Hi Jinx, Another thing to think about is that its quite possible that your competition has already payed back their R&D costs and has a much lower cost to manufacture than what they are selling it for. When your competition becomes aware of you cutting into their profits, they may decide to lower the price of their product as well. Start your price higher so that you and your comptetitor have "room" to stabilize on a price. If you start too low, they may be able to come down to a non-profitable level for you but be profitable themselves. Good luck, FJ >From: William Chops Westfield >Reply-To: pic microcontroller discussion list >To: PICLIST@MITVMA.MIT.EDU >Subject: Re: [PIC]: Product pricing >Date: Tue, 15 Apr 2003 01:48:45 PDT > > > I'm trying to put a price on a product that's ready for small-medium > > manufacture. It's based around a fairly simple F628 program that > > took around 20 (productive) hours to write and about NZ$47 worth > > of components. Hand assembly takes 4-5 hours > > [I can sell it for ~$350, but the nearest competitor charges $1400] > >You have what is known as 'flexibility', available to you because of what >you hope to be a large margin between your manufacturing costs and the >price >that the market will bear. Set your price low, and you can raise prices if >you manage to collect customers at a furious rate. Price it high, and you >can lower prices if you DON'T collect as many customers as you'd like. >Personally, I'd start at around $1000, I think. As people said, there are >costs you're not really considering, like perhaps the cost of hiring >additional manufacturing capability if lots of people decide they want the >product. This is a traditional pit-fall for startups, I understand. They >have swell cash flow, but not enough to speed up the buy/manufacture cycle >to grows the business. It happened to us. And venture capitalists get >rich >off of that sort of "mistake"... > >BillW > >-- >http://www.piclist.com#nomail Going offline? Don't AutoReply us! >email listserv@mitvma.mit.edu with SET PICList DIGEST in the body _________________________________________________________________ Add photos to your e-mail with MSN 8. Get 2 months FREE*. http://join.msn.com/?page=features/featuredemail -- http://www.piclist.com#nomail Going offline? Don't AutoReply us! email listserv@mitvma.mit.edu with SET PICList DIGEST in the body