Custom case designs... (the business perspective)

[Tim Newsom]

On Tue, 3 Jul 2007 12:56, Matthew S. Hamrick wrote:
> Also.. to follow up on what Adrian recently said.. The tech shop also  
> has a CNC milling machine. I'm no expert, but I believe that the idea  
> is that you put a CAD file in one side and take out a completed part  
> out the other. So... if you have the CAD files for a case, you could  
> feed them into the CNC milling machine instead of the 3D printer and  
> viola! aluminum case.
>
> Jim Newton at the TechShop also mentioned he's looking into getting  an 
> injection molding machine. I've seen a couple of these sorta 1  shot 
> injection molders. You use the CNC machine to create your mold,  then 
> you pour plastic pellets in the top, press a button and an  electric 
> motor turns the screw that forces the semi-molten pellets  into the 
> mold. So.. you could have any number of different cases made  for your 
> Neo.
>
> My "back of the envelope" calculations for the cost are:
>
> Fixed Costs:
> 	Mold Design Time	5h		$0
> 	Mold Milling Time	3h		$75
>
> Variable Costs: (per production run)
> 	Mold setup			1h		$10
>
> Variable Costs: (per case)
> 	Plastic Pellets		(1/10)h	$3
>
> So assuming a CAD file for the NEO case were to magically fall out of  
> the sky, perhaps as part of a program to seed a third party ecosystem  
> (*hint*hint* Sean, are you going to be in the bay area soon?  
> *wink*wink*) The cost per case for a production run of 10 and 100  
> identical cases would be:
>
> 10 cases: 9h, $115
> 100 cases: 18h, $385
>
> Let's say that I'm terribly impressed with myself and I want to pay  
> myself $65 / hr. for my time, the price goes up to:
>
> 10 cases: $700
> 100 cases: $1555
>
> But I'm not going to sell them myself. I'd rather sell them through  
> SparkFun or even GumStix.com (but I don't know if either of these  guys 
> would be interested.) So, I'm going to add a little bit of  margin. 
> This is a risky business, so I'm adding 35%.
>
> 10 cases: $945
> 100 cases: $2100
>
> Nathan and/or Gordon are going to want a margin as well, but I'm  
> thinking I'm going to offer them a low-risk proposition: "just put  the 
> SKU on your website and I'll handle the fulfillment." So I'm  going to 
> argue them down to 7% margin. So in other words, I'm going  to pay them 
> a commission for every case they sell. That fee would be:
>
> 10 cases: $65
> 100 cases: $147
>
> We're not talking about a lot of coin, here. From a business  
> perspective, the reward of $147 for selling 100 isn't that great.  It's 
> probably not going to pay for Nathan or Gordon's time to setup  the SKU 
> in their system. But there's always eBay...
>
> Let's say sales taxes are an additional 8.5%:
> 10 cases: $86
> 100 cases: $191
>
> Shipping and handling:
> 10 cases: $90
> 100 cases: $900
>
> End Price:
> 10 cases: $1186 ( $118.60 per case )
> 100 cases: $3338 ( $33.38 per case )
>
> So... the question is...
> 	a) is it possible to convince Nathan or Gordon to sell these things  
> through their websites for $65 - $147?
> 	b) is there actually a demand for 10 or 100 of these after-market  
> cases?
> 	c) is there a "one size fits all" design that will satisfy everyone  
> who wants an after-market case?
>
> So, I'm not saying I want to get into the business of making after- 
> market Neo cases, but someone who was thinking about getting into  this 
> market would do an analysis just like this. So... if there was a  solid 
> demand for 100 cases, it's possible the price could be brought  down to 
> about $35-$40.
>

This is definitely an interesting analysis of a set of costs associated 
with this kind of business.

I think the costs could be a bit cheaper for the end user depending on 
material and costs to build the molds.   But then again, I have not 
actually sat down and worked it out yet. /grin

I do think there is a market here though..
--Tim