Taking prototypes to market. - Page 1
Forum section: electronics / general

author: EEEnthusiast
author_rank: Frequent Contributor
timestamp: September 16, 2019, 04:58:14 am
content: Friends,Does anyone know of companies which can take prototype designs to full production and sales?The model is as belowWe provide them with all information like the bill of materials, gerbers, assembly instructions, mechanical enclosures, user manuals, software , test instructions etc. (All that is required to manufacture and sell a product). We also demonstrate a working prototype which can be easily taken to production. The product is already certified for FCC/CE and other relevant certifications as applicable for the class of product and target market.They take it to volume production, handle marketing and sales, and handle all the logistics like customer returns, warranty etc. And they work on a royalty or revenue share model.This way the engineers can focus on solving engineering problems and still have enough time for leisure. I'm running a small company and the manufacturing/sales logistics takes up bulk of my time, which is energy draining and repetitive tasks.Thanks.

author: mrpackethead
author_rank: Super Contributor
timestamp: September 16, 2019, 06:10:50 am
content: Plenty. Expect that you will get around 10% of the profit share though. There is no free lunch.Quote from: EEEnthusiast on September 16, 2019, 04:58:14 am

author: EEEnthusiast
author_rank: Frequent Contributor
timestamp: September 16, 2019, 06:14:40 am
content: With 10% I would rather slog myself.

author: EEEnthusiast
author_rank: Frequent Contributor
timestamp: September 16, 2019, 06:24:40 am
content: If there is no company of this kind, then it may be worthwhile to start one. May be some one with a manufacturing plant with enough employees, can start a new marketing division. All they need is to do market research to check if the new product can sell. It is not very high investment, as they can test the markets with small volumes initially. They can charge the prototype owner for the initial production build to minimize the losses. Then a 50-50 share on the profits would be a good deal in my opinion.

author: Jeroen3
author_rank: Super Contributor
timestamp: September 16, 2019, 07:35:37 am
content: There are companies you can sell your product idea to. They will then own it and you can negotiate some share in the profits. Less profits for you if they may not own it.If you are not comfortable with that, then you're into entrepreneurship and you can use services from:- turn-key product manufacturing- marketing firm- warehousing/logistics partnersYou don't have to do all yourself. Except above is expensive, so during startup you must do it yourself.

author: mrpackethead
author_rank: Super Contributor
timestamp: September 16, 2019, 08:33:42 am
content: Whats the product?

author: EEEnthusiast
author_rank: Frequent Contributor
timestamp: September 16, 2019, 09:02:26 am
content: The product is an IOT Power Profiler tool : ZS-2102-ADetails available atwww.anglercircuits.com

author: sokoloff
author_rank: Super Contributor
timestamp: September 16, 2019, 10:44:49 am
content: Quote from: mrpackethead on September 16, 2019, 06:10:50 amThey are, after all, doing around 90% of the work. Distribution alone can easily represent more than 50% of the total markup accruing to the distribution channels vs. the original manufacturer.Nifty product by the way.

author: EEEnthusiast
author_rank: Frequent Contributor
timestamp: September 16, 2019, 10:57:16 am
content: I got leads on one company in the USA which does the sourcing of components, assembly, test , packaging and order fulfillment.They will not undertake marketing and sales. If all goes well, I would recommend them in the forum. Will keep you guys posted on the progress.

author: Mr. Scram
author_rank: Super Contributor
timestamp: September 16, 2019, 11:30:39 am
content: Consider taking that banner that pops up after a few seconds off your website. The world already decided that pop-up ads are a bad thing years ago and somehow some websites are making the same mistake all over again.

author: EEEnthusiast
author_rank: Frequent Contributor
timestamp: September 16, 2019, 11:58:34 am
content: Quote from: Mr. Scram on September 16, 2019, 11:30:39 amGot that off... Thanks for the feedback.

