Essays/linkedin/24-01-09 making it cheaper

💸 "If I can make it for 20 and sell it for 30, I am making a ton of profit." I have seen many entrepreneurs falling in this trap when they focus too much on being "cheaper".

I have discussed with countless scientists (and I was one of them!) that see the price of an instrument and think they can make it way cheaper by themselves. Then, they go one step forward and think if they can make it cheaper, they can sell it cheaper.

One of the challenges with scientific instrumentation is that it's never as cheap as you would want it to be.

The Costs of Good Sold (COGS) is what most people have access to, the bill of materials.

But what happens with the time it takes to procure and parts and assemble them? And the time it takes negotiating with people?

And probably you want some management, finances, and HR, plus you want to keep making your products better by reinvesting.

Do you have an IP license? What's the percentage?

If you have a bill of materials of 20, probably you'll have to sell your device at least at 100 to have a healthy company. Are you as cheap as you thought?