Extremely Cheap Boards -- What Gives? - Page 1
Forum section: electronics / general

author: JohnSL
author_rank: Regular Contributor
timestamp: September 16, 2014, 05:12:46 am
content: I was having a conversation recently with some friends about RTC breakout boards for Arduinos. I mentioned that the price was in the $10-15 range. But one of them said, no, it's a lot less and provides this link to a board for $2.66:http://www.dx.com/p/tiny-rtc-real-time-clock-module-for-arduino-red-161172.They show a DS1307ZN (I think that's what it says) in the photo, and a LIR2032 rechargeable battery. How can the possibly sell it for that price? I did a calculation, and it seems like the BOM and assembly cost would be at least that amount. And then shipping is free to the US? Eh? How's that?Here is what I calculated for price:DS1307ZN: $1.52 in 10K quantityLIR2032: No longer made. But non-rechargable version is $0.15.Battery holder: $0.22 in quanity24C32 EEPROM: $0.13 in 10K quantityCircuit board: $0.10 in quanityTotal: $2.22. And that’s without assembly or shipping!

author: Psi
author_rank: Super Contributor
timestamp: September 16, 2014, 08:14:21 am
content: A lot of the really cheap china stuff is built from surplus stock which has been obtained free or heavily discounted or from "calling in favours"Buying used SMT reels which are almost empty are a good example of a potential cheap parts source.The reject bin from pick-n-place machines is also a potential source of components, they just need to be sorted and one thing china has is really cheap labour. Since China has such a huge manufacturing market the rejects/surplus market is quite large.Part sourcing can also get a bit more dodgy.There's a big recycling market, where useful ICs are removed from old PCBs, cleaned and resold cheap.And there's production run rejects. Where the chip isn't quite good enough to sell but still works. These rejects are often taken 'unofficially' and resold through more dodgy channels.Side story:You can get 5x 100W LEDS for $20 on aliexpress which is stupidly cheap, but if you test them you find most have bright spots, dead leds or unbalanced parallel strings. They're factory rejects but still normally ok if you run them at a lower current. And, when i ordered the 5 i was actually sent 10that' s another clue that the seller is expecting high failure rates so is giving extra.Also, there is a big difference between the price you might pay at digikey or from the manufacture vs what it actually costs to make the chip in the factory. China culture is quite different to western. There's a lot of negotiating on price and favours between people. eg, You might have a friend who works in a semiconductor factory and maybe able to buy low quantity stuff at cost, or close to it. In return you might help the friend with some other deal or something.

author: coppice
author_rank: Super Contributor
timestamp: September 16, 2014, 09:32:32 am
content: Quote from: JohnSL on September 16, 2014, 05:12:46 amYou would pay $1.52 for a simple RTC chip, yet beat the poor PCB maker down to $0.10? Why are you so nice to Maxim and so mean to PCB makers?You missed $0.04 for the crystal.

author: hamster_nz
author_rank: Super Contributor
timestamp: September 16, 2014, 10:08:59 am
content: DS1307ZN $1.52? Ripped off!Athttp://www.seeedstudio.com/depot/OPLopen-parts-library-catalog-c-136_138/- you can get 10 for $6.50!

author: JohnSL
author_rank: Regular Contributor
timestamp: September 16, 2014, 02:15:34 pm
content: Quote from: hamster_nz on September 16, 2014, 10:08:59 amI ignored their price because there were a number of suppliers at around $1.50 for reels, so Seeed's price looked like an aberration that was something I wanted to understand. I neglected to mention this in my question.Also, coppice mentioned that $0.10 for the blank PCB is way low. I just guessed on that--what would be a more realistic price?Thanks Psi for the fascinating reply. That explains a lot.

author: ruffy91
author_rank: Regular Contributor
timestamp: September 16, 2014, 06:52:08 pm
content: Everyone could get 10000 pieces for 0.10$ with 8 days lead time (pcbcart). I think local chinese people could even get them for 0.05$.