author: Kean
author_rank: Unknown
timestamp: September 16, 2019, 12:33:11 pm
content: I've done this kind of project outsourcing with Seeed Studios in the past. As mentioned they take about 90% of the revenue.Your best bet for such a unique product is to deal with manufacture and then sell it yourself (e.g. on your website, Crowd Supply, Tindie, etc). Otherwise find a small-medium company in a similar industry (i.e. test equipment) and work with them. They don't have to go through all the R&D effort, and would already have manufacturing and sales processes in place.Edit: I should mention that the design was already open-sourced by me, so Seeed could have manufactured and sold it without paying me royalties. It was done as part of their Wish program (top voted project), which doesn't seem to exist any more. They do still do manufacturing and third party sales, e.g. RF Explorer

author: EEVblog
author_rank: Unknown
timestamp: September 16, 2019, 01:34:39 pm
content: May be of some interest:

author: SeoulBigChris
author_rank: Regular Contributor
timestamp: September 16, 2019, 09:40:06 pm
content: Another aspect here is risk. One of the risky portions of development is already complete, the development phase, that is, your engineering design, prototyping, agency certification, etc. The future manufacturer of your product has a reasonably low risk, assuming he has properly checked your credit and references, and delivery and final payment are linked in your contract. The various warehousing and order fulfillment services, too, are not terribly risky, and they also will typically hold your inventory. But the remaining risk is marketing and sales. One might have a great product, well manufactured, with full warehouses ready to ship. But if the marketing is wrong, or the timing is wrong, etc, it might not succeed in the marketplace. Asking someone to take on marketing and sales of a product is a big deal, and I'm not surprised the few companies that do this demand a very large percentage of the profit.As engineers, we tend to focus on the importance of the design, manufacturing, etc. And I know that in the past, I have looked down on the sales side as inferior and just a nuisance. But working on several consumer and industrial projects has given me a newfound, albeit begrudging, respect for those folks. I told myself, their world is completely different from mine, and at times I almost loathe them, but they bring a needed skillset to the table and are necessary cog in the machinery of a successful product.By the way, one phase that might need some additional work is adapting the manufacturing process you developed, presumably without any specific manufacturer's input. Depending on the complexity of your assembly and testing, there will be some additional tailoring of your procedures and test equipment to the selected manufacturer(s). This isn't usually risky, but it can take some additional effort.I've been through what you're facing, and even dabbled with the marketing and sales, and can appreciate the issues you're facing. Best of luck to you.

author: Mechatrommer
author_rank: Super Contributor
timestamp: September 16, 2019, 10:03:17 pm
content: Quote from: sokoloff on September 16, 2019, 10:44:49 amnot mentioned is the risk of not getting enough sale? for whatever reason. whose money was used? this should cater more insurance in the form of profit share percentage.Quote from: EEEnthusiast on September 16, 2019, 06:14:40 amyou bet. one can have brilliant idea, but zero risk, so 10% share is reasonable imho. designing and prototyping is engineers (workers) work, and at what percentage the engineers get (salary)? 50-50? if i'm the company, 50-50 is not a deal.i've been meditating quite hard on this on and off for so long. entrepreneurship? you need to work it, poor money in it and face the risk. maybe the lesser work and risk is if you pay for google ads (marketing), but production cost and risk is still yours, unless you join Kickstarter. since your device is not everyday consumer product, more like niche measurement device for another designers/R&D, you may also want to search your target costumers/companies/firms in your area. or if you are in china, like someone who once asked adviced from here about his pc dso, get the china online resellers to get your product sale all over (and i'm not sure how profit sharing or risk management works over there).

author: EEEnthusiast
author_rank: Frequent Contributor
timestamp: September 17, 2019, 02:27:25 am
content: Thanks to everyone for the valuable inputs,Now I tend to agree that the sales and marketing , even though not every engineer's cup of tea, is indeed an important part of running a company. As I stated earlier, I have found a vendor in the USA who can do everything in production and order fulfillment. So that leaves only the sales and marketing to the engineer (me) which is still manageable. At least I need not worry about the inventory, ordering parts, shipping them and tracking the orders. So I think this is still a good model to work out to maximize the profits.

author: mrpackethead
author_rank: Super Contributor
timestamp: September 17, 2019, 06:18:37 am
content: I looked at your product, and its well, way more than i'd pay for it. Simply because the same functionality is avaialble on the $99 IOT dev boards that i use already. The extremely low current measurement etc is all there, and i can easily connect it to the tools that.I'd be unsure about the size and scope of your market. Maybe you should try crowdsupply...

