customers will ultimately get a cheaper unit.
5) I like selling my own stuff, I still get a warn fuzzy out of it.

#1 Speaks for itself. Frankly, whilst I do enjoy doing this kind of thing and it’s part of my hobby (I’ve been selling hobby electronics kits/products for more than 20 years now), I am ultimately doing this to make money. I have to eat and support a family, and this is my day job. So the more profit in my pocket the better. I have no vested interest in helping make the distributors more money than I do.

#2 This is a big deal. I’ve done all the hard work and now have a very optimised process for shipping. My µCurrents come to me tested and individually packed, all I have to do is operate the shopping cart and eParcel system, print the labels and customs form, slap the stickers on and drive to the shipping depot nearby. It’s easier than it sounds. It takes me less than 2 hours tops to process 100 units and drive to and from the depot. Heck, the post office will even come and collect them if I bother to arrange it.
Incidentally, it would take about the same time to pack and ship bulk units to the distributors. So the time saving question has been rendered fairly moot.
This is a lot different to when I was doing the testing/packing, and manual labeling and customs forms like I was before. Back then it made sense to use a distributor to save a lot of time.
Although I will admit that there is the hassle of returns and inquiries, but this isn’t large. I get many inquiries anyway even when people buy from distributors. It’s not 100% hassle free either way.

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