author: tszaboo
author_rank: Super Contributor
timestamp: September 17, 2014, 10:53:17 am
content: You assumed digikey pricing, which is not the Chinese price. Not so long ago I've asked quotation for a 34063 clone (digikey is USD 0.13) the chinese price was USD 0.041 if you buy a reel. Expect about the same price for all component.And dont be suprised about shipping. Shipping costs nil in china.

author: amyk
author_rank: Super Contributor
timestamp: September 17, 2014, 12:31:54 pm
content: You can buy an Arduino clone for around the same price...https://www.eevblog.com/forum/projects/how-come-this-board-is-so-cheap/Prices of ICs seem to decrease superlinearly with increasing quantity. For something like an RTC, the die is tiny and the circuitry is simple so any NRE would've long been recovered, and the only cost is the cost of materials and production.

author: Rasz
author_rank: Super Contributor
timestamp: September 17, 2014, 01:28:31 pm
content: you quoted gweilo prices

author: LabSpokane
author_rank: Super Contributor
timestamp: September 25, 2014, 04:06:24 am
content: Don't forget rebates. A big contributor to margins is the rebate that the manufacturers and disty kick back to the CM. Published pricing is solely for small time players.

author: rdl
author_rank: Super Contributor
timestamp: September 26, 2014, 07:48:31 pm
content: Quote from: JohnSL on September 16, 2014, 05:12:46 amWhat? You don't have Chinese mail men running around in your neighborhood either?Costs me $2 just to mail a little package cross country.

author: marshallh
author_rank: Unknown
timestamp: September 26, 2014, 10:45:05 pm
content: Shipping exports is government subsidized in china.

author: retrolefty
author_rank: Super Contributor
timestamp: September 26, 2014, 10:59:50 pm
content: Quote from: marshallh on September 26, 2014, 10:45:05 pmUndoubtedly and importing countries are obligated to perform/complete local delivery of such international shipments. I've ordered 50 cent item once from a Asian E-bay seller that offered such 'free delivery'. It arrived in about 10 days via Air Mail and delivered by my local US postal. So yea Chinese exporters are diffidently getting some kind of subsidy, as selling a 50 cent item with free delivery half way around the world doesn't otherwise compute.

author: mazurov
author_rank: Frequent Contributor
timestamp: September 27, 2014, 01:13:12 am
content: The counties have agreements about mail exchange. You pay at the post office in the US to send a package to China. It is very simple to subsidize shipping stuff out of the country since it is not tied to shipping into the country - you get a mailbag from US say and deliver the contents to recipients in China. US takes your mailbag and delivers the contents to recipients in the US. No money is exchanged between US and China for this operation.Shipping anything while paying in the US is pretty expensive, USPS or not. To send a small package to EU via DHL (2-3 days) is a hundred bucks if you pay here, and $30 if you pay there. If I buy parts in China and ship with my Fedex account it's $120. If I ask them charge shipping it's $20. Direction won't matter either. When I buy a single part directly from Microchip I pay $10 shipping and get a 2-day Fedex package from Thailand. What bothers me is that Fedex to Asia is still expensive even though their planes are flying east empty.

author: mux
author_rank: Regular Contributor
timestamp: October 29, 2014, 03:14:44 pm
content: So, @pricing: You can get genuine maxim parts for less than a dollar. As a rule of thumb, take official 1k budgetary pricing:http://www.maximintegrated.com/en/products/digital/real-time-clocks/DS1307.html/tb_tab1($1.35/1k)and deduct 40%. That's your rock bottom price direct from the factory. So roughly $0.80-0.85 in large (10-100ku) quantities, reeled and with pretty much all the discounts you can get.In the same way, distributors will aim at about 40% gross margin on their part. So you'll always pay at least 40% above budgetary pricing for small quantities, sometimes much more for singles just because it's such a hassle. Of course, this price gets you smaller quantities than full reels or boxes.