author: Fire Doger
author_rank: Regular Contributor
timestamp: September 17, 2019, 06:29:09 am
content: Quote from: mrpackethead on September 17, 2019, 06:18:37 amWhich boards do you use?

author: mrpackethead
author_rank: Super Contributor
timestamp: September 17, 2019, 06:34:55 am
content: example would behttps://www.microchip.com/DevelopmentTools/ProductDetails/dm320111

author: AndyC_772
author_rank: Super Contributor
timestamp: September 17, 2019, 07:51:26 am
content: Quote from: SeoulBigChris on September 16, 2019, 09:40:06 pmI disagree. Suppose someone approaches you with a prototype, and asks you to put it into production.How do you know that there's a market for the product at a price which makes it economically worthwhile?How do you know there's any market for this productat all?Is the prototype reliable? Easy to use? Correctly pitched in terms of features / quality / complexity / price for its target customer?Has it really been production engineered so it can be mass produced easily?Do you have the right industry contacts to effectively promote, market and exploit the product?What if it generates a lot of support enquiries? Or warranty returns?What will you do if a component goes EoL shortly after the design is in production?These are all things which are outside of your control, if you were to just take a design that's handed to you by someone else with a request to "make and sell this".Now imagine you're the owner of a company, andyoudecide the specification for a new product. Instead of making and selling someone else's idea, you instead hire an engineer to design something specifically for you.This puts you in control of some of those variables. You already know your own market, what it needs, where there are gaps (and where there aren't), and what kind of product might fill them. You can specify the design exactly, and have a much better chance of creating a product which you can sell.You're still responsible for the ongoing costs and support, which is why it's a good idea to build up a relationship with an engineer you can rely on. As with the spec for the product, the design engineer you work with should be your choice.

author: AndyC_772
author_rank: Super Contributor
timestamp: September 17, 2019, 07:54:37 am
content: Quote from: EEEnthusiast on September 16, 2019, 10:57:16 amThese functions aren't at all unusual; most contract manufacturers will do a full turnkey, drop ship service if you ask.

author: Mangozac
author_rank: Frequent Contributor
timestamp: September 17, 2019, 10:58:31 am
content: Quote from: EEEnthusiast on September 17, 2019, 02:27:25 amSurely there are a plethora of Contract Manufacturers in your indicated country of India who could do this at a better cost and without the international shipping?

author: sokoloff
author_rank: Super Contributor
timestamp: September 17, 2019, 11:26:14 am
content: If he believes the majority of his market is inside India, that makes sense. If the majority of the market is in the US...

author: Mangozac
author_rank: Frequent Contributor
timestamp: September 17, 2019, 12:00:31 pm
content: Quote from: sokoloff on September 17, 2019, 11:26:14 amIf he believes the majority of his market is outside the US it makes sense too. And depending on the assembly and warehousing prices quoted it still may make sense for the US - and this is even before considering the benefits of working with a company in the same time zone. As with any business decision due diligence should consider all of these things.

author: Fire Doger
author_rank: Regular Contributor
timestamp: September 17, 2019, 12:06:27 pm
content: Quote from: mrpackethead on September 17, 2019, 06:34:55 amThank you for your info.After a little research I found something dedicated from SThttps://www.st.com/en/evaluation-tools/x-nucleo-lpm01a.htmlAny users?

author: KL27x
author_rank: Super Contributor
timestamp: September 18, 2019, 12:19:56 am
content: QuoteYeah, and this leaves 10% ofprofitto be very little.Sell it on Amazon? Small seller can easily pay more than 50% of the gross to Amazon by the time the fees roll in.Internet and social media marketing/advertising? Sure, they just want 25-30% of your gross for sales they get referred to your site. Hopefully, you have created your own webstore what doesn't take 25-50% at the POS.This is why marketers and distributors (and shows like Sharktank) like to get you hyped about gross sales. That number looks way, wayyyy better than net profit.QuoteThere was a site called GadgetGangster that did exactly this. They sold your design as kit and/or finished product. They bought all the stuff. Carried all the inventory. Did the manufacturing. They (hopefully) cut you the check for your share every somesuch time period. It was a bit like Sparkfun or Adafruit, but with more Propeller less Arduino. I think the owner was into Propeller, himself, and probably a lot of those were his own designs.I am pretty sure they went out of business. But if you think it's a good idea, have at it. Even one or two gadgets is a giant handful of work. Don't forget the testing, the failure/repairs and service/support.

