witches' brew
in [Design]
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From: John Larkin on 19 Jul 2010 21:52 On Mon, 19 Jul 2010 19:47:52 -0500, "krw(a)att.bizzzzzzzzzzzz" <krw(a)att.bizzzzzzzzzzzz> wrote: >On Mon, 19 Jul 2010 17:33:23 -0700, John Larkin ><jjlarkin(a)highNOTlandTHIStechnologyPART.com> wrote: > >>On Mon, 19 Jul 2010 19:12:32 -0500, "krw(a)att.bizzzzzzzzzzzz" >><krw(a)att.bizzzzzzzzzzzz> wrote: >> >>>On Mon, 19 Jul 2010 00:47:16 -0700, Robert Baer <robertbaer(a)localnet.com> >>>wrote: >>> >>>>John Larkin wrote: >>>>> We blew up a couple more of the SIP dc/dc converters, CUI type VASD1. >>>>> This one is 12 volts in, +-15 out, rated 1 watt. I don't totally blame >>>>> the bricks, since certain un-named parties likely shorted the outputs >>>>> while probing channels, but it would be nice if they could stand a >>>>> load short. >>>>> >>>>> There are 12 on this board... >>>>> >>>>> ftp://jjlarkin.lmi.net/V220_top.jpg >>>>> >>>>> >>>>> Anyway, I took one home and tore off the potting shell. It's potted >>>>> with something soft and a bit gritty, maybe a filled soft epoxy. >>>>> Looking around the garage, I had some Jasco paint remover (methylene >>>>> chloride mostly) some acetone, and some MEK, so I mixed them all in a >>>>> glass jar and soaked the thing overnight. The potting swelled up and >>>>> got really soft. I did lose the transformer, which stayed in the epoxy >>>>> glob when I ripped it off the board. >>>>> >>>>> ftp://jjlarkin.lmi.net/VASD1_top.JPG >>>>> >>>>> This looks like a simple 2-transistor forward converter on the left, >>>>> and a couple of dual diodes and caps on the right. The substrate is a >>>>> pc board, unlike the Muratas which are ceramic. >>>>> >>>>> Maybe we'll add a polyfuse or something to protect them, although >>>>> things like this tend to quit failing when people quit probing. >>>>> >>>>> With another part or two, they could have made this short-resistant. >>>>> But these are only about $4 each and work very nicely otherwise. >>>>> >>>>> John >>>>> >>>>> >>>> It has been said, for a car, that addition of a 50 cent part >>>>increases the consumer price by 5 dollars. >>>> So...the addition "of another part or two" would almost double the price. >>>> "QED" >>> >>>In the real world there is no correlation between them, other than price > >>>cost. Put another way, if I shave $.50 off the cost of a product there is no >>>corresponding drop in our price. Price is set by a completely different set >>>of equations than cost. >> >>If we add a part, the price goes up 4x the part cost. If we delete a >>part, the price doesn't change. > >That's because you have no idea where to price your products. That's often true. There is theoretically a curve of total profit versus unit selling price, a sort of inverted parabola. Many small companies have no idea where they are exactly on that curve, and have no good way to find out. If you have a lot of competition and a lot of history, you know; the flip side is that, in that situation, margins are usually low. When you have a high-margin niche product that is IP intensive, and no direct competition, it is hard to set pricing. I recall reading some studies that suggest that most companies tend to set their selling price below the peak point, because more sales make them feel better. We have lately been adding sales reps all over the country, and we're asking them what they think of our pricing. They are better placed to research that than we are, since they talk to a lot of potential customers. The only feedback so far is the the e/o stuff looks cheap. If you sold breakfast cereal, you could do experiments: increase the price 5% in 5 cities and wait and see what happens. We don't have enough statistics to do anything like that. John
