I started selling the EEPROM writer kits six weeks ago. Now seems like a good time to reflect.
I’ve kept a spreadsheet of what I’ve spent on the kits (buying stock, getting PCBs made, postage, etc) and what money has come in. It seems that running your own business (however small and weedy it may be) is all about being perpetually in debt. I think the skill comes in deciding how far into debt you’ll let yourself go.
I want to be able to get orders out quickly (ideally within 24 hours). That means I need to have all the stock ready to go – I had no idea how many orders I’d get, so when purchasing I err’d on the optimistic side.
To be able to make the kits competitively priced, I had to order from the far-east. That might take a month to arrive, so I needed to spend a fair amount of money well in advance.
So I was already very nervous and broke before I even listed the product!
When my fifth kit sold, I became profitable … briefly. Then I realised I would soon be running out of stock so I needed to order more (remember: one month to arrive) so I descended back into debt again.
And we’re only talking about comparatively small figures, here. Heaven knows how proper businesses do it!
Looking at the figures, I feel like I’m probably under-charging. And yet I feel guilty about charging any more. So whenever you buy a kit from a hobbyist, remember: the vendor is walking a very fine line between guilt and financial solvency.
If you think you could get the parts and build it cheaper yourself then … well, you might be right, but the saving won’t be as much as you might think. And you’re not paying for R&D time, experimentation, failed prototypes, storage, stress, alcohol, bank balances, visits to the post office, printing instructions, and so on. When you start to track this properly, the true cost becomes much more apparent. Honestly: we’re not trying to swindle you!
Aside from that, most other aspects of the last six weeks have been great fun. It’s a curiously addictive feeling when you receive a new-order e-mail. Every address I’ve seen I’ve looked at on Google Street View because I wanted to see where the parcel was going (and I’ve discovered I quite like the look of Arizona). And chatting to people with questions has been fun, too.
With all that in mind … I have another project ready to be listed this week. Nearly all the parts have arrived, and I’m already quite impressively in-debt. It’s a bit more interesting than an EEPROM writer, and I hope people will like it and do interesting things with it. I’ll try and fight the urge to under-charge, and we’ll see how it goes. I hope you like projects with lots of LEDs!