Yesterday we asked how much you’d pay for a PCB from the PCB drawer. We played with the numbers and our findings are below. First, answers to some common questions.
Nothing will change with our weekly giveaways. We’d like to make boards available to people who want them, but don’t want to try to win one in a contest. We’ll still have free PCBs three times each week, and we’ll always send a free PCB to dedicated testers and developers. The unlimited PCB deal would be modified, purchased PCBs would not be eligible.
To start, we might stock 50-100 PCBs from the most popular projects. These would be proven designs, on 100% e-tested PCBs. You could buy draft/broken/prototype boards too, the kind we giveaway now, but our focus is on stocking specific boards such as the Bus Pirate.
Way more below the break.
Kits are cool, but we’re not going to make them. We’ve arranged SMD kits at Seeed in the past, but only 1 or 2 sold, most people want assembled hardware given the option. Due to the labor involved in putting SMD parts in bags, kits for our projects are generally more expensive to make than automatically assembled hardware. The good news is we consistently use the same parts, so after you order one project there are usually only a few new parts for the next one.
Just a few years ago ordering PCBs was painfully expensive. But now there are several cheap PCB services out there. Seeed and Itead make it cheap and easy to buy a couple boards. All our projects, even in-progress projects, are open source and the gerbers are available. We strongly encourage you to make our PCBs, and give the extras to friends. For some reason this doesn’t seem to happen often, so maybe there’s still room for a retail PCB store.
We’re almost ready to talk about the market research, but first lets try to guesstimate the cost of stocking and shipping a PCB. The Bus Pirate v3.5/v4 are 3.5cm by 6.5cm. Using Seeed’s Fusion service as a reference, 100 of these PCBs in red with 100% e-test is $124.90 with free shipping. $1.25 per PCB. You could get 10 yourself, red 50% e-test, for $35 + shipping ($3).
Currently we handle about 20 PCBs every 10 days, and mail them while watching trashy TV. People want paid orders to ship right away, so we’d need to ship daily. Either an engineer would need to take time away from lucrative hardware development, or we could hire an unskilled (temp) worker to stuff envelopes. Including Iowa state tax, federal tax, worker’s comp, lost time due to uneven flow of orders, etc, a minimum wage employee with no benefits will probably cost around $12/hour of active order fulfillment, but probably closer to $20. If that employee can fill an order in 5 minutes, each order has an additional $1 labor cost.
In addition to labor, each order would have shipping costs. Materials include a mailer worthy of a paid order (~$0.20) and labels (~$0.15) for each shipment. We’re now at $2.60 per single PCB order, a $1.25 PCB and $1.35 handling fee.
Shipping is about 1 stamp per PCB, 2 stamps for large boards. Ignoring the big boards, that’s about $0.50 for national and $1.00 for international postage. The shipping and handling for a single PCB order would be at least $1.85, $2.35 international. $3.10 for a single PCB order. It probably makes sense to charge shipping at the end instead of including it in the price. That makes it easier to do different shipping options and bulk discounts.
There would also be costs for lost orders and returns, say 5%? That’s an extra 6 cents per PCB and 12 cents per order = $3.28. This doesn’t include warehousing, electricity, or server costs because they’re already paid for by other parts of the business. There’s also no accounting for PCBs that don’t sell, and there’s an opportunity cost for administrative overhead (ie we could be doing other stuff).
Digging into our market research sample (n=70) from yesterday, the highest and lowest value for a single small PCB were $2 (7) and $10 (5). The most frequently mentioned price was $5 shipping included (39). The average price is around $6.01 (shipping included), if we get fancy with the shipping compensation it could be as low as $4.34 (without shipping charges).
If we go with the mode price of $5 including shipping, paypal will charge around 4% ($0.20) plus a flat $0.20 ($0.40 total) for processing (?). That would leave $5-$3.68=$1.32 of profit per board. If we go with the compensated average price of $4.34 and charged actual shipping costs ($4.34+$1.85=$6.19 for the first board) there would be $6.19-$3.73= $2.46 of profit per PCB.
Yikes, that got epic. If you’re still with us, here’s some followup questions. A few commenters will get free PCB codes:
- If we started with 50 or 100 of a single board, what project should it be?
- Is a $1.85 shipping charge reasonable?