From: Grant on 19 Jul 2010 22:09 On Mon, 19 Jul 2010 18:52:23 -0700, John Larkin <jjlarkin(a)highNOTlandTHIStechnologyPART.com> wrote: >On Mon, 19 Jul 2010 19:47:52 -0500, "krw(a)att.bizzzzzzzzzzzz" ><krw(a)att.bizzzzzzzzzzzz> wrote: > >>On Mon, 19 Jul 2010 17:33:23 -0700, John Larkin >><jjlarkin(a)highNOTlandTHIStechnologyPART.com> wrote: >> >>>On Mon, 19 Jul 2010 19:12:32 -0500, "krw(a)att.bizzzzzzzzzzzz" >>><krw(a)att.bizzzzzzzzzzzz> wrote: >>> >>>>On Mon, 19 Jul 2010 00:47:16 -0700, Robert Baer <robertbaer(a)localnet.com> >>>>wrote: >>>> >>>>>John Larkin wrote: >>>>>> We blew up a couple more of the SIP dc/dc converters, CUI type VASD1. >>>>>> This one is 12 volts in, +-15 out, rated 1 watt. I don't totally blame >>>>>> the bricks, since certain un-named parties likely shorted the outputs >>>>>> while probing channels, but it would be nice if they could stand a >>>>>> load short. >>>>>> >>>>>> There are 12 on this board... >>>>>> >>>>>> ftp://jjlarkin.lmi.net/V220_top.jpg >>>>>> >>>>>> >>>>>> Anyway, I took one home and tore off the potting shell. It's potted >>>>>> with something soft and a bit gritty, maybe a filled soft epoxy. >>>>>> Looking around the garage, I had some Jasco paint remover (methylene >>>>>> chloride mostly) some acetone, and some MEK, so I mixed them all in a >>>>>> glass jar and soaked the thing overnight. The potting swelled up and >>>>>> got really soft. I did lose the transformer, which stayed in the epoxy >>>>>> glob when I ripped it off the board. >>>>>> >>>>>> ftp://jjlarkin.lmi.net/VASD1_top.JPG >>>>>> >>>>>> This looks like a simple 2-transistor forward converter on the left, >>>>>> and a couple of dual diodes and caps on the right. The substrate is a >>>>>> pc board, unlike the Muratas which are ceramic. >>>>>> >>>>>> Maybe we'll add a polyfuse or something to protect them, although >>>>>> things like this tend to quit failing when people quit probing. >>>>>> >>>>>> With another part or two, they could have made this short-resistant. >>>>>> But these are only about $4 each and work very nicely otherwise. >>>>>> >>>>>> John >>>>>> >>>>>> >>>>> It has been said, for a car, that addition of a 50 cent part >>>>>increases the consumer price by 5 dollars. >>>>> So...the addition "of another part or two" would almost double the price. >>>>> "QED" >>>> >>>>In the real world there is no correlation between them, other than price > >>>>cost. Put another way, if I shave $.50 off the cost of a product there is no >>>>corresponding drop in our price. Price is set by a completely different set >>>>of equations than cost. >>> >>>If we add a part, the price goes up 4x the part cost. If we delete a >>>part, the price doesn't change. >> >>That's because you have no idea where to price your products. > >That's often true. There is theoretically a curve of total profit >versus unit selling price, a sort of inverted parabola. Many small >companies have no idea where they are exactly on that curve, and have >no good way to find out. If you have a lot of competition and a lot of >history, you know; the flip side is that, in that situation, margins >are usually low. When you have a high-margin niche product that is IP >intensive, and no direct competition, it is hard to set pricing. > >I recall reading some studies that suggest that most companies tend to >set their selling price below the peak point, because more sales make >them feel better. > >We have lately been adding sales reps all over the country, and we're >asking them what they think of our pricing. They are better placed to >research that than we are, since they talk to a lot of potential >customers. The only feedback so far is the the e/o stuff looks cheap. > >If you sold breakfast cereal, you could do experiments: increase the >price 5% in 5 cities and wait and see what happens. We don't have >enough statistics to do anything like that. Last place I worked at, raw margin was 8x parts, but they didn't count software development. On lower sales volume devices, software cost around $400 per unit, but a common high volume part had a mask chip that meant software cost was almost free. Lots of variation, and it was a small company in a niche market. Grant.
