40 minutes ago, BruceMcF said:
Yes, that is one of the principle differences between pre-orders and crowdfunding ... with a crowdfunding campaign, you set a minimum volume required to breakeven at the crowdfund price, and that minimum volume determines the crowdfunding target required to launch.
And of course it's even worse than I alluded to (you're an economist I think, so I'm not trying to teach you anything, and I am likely simplifying this too much still, but I thought I'd write it out). Let's just say for the sake of argument David has invested $10,000, the smallest five figure number. I know nothing about cost of a board, so I went to PCBWAY and used their instant quote and picked some reasonable looking default values for an appropriately sized board.
WARNING! DISCLAIMER! THESE ARE NOT THE X16 PRICES! THESE ARE NUMBERS FOR A DEFAULT MICRO ATX SIZED BOARD FROM PCBWAY USED TO ILLUSTRATE ECONOMIES OF SCALE!
Cost to manufacture some numbers of board:
Qty 1: $147 + $20 shipping = $167 / board
Qty 10: $246 + $46 = $30 / board (interestingly close to the $27 / board price someone observed in a picture posted by Kevin Williams, I think)
Qty 100: $1,496 + $266 = $18 / board
Qty 1000: $9,995 + $1,824 = $12 / board
Cost per board to break even after the $10,000 investment:
Qty 1: $10,167 / board
Qty 10: $1,030 / board
Qty 100: $118 / board
Qty 1000: $22 / board
Multiple people have talked about the price of a board with appropriate or reasonable markup, but the markup above the bare cost to manufacture a board cannot be computed without factoring in the original amount invested to design said board.
Generally speaking, I know many people look at the price of something, think about how much it would cost them to buy the components, and feel like they're getting ripped off. "Why are you charging me $40 for software when it only costs a few bucks for a diskette, box, and manual if I do it myself?" They don't think about the huge up front cost to buy materials, labor to assemble, time spent designing and implementing the program.
In the case of an assembled board vs DIY kit vs bare board, the incremental costs per board are constant. A bare board costs $X depending on the quantity produced. The price of individual components will drop as the quantity ordered increases, which is one reason not to give people the "bare board without parts" option; it will drive up the price for everyone else, not to mention the support issues of people picking the wrong parts because they don't know better, and even a disclaimer of "no support" won't prevent there being some cost. An assembled board is the cost of labor.
Anyway, all the ideas of "how about just doing X to reduce the cost" really have no prayer of reducing cost in any meaningful way. The biggest volume of boards will be sold to people who will only buy a completed system. A kit vs completed build can save you labor cost, which is not inconsequential (unless you value your time), but there are overhead costs that have to be accounted for even if there isn't labor involved in manufacture. Just putting the kits or boards together in appropriate packaging will be a labor intensive task. All you have to do to prove that to yourself is to watch some of David's videos showing his days after the release of new software.
AGAIN: THESE ARE NOT THE ACTUAL PRICES! THEY ARE USED FOR ILLUSTRATION PURPOSES ONLY!