Friday, May 2, 2008

Reader Comments

at 5/2/2008 2:28:21 PM, Steve H. said:
Good stuff - I like this kind of business. You probably won't get rich - but it is fun and satisfying!

at 5/2/2008 2:33:28 PM, Voice of Truth said:
Step 0: Most likely it's not worth all of your time. Getting someone to see your website is almost impossible unless you know someone with a heavily trafficked website that will promote you. You'll be lucky to get any magazine (even EDN) to give you a one-time blurb. Again, you have to know someone. You'll go to a lot of trouble, end up discouraged, and and will have spent a lot of time with no net profit. Sorry to be so blunt/negative, but that's by far the most likely scenario. The hard truth is like with most other business ventures, it will fail to produce expected results. Some people get lucky, though, so as long as you're willing to accept the fact that you are almost guaranteed not to succeed to the level you hoped for, then go for it. Really, think about this long and hard before you put a lot of time and money into it. It's just as easy as 15 steps.

at 5/2/2008 2:41:39 PM, Tom said:
I don't get your math. If your parts cost is $10.00 plus 40% for wholesale thats $14.00 plus 40% for retail thats $19.60. If you can't get the simple math right how good can your whole scheme be.

at 5/2/2008 2:52:55 PM, W17053 said:
You state to add 40% (twice) for pricing, but your numbers are closer to 65%, and your starting retail range is below your computed retail price.

at 5/2/2008 3:52:29 PM, D said:
It should have said that you need to make 40% profit (which is about 66% markup). $16.50-$10.00=$6.50 $6.50/$16.50= ~.4 = 40%

at 5/2/2008 9:30:57 PM, kartik said:
sound idea as idea, However if you are in bussiness in Asian market as specially in India this Bible is not avalid. Kartik shukla Engineering services Quality services Baroda-390015 India

at 5/3/2008 11:57:26 PM, Random Dude said:
Hi - I saw the speech too. It made sense, but was relatively general. I know people who do this and make enough money to support their habit (DIY, that is). I would encourage all engineers to become more familiar with the DIY community. Seeing these people do circuits with no formal training is inspirational, and makes me want to do something outside my comfort zone. If you are not learning more, you are in jeopardy of becoming obsolete.

at 5/12/2008 10:55:13 PM, DIYDad said:
This is more or less how I got started... It all started when I needed to find interesting content for my blog site to increase my web traffic (and therefore, increase my Adsense revenue to maybe $200-$300 a month) - as you can see, I had such a very small goal :) So I documented my process of designing my product from scratch on my blog. Took lots of photos, and basically blogged about what I'm currently working on. Pretty soon, I'm getting emails from people wanting to buy my PCBs, then if they can buy PCBs and parts, then they want to buy a PSU, then a case, then they want to buy other kinds of projects!... some even want me to build it for them, and sell them a completely finished, tested product... even at HUGE HUGE PROFIT Margins, they don't care. They want it. I'm approaching my 1st year anniversary now. I've sold A LOT of kits... and sales continue to increase every month. To the poster that said "it's now worth the time", I think that's a little harsh and too negative. If you do your homework, and really crunch the numbers and eat, breath, think, and see numbers... and you have a product that people want, and you know all the little costs here and there by heart, inside out... BEFORE you even sell to the 1st customer, you'll have a good chance of success. For me... there was very little fear that the new business will fail. My BIGGER fear was not launching it... because I know it will work! And I don't want to see some other schmuck do it, just because I was too chicken to do it myself. Yes, like any business there was some risks involved... but it was a very calculated risk. ... After the first 15 days of operation, I realized I was VERY WRONG with my calculations. I grossly UNDER-ESTIMATED my sales. I was pleasantly surprised that the first 15 days of operation generated more than $3K in sales! 10 months later, sales are between $6-7K a month. Gross margins of 50% to 70% (depending on which products). My average order is between $180-190 per customer. What happened to my Adsense? Yes, I have also achieved my monthly goal there. :) So, I say "Dream on, plan hard and work smart" to anybody that wants to get into this.