author: EEEnthusiast
author_rank: Frequent Contributor
timestamp: September 18, 2019, 04:55:43 am
content: Quote from: mrpackethead on September 17, 2019, 06:18:37 amThe IOT dev boards cannot measure short spikes of current, say 10 us wide. This is where the tool is different. It has wide dynamic range and bandwidth at the same time. For e.g. it can measure some current spike which can change from 10uA to 100mA in 2us and lasts for 10uS. Other tools will just filter this out.

author: EEEnthusiast
author_rank: Frequent Contributor
timestamp: September 18, 2019, 05:01:11 am
content: Quote from: Mangozac on September 17, 2019, 10:58:31 amYes there are many contract manufacturers in India who can do this well. The current process is for me to buy the components and pass them over to the assembly house. The components are a major cost and there is almost 20% tariff when I import them. Then there is extra cost when I ship the finished products outside of India. (shipping + logistics)Making in the USA will save on the 20% tariff and the high overseas shipping cost. In my calculations, the extra labour cost in USA, is still lesser than the tariff + shipping . Not to mention the long transit time of 5 to 8 days in shipping international.But most of my customers are located in the USA and EU/UK. Shipping from the USA is faster and cheaper and boosts customer confidence.

author: EEEnthusiast
author_rank: Frequent Contributor
timestamp: September 18, 2019, 05:04:17 am
content: Quote from: Fire Doger on September 17, 2019, 12:06:27 pmLooks interesting, but there is no mention about the accuracy of the measurements. Is there a datasheet for this?

author: mrpackethead
author_rank: Super Contributor
timestamp: September 18, 2019, 06:17:30 am
content: They have a ada4528-1 in the front end and AD8656 which buffers and provides a LPF. Accuracy is a question of your total system, i plug mine into a 10 bit scope. Its more than accurate enough for me to model ultra low IOT devices.. And since i'm able to control and model all my testing ( and control my scope and collect automatic measurements its working pretty well for me. Yeah, sure the overall system is a lot more expensive than your box.. $12,000 Scope.... But it gets used for a lot more than just this job.https://www.analog.com/en/products/ada4528-1.html

author: Mangozac
author_rank: Frequent Contributor
timestamp: September 18, 2019, 06:42:48 am
content: Quote from: EEEnthusiast on September 18, 2019, 05:01:11 amIf the components are made in China then there is currently a 25% tariff in the US!Seriously though, it sounds like you've done an appropriate amount of homework regarding the manufacturing location

author: Mechatrommer
author_rank: Super Contributor
timestamp: September 18, 2019, 07:01:38 am
content: or just make a uA sensitive current probe for DSO, all acquisitions are in the DSO, only need to build shunt and filter or whatever front end to measure the current. hence 100MHz bandwidth 1GSps @ $400 or cheaper, not just for IOT but for everything.

author: mrpackethead
author_rank: Super Contributor
timestamp: September 18, 2019, 07:10:46 am
content: Quote from: Mechatrommer on September 18, 2019, 07:01:38 amIndeed. my fear for the OP, is that the perceived market size for the product might be a lot smaller than expected. Its highly niche.

author: AndyC_772
author_rank: Super Contributor
timestamp: September 18, 2019, 08:39:31 am
content: Indeed, and that's why the industry really doesn't work that way round.If you have a product which is demonstrably capable of generating revenue, then of course it can be sold off. You'll need proof of its turnover, costs and net profit in order to make a case for why someone should consider buying it from you.If you don't have that commercial evidence, the sales pitch becomes much, much harder. You'd need to find a potential buyer who is able to understand what's special and unique about your product, and who can predict for themselves what the likely revenue would be. Without concrete proof that it's nonzero, you're fighting a losing battle unless you have some product or technology that's obviously game-changing.

