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Topic: How to sell your own ideas (Read 3668 times) previous topic - next topic

Udo Klein

By now I created some simple designs + software. Now I figure that I could release them. But I also figure that I will get nothing but some (none existing) karma points. Still I put quite some work into them. So I wonder how would anyone make money out of self conceived open source designs? I mean besides the Arduino guys or Linus Torvalds.

The goal is to get at least the development costs back. If possible to fund even further projects.

The alternate approach would be to start an own business. However this seems like really a lot of work that would distract me from further design.

I figure that there is at least one shop that might possibly market my stuff (gadget ganster). Has anyone any experience with them? Or with other similar shops? Any other hints are appreciated as well.
Check out my experiments http://blog.blinkenlight.net

liudr

Hi fellow "Edison" member,

I have the same problem. I like Arduino and spend a bit too much time on it. I guess one way to go is to sell your hardware with free software. Unless you opened a huge gap in the market with your stuff, it's gonna be a small profit selling your personal designs. I've sold my Phi-1 shields for a small profit, only if I don't count the time I spent developing the design and numerous software support and project codes. Financially, it's not worth much. It's still a hobby. Hobbies are supposed to spend money, not making money. Opening up a business, on the other hand, may have tax benefit, depending on your state and local tax laws. You can claim you use your workshop for design purpose and a computer and several tools are dedicated to the business. Small games Uncle Sam enjoys watching us play in my country (technically in their country. Why they wouldn't just hand me a residency card for being an awesome professor so long is beyond me  XD).

I'm also thinking about setting up a donation for free software. I've seen it but don't know how to. You open the source and hope your users come to some senses besides liking your code, donate pizza or bear money to your cause.

Graynomad

#2
Mar 25, 2011, 06:24 pm Last Edit: Mar 25, 2011, 06:27 pm by Graynomad Reason: 1
gadget gangster seem mostly into Propeller stuff, do you know if they are interested in Arduino-based projects?

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The alternate approach would be to start an own business. However this seems like really a lot of work that would distract me from further design.

In the photography game people generally aspire to opening a gallery and selling their landscape (or whatever) photographs. I know many people who have doen that (myself included) and let me tell that you will hardly ever get out to do the thing you loved to do in the first place. Unless you grow to the point of having a manager you'll spend all you time dealing with accounts receivable, accounts payable and (my favourite) accounts forgettable. 

I see no reason it would be different selling electronics.

I to may find myself in this situation soon (if I ever get my projects finished :)), there's no way I want to deal with making 100 boards, packing orders etc. I could possibly handle selling just PCBs but that will limit the market a LOT I suspect, especially with all SMD components.

Personally I like the R&D part, the rest is not interesting which I guess explains why I have bugger-all money.

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Opening up a business, on the other hand, may have tax benefit, depending on your state and local tax laws.

That's true probably in most countries. Here in Aus they will allow you to do that for a few years but if you aren't showing a decent profit at some point and are still claiming expenses (which can be "negative geared" against other income as well) they decide you are taking the piss.

I like the Gadget Gangster model, 20% is plenty IMO if it allows you to get on with the fun stuff.

______
Rob



Rob Gray aka the GRAYnomad www.robgray.com

Coding Badly

#3
Mar 25, 2011, 07:40 pm Last Edit: Mar 25, 2011, 07:44 pm by Coding Badly Reason: 1

Have you considered selling kits?  That seems to give Lady Ada / Ada Fruit and Evil Mad Science a fairly good balance between running a business and tinkering with the next thing.

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Here in Aus they will allow you to do that for a few years but if you aren't showing a decent profit at some point and are still claiming expenses they decide you are taking the piss.


Ditto in the U.S.

Graynomad

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Have you considered selling kits?

That is a good compromise, do you think it would work with a complex board and lots of SMDs including the 100-pin mega2560?

My gut feeling is that few people would want to built it and then there would be a lot of issues with faults.

I'll have a look at Ada and Mad Scientist to see what level of product they have in kits.

_____
Rob
Rob Gray aka the GRAYnomad www.robgray.com

Udo Klein

#5
Mar 26, 2011, 09:45 am Last Edit: Mar 26, 2011, 10:11 am by Udo Klein Reason: 1
The kit idea is not really attractive to me. For several reasons:

- It limits the market.
- It most probably will cause more support requests
- It limits the choice of components, especially the more interesting stuff is small pitch SMD
- It does not ease any administrative overhead, especially the e-waste stuff. I am located in Germany so it does not really matter in what form I sell electronics. I immediately get the "benefits" of e-waste regulations which are ***very*** biased in favor of large companies. Once could come to the conclusion that the German government has an initiative running to restrict innovation to large companies. --> I might be able to sell "naked" boards but no kits unless I want to risk getting kicked by a lawyer. --> I better restrict myself to exporting stuff --> Even more overhead

So I am searching for a partner.
I already got offers by PM. I will not disclose them unless I have agreement to do so. I appreciate more offers :)

Udo
Check out my experiments http://blog.blinkenlight.net

Graynomad

Yeah I think I agree Udo. I've been looking at the products from Adafruit et al and for the most part they are pretty simple boards with PTH components. I think a complex SMD board is not suitable.

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I already got offers by PM.