at 5/13/2008 1:16:33 PM, DIYWannaBe said:
Hey DIYDad! Didn't you read Step 10?!? What's your web site? You got me all excited, and now I want to see this great product that sells so well! Thanks

at 5/13/2008 2:00:57 PM, DIYDad said:
I read Step 10. In fact, I almost posted my website yesterday... but then, I''m thinking, "That would give away information on what I''m selling, and possibly invite copy-cats!" No, I DID NOT forget. I intentionally DID NOT post my URL. <grins> Why invite competition??? I just fulfilled an order from a single customer worth $295 just an hour ago. This month''s sale so far is $2K+, and it''s not even the 15th yet. And during paydays (15th & 30th) and for a couple of days after each payday, I get big spikes in orders. HERE''S A TIP that''s not included in the 15 steps: STEP 0 should be "Find a niche. Don''t go where everybody is going because it will be too crowded. Find a need and fulfill that need. It doesn''t have to be an exciting or gee-whiz-bang product. But it''s got to be a product that offers a solution to people''s problems, one that would make their work easier, improve the quality, save money, and have a high emotional fulfillment for the customer!..i.e. makes them feel good to have your product." GOOD LUCK!

at 5/13/2008 6:24:58 PM, Marcos said:
I liked the DIYdad comment's: Hi DIYDad, Can You teach me some business strategy. I have a plan to have my own electronic's shop but I dont know how !

at 5/14/2008 12:24:54 PM, DIYDad said:
Business strategy? Profit=Income-Expenses. Either increase your prices and increase sales, OR lower your parts cost, and lower overhead and expenses. That's it in a nutshell. <p>I'm just approaching 1 year in this kit retail business, but actually I've been working from home in my own consulting business for the last (8) years now. Quit my job from an electrical engineering company 8 years ago, and striked on my own... and it was the best thing I ever did! What I used to make in a year, now I make in 2 months. (and now the kit biz is bringing in addtl $6K/month sales). And no stupid bosses and office politics to deal with. I am the owner, CEO, engineer, secretary and also the janitor that clean the toilets :) <p>My advice is start small or just part-time, take calculated risks, plan every detail of your operation & WRITE EVERYTHING DOWN (which is equiv. to a Business Plan), before you jump in. Tweak and adjust business plan weekly or monthly. Treat it as a GUIDE... not as a MAP. Things change and will change. You need to be FLEXIBLE to adapt and take advantage of opportunities around you. <p> Don't be depressed about the gloom and doom economy news of today. Instead, think how can I use this to my advantage, survive or even grow during these slow times. HERE'S A TIP: While the US economy may be slow or down, NON-US customers are feeling rich and buying stuff! That's a TIP for you!

at 5/15/2008 10:44:28 PM, GordZ said:
Hi nice guidence I really like. This is what I was wondering I have done many hard projects & I never earn even a 50 cent. I think its now to start a business. I have made a design.parts + board cost = 2.5US$. At first time for what value do I have to sell? Thanks

at 5/16/2008 1:30:48 AM, DIYDad said:
I don't know what you're selling so I can't tell you how much to sell it. When you sell your kits, don't just take into account your parts cost, time and overhead. Give a monetary value also to the work, IP and R&D you put into it. Sell as much as your customers will pay. Also, don't be afraid to raise prices. It's better to raise prices a little bit at a time than one BIG price increase. I've probably raised prices 7x within the last 10 months, and my last price increase was 6%, and people are still buying. If you price your kits too cheap, people think your kit is cheap and crap and they'll not buy. Price it high, and the impression is it must be a high quality product. And people will come and want it... and buy it. (Of course, make your kits professionally made and packaged too... i.e. make it REALLY high quality.) Finding *new* customers takes some work. Selling to repeat customers is soooo easy. So make sure your kits are high quality so your customers will come back a 2nd, 3rd time, etc... or recommend you to their friends. Don't underestimate word of mouth referrals. They're more valuable and more effective than the slickest advertisement you can think of. BTW, my kit sales within the last 24 hours was $660+. And I'm also launching (2) new kits this weekend... so that's going to bring in a spike of new orders from customers waiting for it's launch. :) You don't need to be a Phd or a star-engineer to do this. Sometimes all you need is just common sense... and some guts.

at 5/16/2008 3:57:42 AM, GordZ said:
Hi nice ideas again,I'm going to use them right now. Actually I designed a running light system (LED).Here in my country there are so many LED freaks.So launching a new LED system to the market is very useful. The thing is I'm doing it with my friend.So the profit must divide by two. The kit contains with a micro & the PCB.All the other parts they have to buy separately & build it. For the PCB & micro it costs 2.5US$.SO it must sell at least to 5US$. so one will get 1US$ profit.I know 1US$ is very small but what to do?

