How to Price Your Electronics Hardware Project - EEs Talk Tech Electrical Engineering Podcast #14

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Daniel Bogdanoff and Mike Hoffman sit down with Brig Asay to talk about how to price an electronics hardware project. Listen in as they discuss the complexities and economics of pricing a new hardware product in a global economy.

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Twitter: @DanielBogdanoff https://twitter.com/DanielBogdanoff

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Agenda:

How should you price an electronics hardware project?

2:00

Think about economics 101: Supply & Demand

This is where you have to start when setting a price for electronics hardware projects 2:40

Top down pricing looks at "what does it cost to manufacture electronics?"

But if you price your hardware just based on production costs, you're going to fail in your pricing strategy.

You have to think about what consumers are willing to pay.

4:00

Pharmaceutical companies are the example of poor pricing strategies. They justify having high prices based on having high R&D project costs.

Realistically, consumers don't care about R&D costs. They care about how badly they need the product, and this will define how much they are willing to pay.

4:30

Someone on EEVblog hacked a 3000T, reverse engineering it to make it a 1 GHz scope.

5:30

The newer the idea, the more difficult it is to price because there's no established market value.

Talking to potential customers is a good way to figure out how to price your electronics hardware project.

6:45

Marketing 101: understand your customers?

Determine which people you are trying to sell to and talk to them.

A competitor's pricing is a good baseline, but then you often get into value-based pricing.

7:50

Spreadsheets kill pricing. They compete with your gut feeling.

$10k per GHz of bandwidth is a standard in oscilloscope pricing, but it doesn't always work out that way. When we came out with the Z-Series, a 63 GHz scope, we knew the market couldn't support a $630K price.

9:00

Price/volume curve = Supply + demand chart

10:50

Different parts of the globe have different pricing expectations.

Currency conversion, cultural expectations, and import taxes all influence regional pricing.

Should a small company even have ... https://www.youtube.com/watch?v=k5pZuaMez9c