If your BOM cost is say $200 including labour, then you should be targeting a price of at least $600. That $200 doesn't include the cost of design, tooling and so on. If you bought a $50k CNC machine you want to get some ROI! If you go for a distributor, they're going to take 10-20% (and they may want a volume discount). You might want some room to have sales, or offer bundle discounts to attract customers. You have to ship the product, market it, support it and fund the next iteration. Why go for razor thin margins? If you have a niche, people will pay. Apple have this nailed - they are expensive because they actually price their products sensibly and they're rolling in cash as a result.
If your BOM cost is say $200 including labour, then you should be targeting a price of at least $600. That $200 doesn't include the cost of design, tooling and so on. If you bought a $50k CNC machine you want to get some ROI! If you go for a distributor, they're going to take 10-20% (and they may want a volume discount). You might want some room to have sales, or offer bundle discounts to attract customers. You have to ship the product, market it, support it and fund the next iteration. Why go for razor thin margins? If you have a niche, people will pay. Apple have this nailed - they are expensive because they actually price their products sensibly and they're rolling in cash as a result.
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