Many things 'reuse' dies - for instance the case can likely be had from someone who did a big run for a more expensive product, and is now selling the cases to local manufacturers in bulk at just above the cost of the raw materials. Many cheap products don't contain the 'extra' caps and other parts which reduce RF/EMI/etc generation or susceptibility, and thus may only contain the SD connector, USB connector, and chip. These parts can indeed be very very cheap - when a big name orders a few million of one part, the manufacturer will likely continue the run for a few hundred k more (for various reasons) and then sell off the remainder to get a little extra profit for not much more work. These overages are calculated into the initial quote (gives time to detect a bad setup/run, and extra parts in case some test badly, etc) so it's better to use up all the remaining raw materials, and if the parts aren't needed to finish the big order, they are sold as partial lots elsewhere. Labor isn't that much in Asia, even hand assembling and testing SMD devices can be had for 4 cents per part/assembly step and cheaper. If there are idle pick and place machines then an array of these can be done for a few cents per reader. Still, it's more likely that these are due to overstock (ie, they sold 90% of them at $5 with $1 profit each, and can afford to sell the remainder below cost - at the end of the day it doesn't matter how much profit each unit generated vs how much each unit cost, it's how much profit the entire lot generated vs how much the entire lot cost. Due to manufacturing scales it can be cheaper to make 320k units than 300k, and even though you can only sell 300k at the desired profit point, you will make more money selling 300k normally, and offloading the 'extra' 20k below cost to some reseller. -Adam On Fri, Sep 18, 2009 at 12:05 PM, Sean Breheny wrote: > Hmm. Regardless of legality, I just plain do not understand how you > can manufacture a USB SD card reader for US $1.03 and make any profit. > It must contain at least a USB connector, PCB, interface IC, SD > socket, and a few caps and resistors, as well as a plastic case which > is probably injection molded. If the total markup is 50% including all > middlemen, that means $0.50 for the parts and assembly. If the > assembly cost is half of this, there is only $0.25 left for the parts. > Assuming that the cost is evenly divided among the USB connector, PCB, > IC, and SD socket, that is 6 cents each! Also, even in China, an > injection mold tool for a little case like this is probably $5k USD. > If you can allocate 5 cents per unit for the plastic parts, and 2 > cents of that is the cost of the actual plastic and labor/machine time > involved in shooting the parts, then that's only 3 cents for the > amortized cost of the tool. That's 170 thousand units just to break > even on this element. > > Sean > > > On Fri, Sep 18, 2009 at 11:04 AM, Spehro Pefhany wro= te: >> At 09:54 AM 18/09/2009, you wrote: >>>Does anyone know how this place makes any profit?! For example, they >>>are selling a USB-bluetooth adaptor for US $2.46. Also, a USB SD card >>>reader for $1.03. Looking over their prices on more substantial items, >>>I think those are more in line with typical prices, so I would guess >>>that they make all their money from the items which cost more than $10 >>>and the rest are loss leaders. It just seems to me that people are >>>much more likely to buy lots of the trinkets from a place like this >>>rather than trust them when buying a $100 digital camera. >>> >>>Sean >> >> Their prices are not out of line with "street" mainland Chinese prices p= lus >> postage, (postage in padded bags is cheap from HK) but you have to keep = in >> mind that you =A0will be getting Chinese retail quality and things like = MP3 >> players and Bluetooth sticks may well not have officially licensed >> firmware/software. Such items could theoretically be seized by customs d= ue to >> patent or copyright infringement. >> >> In general, small stuff sold in the developed countries has an enormous >> markup, whereas bigger things can often be found for about the same price >> (maybe less) in developed countries, in my experience. Where there is a >> bigger difference, there is often a justifiable difference in the offer. >> >>>Best regards, >> >> Spehro Pefhany --"it's the network..." =A0 =A0 =A0 =A0 =A0 =A0"The Journ= ey is the reward" >> speff@interlog.com =A0 =A0 =A0 =A0 =A0 =A0 Info for manufacturers: http:= //www.trexon.com >> Embedded software/hardware/analog =A0Info for designers: =A0http://www.s= peff.com >> >> >> >> -- >> http://www.piclist.com PIC/SX FAQ & list archive >> View/change your membership options at >> http://mailman.mit.edu/mailman/listinfo/piclist >> > > -- > http://www.piclist.com PIC/SX FAQ & list archive > View/change your membership options at > http://mailman.mit.edu/mailman/listinfo/piclist > -- = http://www.piclist.com PIC/SX FAQ & list archive View/change your membership options at http://mailman.mit.edu/mailman/listinfo/piclist