MAKE magazine noticed my tweet about our business model: "Business model for my open source robotics startup: disclose the cost of everything and charge 40% markup. Want it cheaper? DIY!"

What that means is that BlimpDuino, the first product we'll be launching ourselves (rather than through a commerical manufacturing/retail partner), will follow that model. I'll disclose the cost of every part and step of the manufacturing process, linking to sources wherever possible so you can do it yourself if desired.

So in this case, the cost of the BlimpDuino kit parts and manufacturing are about $70. 40% margin is $28, so we'd charge $98.

Let's say you want it cheaper. Although we get volume discounts on most of those parts, I provide links so you can buy single items for not much more, and avoid our 40% markup (you will be paying shipping and taxes with those retailers, so your savings will be less). The automated SMD soldering can't be done as a one-off, so you'd have to do that yourself (not hard if you've got a bit of SMD experience), saving more money. And perhaps you already have some of the needed parts. Great, more cost savings for you!

Let's say you want to make your own company and compete with us, charging just a 30% markup, or maybe just 20%. Excellent! All of our source code and PCB/schematic files are open source and licensed to allow commerical use. If you can make it cheaper or better than us, go for it! The more the merrier. The only requirement of the license is that you credit us for the design and link back here.

Let's say you're rich and just want to make them and sell them for cost, with no profit margin at all. Also excellent! More robotics blimps for all! The market grows!

Our bet is most of you will be happy to pay us 40% for the security and convenience of making and testing the kit for you. Some of you will want to do it yourself, and that's terrific (we are DIY Drones, after all). And, frankly, I'd be delighted if some Chinese company decides to make BlimpDuino and sell it at half our cost, paying us nothing. We don't want to have to make the hardware if we don't have to (no dreams of being a factory manager here), and if someone can undercut us by that amount with the same or better quality, we will happily move on to designing other things where we can add more value. Everyone wins!

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Comment by Venom57 on January 1, 2009 at 2:16pm
I wish I still had my solder bath. Makes that SMD stuff really easy. Having a tub of hot solder lying around kind of sucks though. Everyone always dips stuff into it, like pencils. I never got that, especially when solder wasn't ROHS compliant.

I think given the quantities that you'll be seeing, the "market" for this product is small enough that the business model works. I can put the entire thing together myself, but I'd rather not as I'm probably only ever going to need 10 units. As for building a custom version that does something else? Maybe, but I doubt I'd ever need more than a handful.

It's the same reason I decided to buy a Prism controller for my camera, sure I could have designed one myself, but the guy that makes them really thought through the design and came up with a very nice package, all for $24.50. At that price my time is worth more and I'm grateful to have someone build and test them for me.

Thanks for your hard work! You deserve the 40%.
Comment by Travis on June 18, 2011 at 7:23pm
To be clear... you're charging 40% markup, right?  Your margins are $28 / $98 => ~28.5%

3D Robotics
Comment by Chris Anderson on June 18, 2011 at 8:34pm
Travis: Ancient post. My math sucked back then ;-)


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