As a result of your thread the other day I assume. I'll have to do something similar I suspect, I have tried a couple of Australian companies with a view to having my boards manufactured, with no luck so far. I'm guessing China will be the place to go.

BTW, what the heck is e-waste?

______
Rob

Rob Gray aka the GRAYnomad www.robgray.com

Udo Klein

E-waste regulations require that any legal entity selling electronics must ensure that these electronics gets disposed properly. If I understand it right the implementation is that collection and returning is centralized. So you must register per product (not per company). This costs money front up. Then the fun starts. Since it is to expensive to separate your stuff from others you get waste returns by weight. Since it is to expensive to deal with small stuff the smallest amount of waste that returns to you is one container that you have to dispose / get rid of. If you sell less than one container per year, then you take part in the "lottery". Basically this lottery works as follows: if a container is full they will look at the difference of sold vs. disposed. So if you are unlucky you may sell some boards and get such a container. As I understand it this has already killed some small business because they where not prepared to dispose a container of e-waste after selling maybe 100 boards or so.

In order to avoid this you have several options:
1) Ignore it and get kicked with some legal challenges --> not really a good idea
2) Find a partner who deals with this stuff
3) Take part in some disposal pooling (cost money of course).

So you may have to invest several 100 Euros per year just to avoid any of the e-waste trouble. Or you go for the risk. I have absolutely no clue how high the risk of ignoring it really is. You also have to deal with quite some red tape.

Hence my comment that this is biased in favor of large companies. If you sell >10 000 copies of the same thing the e-waste stuff is a reasonable system for you. However they forgot about the smaller companies or prototype runs. If the process would be: "if you stay below 100kg/year then just register your company, tell the sold weight per year and pay this amout per kg (or nothing at all)", then I would not say biased. But the way it is you have a significant entrance barrier for small enterprises.

So anyone in China can slap together 100 boards sell them through Ebay from China and ship them to Germany. Nobody would notice. And even if: the sale happenened in China, so German law does not apply. Products might (unlikely) by confiscated by border controls. But this places risk on the customers who will not face any significant charge. It follows that you have a very hard time to compete with Chinese. Again this is harder for small companies.

Udo

Check out my experiments http://blog.blinkenlight.net

wayneft

Why not "test the waters" with an E-bay store?  It's a minimal investment and might give you an idea of the demand for your product.
I2C GPS Shield

Checkout my Open Source GPS Tracker on Kickstarter

Graynomad

True but doesn't help with manufacturing or Udo's e-waste problem.

In my case at least I don't want (can't) to make 100 boards and really I don't want to deal with the fulfillment side of things.

One thing I can see that would be good about eBay is that you can advertise say 3 items, if they sell you can make more but you never said there would be a large supply from the start. Using normal process you have to "gear up" in case you get 100s of orders and then you're stuck if you don't. The other way around is just as bad because you piss off prospective customers because you can't fulfill orders.

Now if you could get a manufacturer to to 10 that would also respond quickly with another 100 if needed that would be ideal.
______
Rob
Rob Gray aka the GRAYnomad www.robgray.com

liudr

I had no idea about the e-waste stuff.

Here's my thoughts about fulfillment:

I have asked dipmicro.com to help me with packaging and shipping the phi-1 shield kits while I send them my PCBs. It's been a good experience. Just this afternoon I packed 4 phi-2 shield kits, just in case someone wants to buy from me before they became available. It was boring at least. Plus I don't live in a big city. I take the bus to work. If I had to mail packages, I had to go out of my routine and drive to the post office and wait in line since there is only one office near by.

I suggest everyone interested in selling their own creation consider having someone else, an established store (big or small), do the footwork. It's already hard enough for us to come up with original designs, prototype them and make a small production. Why trap yourself in the sales as well? Unless you don't have another job to support you, you can hand over the minimal wage for packing and shipping to someone that does it better than you. They do in bulk and are always more efficient, even a small company can.

wayneft

It's interesting that they would apply the E-waste regulations to all electronics instead of consumer grade or industrial grade electronics.  If you have any local hobby shops around you that deal with "hobbyist" electronics I'm guessing they would know the ins and outs and any possible loopholes in the law.
I2C GPS Shield

Checkout my Open Source GPS Tracker on Kickstarter

Udo Klein

As soon as you start to expose your stuff through a web shop the loop holes start to close. There are lawyers in Germany that search for shops making mistakes. Then they will find a way to bully you in order to extract money. There are lots of these examples. So asking a brick and mortar shop about loopholes might not be the best idea. This will likely eat up all expected gains sooner as one might think. I am definitely not going to try this out.
Check out my experiments http://blog.blinkenlight.net

wayneft

Do you have a cutoff price in mind that you would be happy with to comply with the E-waste program? I ask because I did some reading on E-waste (I'm very bored at work today) and it looks like it's the same throughout Europe and there was a company in the UK (I believe Valpak) that handles all of the E-waste "stuff" for businesses.  They have different levels of pricing, but they had one specifically for small companies generating less than 1 tonne a year in E-waste and the price was 250 GBP.  I don't know what the conversion rate is off the top of my head.
I2C GPS Shield

Checkout my Open Source GPS Tracker on Kickstarter

bilbo

http://www.sparkfun.com/tutorials/92
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The cat asked, "Where do you want to go?"
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