author: Fire Doger
author_rank: Regular Contributor
timestamp: September 18, 2019, 08:56:42 am
content: Quote from: AndyC_772 on September 18, 2019, 08:39:31 amIt's a test and measurement instrument. If someone needs to make a measurement he knows what tools he need. I don't think that engineers are buying tools the same way the rest of world buys stuff...For example, how a very short pulse which is undetectable by other cheaper solution will effect my revenue? It's better to have it, to expensive if you don't need it. If my usage is so niche to be a must have feature and "close enough" is not enough then probably I can afford a real power analyser. My opinion is that its above hobby level and bellow industrial.I would like to have but I won't buy it. Also Dave mentioned something similar in in his uSupply and it may kill this.

author: EEEnthusiast
author_rank: Frequent Contributor
timestamp: September 18, 2019, 10:16:49 am
content: Yes, the product is niche, but there are other products with similar function like the Otii Arc and the JS110. With the number of IOT developers increasing, and battery life of the products being an important factor, there is a small but significant percentage of the developers interested in such a measurement system. For e.g. a firmware engineer or application software engineer would want to know the impact of his code on the overall power consumption and power profile. They are better off with a dedicated equipment than using a shunt and oscilloscope. Will see how the sales go!!!

author: Mechatrommer
author_rank: Super Contributor
timestamp: September 18, 2019, 10:37:27 am
content: dso usually the first thing on the table, just add a little weight on current probe in the drawer, with pc dependent device, they will need a PC next to them probably contaminating harmonics or EMC which is one good reason i think for such pluses measurements. how few pluses will affect battery life significantly? negative pluses will charge back the battery anyway, no? not a critics, just food for thought when your customers ask, cheers.

author: OwO
author_rank: Super Contributor
timestamp: September 18, 2019, 12:53:54 pm
content: I think the price is a little on the high side; I would say around the $100 mark is where you will get a big increase in sales.

author: EEEnthusiast
author_rank: Frequent Contributor
timestamp: September 18, 2019, 03:46:13 pm
content: Quote from: OwO on September 18, 2019, 12:53:54 pmThe BOM cost itself is much higher than $100 at the current volumes. Precision analog components are not cheap and that is the most of the cost. Then there is cost of software development, product testing and qualifications. My be few quarters down, the price can fall due to high volume. I have looked at other competition and they are at similar price range. So at the current moment, there is little room to play.

author: EEEnthusiast
author_rank: Frequent Contributor
timestamp: September 18, 2019, 03:47:29 pm
content: Quote from: Mechatrommer on September 18, 2019, 10:37:27 amIn case of devices like WiFi, most of the current is in the form of pulses of few 10s of micro seconds wide. This consumes most of the energy from the battery.

author: coppice
author_rank: Super Contributor
timestamp: September 18, 2019, 04:00:32 pm
content: Quote from: mrpackethead on September 18, 2019, 07:10:46 amWhen I was working in ULP applications this is the device EVERYONE wanted, and the market for ULP applications is no longer small.

author: ebastler
author_rank: Super Contributor
timestamp: September 18, 2019, 06:03:36 pm
content: Quote from: EEEnthusiast on September 16, 2019, 04:58:14 amI don't think this is likely to work. For the company to be effective at marketing and sales, your product has to fit into their portfolio. They can't be "agnostic" about it and take on board any product that comes their way. (That's the big difference to a contract manufacturer.)And if they are indeed active in the right market segment, and already have other products which will complement yours -- what is the likelihood that your product will excatly fill a gap they perceive in their portfolio? And won't they expect their products to have a common look & feel, which your design of course doesn't share?For a specific product you have developed or have in mind, you may be able to identify a company in that space which might happen to like your product and take it on board. Better talk to thembeforeyou have fully finalized your design, so you can consider their input. But a "generic" company, with the business model "We will make and market your product, whatever it is"? I don't think so...

author: spongle
author_rank: Regular Contributor
timestamp: September 18, 2019, 07:29:23 pm
content: Quote from: ebastler on September 18, 2019, 06:03:36 pmSomething of that sort existed. But big surprise, it failed:https://www.inc.com/christine-lagorio/what-happened-to-quirky.html