at 5/16/2008 7:18:42 AM, DIYDad said:
Gordz, RE-READ the first part of my post again on pricing. Are you running a retail parts business or a kit business? Where's the premium on the R&D and knowledge and the programming that went into that microchip and project? How are you going to recover the cost of your prototypes? Splitting profits with a friend does not make your venture look attractive. One of you will work harder than the other, but profits are split evenly. This will just build resentment in the long run and possibly destroy your friendship. Why do you have to do this with a partner? Either hire him under you or do a work-for-hire contract with him. You're still at the starting gate, and you already lost 50% ownership (and future profits) of your future business.

at 6/2/2008 11:15:00 PM, DIYDad said:
Just to recap, my kit business made $7,500 this May. My previous record has been broken!... And the next 6 months will be even more exciting! Based on past trend, I can now see it's possible to reach $10K a month in sales by December 2008. So for all that gloom and doom recession talk here in the US, IGNORE THEM! Turn off that stupid CNN! Don't let that stop you from launching your own kit business. There is a big whole wide world of non-US customers to sell to!... and they're all feeling pretty rich out there, and wanting to buy US-made products.

at 6/3/2008 6:29:37 AM, kevin said:
If you are making electronics kits especially ones targeted at the ham radio market remember this - if you want to wind up with one million dollars the most important thing is to start out with two million dollars and don't stay in it too long! This is why Heathkit does not exist any longer - whatever kits you are going to offer are available pre made from Asia for less than your cost of offering them. If you have another job and your time is worth nothing - then it might pay for your hobby and justify it but why not just spend time with your family and enjoy other things in life?

at 6/4/2008 12:29:03 AM, GordZ said:
Hi currently I'm doing a small job (not electronics) I'm getting only 120 US$ per month. I don't like that job.So for part time I planned to do a small KIT business. As earlier said I must not not stop this KIT business.I'll make a lot of stuff(new projects) & put them in the market easy easy. I think the PCB is the headache do u all telling me to make the PCB from a PCB manufacture? It saves lots of Time & Effort.After made do you all put them in electronics stores by visiting them? or just put in the websites?

at 6/4/2008 9:39:34 AM, DIYDad said:
That's true, buying ready-made stuff is cheaper than building your own. But you're also forgetting that there are people out there that love to build stuff. That's your market. You're not after 10% market share... you're just after the kit builder/hobbyist market. Small group of folks where QUALITY counts and the pride of building it themselves is more important than cheap prices and low quality products from the far east. Anybody can do that... go to Walmart, plunk their credit card and buy cheap crap that breaks in a few months. If that's your idea of savings, then building kits is not for you. ..... Re PCB: Draw your schematic on your computer, design the PCB on the computer (I use Eagle), create Gerber files then have a prototype made by a PCB manufacturer, build and test, if all is OK, have 100-250pcs made, wait for boards, test again Round 2, package parts, sell. Start selling only on your website, so you can tweak your operations. ... as for spending time with family and enjoying life... my wife stayed at home since birth of daughter, I quit my day job and worked at home since daughter was 2. We both work at home (our desks across each other), daughter goes to exclusive private school, wife drives and picks her up daily, we go to equestrian events (daughter competes), before school and during vacations, we can stop anytime to play or eat out or go to movies anytime of the day.... I don't work 8 hours at some office downtown and drive home at the end of the day pooped out, to spend "quality time" with family. I believe more in QUANTITY TIME, because that's when quality time happens..... sorry for the pause.... Funny thing happened while I'm writing this, It's 10am, daughter just woke up, went to my office and cuddled up on my lap in her jammies... and we just talked about stuff for a good half-hour (she's 11 now)... See, QUALITY TIME just happened unexpectedly because I'm available. This wouldn't happen if I'm working 8 to 5 in downtown.

at 6/4/2008 11:07:11 PM, GordZ said:
Hi thanks for the wonderful answers.Ahhh yes I planned to buy the PCB from a PCB manufacture.For larger quantities they charge smaller value, quality of course fine (single sided).I cannot suddenly resign from the job because I have to stable for a little while with the KIT business.Then after I can vanish from that poor job.My dream is to be a good designer along with selling KITs to the market.:-)

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