From: John Larkin on 19 Jul 2010 22:43 On Tue, 20 Jul 2010 12:09:23 +1000, Grant <omg(a)grrr.id.au> wrote: >On Mon, 19 Jul 2010 18:52:23 -0700, John Larkin <jjlarkin(a)highNOTlandTHIStechnologyPART.com> wrote: > >>On Mon, 19 Jul 2010 19:47:52 -0500, "krw(a)att.bizzzzzzzzzzzz" >><krw(a)att.bizzzzzzzzzzzz> wrote: >> >>>On Mon, 19 Jul 2010 17:33:23 -0700, John Larkin >>><jjlarkin(a)highNOTlandTHIStechnologyPART.com> wrote: >>> >>>>On Mon, 19 Jul 2010 19:12:32 -0500, "krw(a)att.bizzzzzzzzzzzz" >>>><krw(a)att.bizzzzzzzzzzzz> wrote: >>>> >>>>>On Mon, 19 Jul 2010 00:47:16 -0700, Robert Baer <robertbaer(a)localnet.com> >>>>>wrote: >>>>> >>>>>>John Larkin wrote: >>>>>>> We blew up a couple more of the SIP dc/dc converters, CUI type VASD1. >>>>>>> This one is 12 volts in, +-15 out, rated 1 watt. I don't totally blame >>>>>>> the bricks, since certain un-named parties likely shorted the outputs >>>>>>> while probing channels, but it would be nice if they could stand a >>>>>>> load short. >>>>>>> >>>>>>> There are 12 on this board... >>>>>>> >>>>>>> ftp://jjlarkin.lmi.net/V220_top.jpg >>>>>>> >>>>>>> >>>>>>> Anyway, I took one home and tore off the potting shell. It's potted >>>>>>> with something soft and a bit gritty, maybe a filled soft epoxy. >>>>>>> Looking around the garage, I had some Jasco paint remover (methylene >>>>>>> chloride mostly) some acetone, and some MEK, so I mixed them all in a >>>>>>> glass jar and soaked the thing overnight. The potting swelled up and >>>>>>> got really soft. I did lose the transformer, which stayed in the epoxy >>>>>>> glob when I ripped it off the board. >>>>>>> >>>>>>> ftp://jjlarkin.lmi.net/VASD1_top.JPG >>>>>>> >>>>>>> This looks like a simple 2-transistor forward converter on the left, >>>>>>> and a couple of dual diodes and caps on the right. The substrate is a >>>>>>> pc board, unlike the Muratas which are ceramic. >>>>>>> >>>>>>> Maybe we'll add a polyfuse or something to protect them, although >>>>>>> things like this tend to quit failing when people quit probing. >>>>>>> >>>>>>> With another part or two, they could have made this short-resistant. >>>>>>> But these are only about $4 each and work very nicely otherwise. >>>>>>> >>>>>>> John >>>>>>> >>>>>>> >>>>>> It has been said, for a car, that addition of a 50 cent part >>>>>>increases the consumer price by 5 dollars. >>>>>> So...the addition "of another part or two" would almost double the price. >>>>>> "QED" >>>>> >>>>>In the real world there is no correlation between them, other than price > >>>>>cost. Put another way, if I shave $.50 off the cost of a product there is no >>>>>corresponding drop in our price. Price is set by a completely different set >>>>>of equations than cost. >>>> >>>>If we add a part, the price goes up 4x the part cost. If we delete a >>>>part, the price doesn't change. >>> >>>That's because you have no idea where to price your products. >> >>That's often true. There is theoretically a curve of total profit >>versus unit selling price, a sort of inverted parabola. Many small >>companies have no idea where they are exactly on that curve, and have >>no good way to find out. If you have a lot of competition and a lot of >>history, you know; the flip side is that, in that situation, margins >>are usually low. When you have a high-margin niche product that is IP >>intensive, and no direct competition, it is hard to set pricing. >> >>I recall reading some studies that suggest that most companies tend to >>set their selling price below the peak point, because more sales make >>them feel better. >> >>We have lately been adding sales reps all over the country, and we're >>asking them what they think of our pricing. They are better placed to >>research that than we are, since they talk to a lot of potential >>customers. The only feedback so far is the the e/o stuff looks cheap. >> >>If you sold breakfast cereal, you could do experiments: increase the >>price 5% in 5 cities and wait and see what happens. We don't have >>enough statistics to do anything like that. > >Last place I worked at, raw margin was 8x parts, but they didn't count >software development. On lower sales volume devices, software cost >around $400 per unit, but a common high volume part had a mask chip >that meant software cost was almost free. Lots of variation, and >it was a small company in a niche market. > >Grant. My company averages parts cost about 22% of total sales. A lot of that is pc boards, sheet metal/panels, and expensive analog ICs. We define a thing called "direct cost" which is parts and unburdened assembly+test cost. Selling price can be 2.5x DC (marginal) to as much as 6 or even 8x DC, great if you can get it. At the end of the year, we make a few per cent, so it must be about right, or maybe we're pricing a little low. Engineering, sales, management, are all overhead to be covered by the markup on DC. John
