How (not) to sell PCBs: PCB drawer first year sales breakdown
A while back we started selling Bus Pirate v3.5a-SOIC “DIY Edition” PCBs from the free PCB drawer for $3.95. Our informal survey and found that $5, including shipping, is a sweet spot for one board. So we hacked Zen Cart to accept PayPal for only one item, and started taking orders. With shipping, two boards from the PCB drawer are $9.90, right in the $5 zone.
Here’s a breakdown of the trial, based on our 2011 sales tax return.
100 PCBs were made for $124.90, including shipping. We contracted fulfillment to handle and ship orders. They charge $25 for receiving the stock and warehousing it. We also provided our own envelopes ($21.67 with shipping). The total startup cost was $172.
In four months from September to December 2011 we sold a paltry 40 boards to 29 customers for 158 bucks, $227.25 including shipping. PayPal charged us $16.12 in fees, 7% or about 55 cents per order, to receive the money. Initial take: $146.94 in PCBs, $64.40 in shipping.
US shipping is under priced at $2, international is over priced at $3.25:
- A US order runs about $0.88 in postage, 22 cents for the envelope, and $1 for fulfillment ($2.10)
- Non-US orders are $1.25 postage, $0.22 envelope, and $1.25 fulfillment ($2.72). Initially international shipping bounced around a bit, as high as $4 total, but it seems to be under control now
We received $64.40 in shipping and handling. Our aggregate fulfillment cost was $81.69 for 29 orders, plus $6.09 in envelopes ($87.78). We lost $23.38 from PCB profits on shipping differences. This could have been avoided by doing it ourselves, but even then someone should be compensated for handling the order.
From the 40 PCBs sold we received $146.94, less $23.38 in shipping overruns ($126.56, $3.16 per PCB). Each PCB costs $1.25 plus $0.25 warehousing, leaving a profit of $1.66 per PCB.
With $66.40 of profit we can’t cover our existing costs like the remaining PCBs ($75), envelopes ($12.60), and warehousing costs ($15). In the end we’re $36 bucks in the hole in this experiment.
Obviously this is a failure in the business sense, but profit was never a motive. We wanted to:
- Test real orders in Zen Cart with PayPal integration
- Learn about the cost and time involved in retailing PCBs
- Judge the demand for $5 PCBs
- Learn about our local sales tax licenses and returns
- Get a bit of publicity by putting PCBs into the hands of dedicated builders
- Try something cool
All of these goals were met, so we consider it an overall positive experience. Definitely not something to expand or continue beyond the first batch though.
There’s still a handful of PCBs left, get one while you can.
Grab the raw sales data spreadsheet from Google Docs.This entry was posted in how-to and tagged how-to, pcb, Sales breakdown.