From: krw on 20 Jul 2010 00:09 On Mon, 19 Jul 2010 18:52:23 -0700, John Larkin <jjlarkin(a)highNOTlandTHIStechnologyPART.com> wrote: >On Mon, 19 Jul 2010 19:47:52 -0500, "krw(a)att.bizzzzzzzzzzzz" ><krw(a)att.bizzzzzzzzzzzz> wrote: > >>On Mon, 19 Jul 2010 17:33:23 -0700, John Larkin >><jjlarkin(a)highNOTlandTHIStechnologyPART.com> wrote: >> >>>On Mon, 19 Jul 2010 19:12:32 -0500, "krw(a)att.bizzzzzzzzzzzz" >>><krw(a)att.bizzzzzzzzzzzz> wrote: >>> >>>>On Mon, 19 Jul 2010 00:47:16 -0700, Robert Baer <robertbaer(a)localnet.com> >>>>wrote: >>>> >>>>>John Larkin wrote: >>>>>> We blew up a couple more of the SIP dc/dc converters, CUI type VASD1. >>>>>> This one is 12 volts in, +-15 out, rated 1 watt. I don't totally blame >>>>>> the bricks, since certain un-named parties likely shorted the outputs >>>>>> while probing channels, but it would be nice if they could stand a >>>>>> load short. >>>>>> >>>>>> There are 12 on this board... >>>>>> >>>>>> ftp://jjlarkin.lmi.net/V220_top.jpg >>>>>> >>>>>> >>>>>> Anyway, I took one home and tore off the potting shell. It's potted >>>>>> with something soft and a bit gritty, maybe a filled soft epoxy. >>>>>> Looking around the garage, I had some Jasco paint remover (methylene >>>>>> chloride mostly) some acetone, and some MEK, so I mixed them all in a >>>>>> glass jar and soaked the thing overnight. The potting swelled up and >>>>>> got really soft. I did lose the transformer, which stayed in the epoxy >>>>>> glob when I ripped it off the board. >>>>>> >>>>>> ftp://jjlarkin.lmi.net/VASD1_top.JPG >>>>>> >>>>>> This looks like a simple 2-transistor forward converter on the left, >>>>>> and a couple of dual diodes and caps on the right. The substrate is a >>>>>> pc board, unlike the Muratas which are ceramic. >>>>>> >>>>>> Maybe we'll add a polyfuse or something to protect them, although >>>>>> things like this tend to quit failing when people quit probing. >>>>>> >>>>>> With another part or two, they could have made this short-resistant. >>>>>> But these are only about $4 each and work very nicely otherwise. >>>>>> >>>>>> John >>>>>> >>>>>> >>>>> It has been said, for a car, that addition of a 50 cent part >>>>>increases the consumer price by 5 dollars. >>>>> So...the addition "of another part or two" would almost double the price. >>>>> "QED" >>>> >>>>In the real world there is no correlation between them, other than price > >>>>cost. Put another way, if I shave $.50 off the cost of a product there is no >>>>corresponding drop in our price. Price is set by a completely different set >>>>of equations than cost. >>> >>>If we add a part, the price goes up 4x the part cost. If we delete a >>>part, the price doesn't change. >> >>That's because you have no idea where to price your products. > >That's often true. There is theoretically a curve of total profit >versus unit selling price, a sort of inverted parabola. Many small >companies have no idea where they are exactly on that curve, and have >no good way to find out. If you have a lot of competition and a lot of >history, you know; the flip side is that, in that situation, margins >are usually low. When you have a high-margin niche product that is IP >intensive, and no direct competition, it is hard to set pricing. Nevertheless, car companies do. Price and cost are totally separate (noting the obvious exception). >I recall reading some studies that suggest that most companies tend to >set their selling price below the peak point, because more sales make >them feel better. > >We have lately been adding sales reps all over the country, and we're >asking them what they think of our pricing. They are better placed to >research that than we are, since they talk to a lot of potential >customers. The only feedback so far is the the e/o stuff looks cheap. "e/o"? "Cheap", as in inexpensive for the market, or "cheap", as in they don't like your labels? >If you sold breakfast cereal, you could do experiments: increase the >price 5% in 5 cities and wait and see what happens. We don't have >enough statistics to do anything like that. I didn't say you were wrong to price the way you do. Obviously you're successful. Car companies don't price a car up five bucks because they spent another $.50 on a bolt. OTOH, they might price it up $50 because the $.50 chrome bolt looks spiffier than the $1 brushed bolt.
From: Joel Koltner on 20 Jul 2010 00:58
"John Larkin" <jjlarkin(a)highNOTlandTHIStechnologyPART.com> wrote in message news:0jv946ttf0aha1s406o0doi7966h3ir8ju(a)4ax.com... > I recall reading some studies that suggest that most companies tend to > set their selling price below the peak point, because more sales make > them feel better. ....and it builds long-term value as well, since not only will that many more people will know your company's name, but they'll think of your products as a good value. |