Wednesday, February 11, 2015

Making it Cheaper!

One of the important things I learned from the VIUD's KickStarter was that its price was on the high end so finding a way to reduce that price is now at the top of my list of things to do. At first glance it may appear that there is little that can be done...the prices used on the KickStarter were the lowest I could get them at the time but there are a few areas we can look at and perhaps their combined effect can result in a notable price reduction.

Sales Method

Using KickStarter as the sales method introduces a not insignificant amount of overhead on the price which includes:
  • KickStarter fee (5%)
  • Credit card fees (3-5%)
  • International shipping

If we compare the VIUD's prices from the KickStarter and without this overhead we can see a good sized difference:

ModelKickStarter PriceBase Price
Al 16GB
Al 32GB
Al 64GB
Al 128GB
Al 256GB
Ti 16GB
Ti 32GB
Ti 64GB
Ti 128GB
Ti 256GB

The effect is more significant in the more expensive models...the 256GB Ti is already over $150 cheaper! 

Technically some of this overhead, namely the credit card and shipping fees, will have to be included at some point but removing them from the VIUD's list price is an important step. 

Case Material

We can evaluate the case materials to see if any trade-offs can be made regarding price. The current two case materials, Aluminum 7068-T651 and Titanium Grade 5, were chosen as they are among the highest strength alloys of the respective material. Unfortunately, this also means they are more expensive than other alloys. 

Comparing a few common alloys:
AlloyTensile StrengthCost
Al 7068-T65195 kpsiLow-Medium
Al 7075-T675 kpsiLow
Al 606135 kpsiLow
Ti Grade 5120 kspiHigh
Ti Grade 240 kpsiMedium-High

For the Aluminum VIUD we can consider moving to Al 7075-T6 as this alloy is still very strong and it can make the case manufacturing price a bit cheaper. Experience has also shown that it is much easier to find a machine shop able to source and work with 7075 than 7068. For the Titanium VIUD we will stick with Grade 5 as the more common Grade 2 is significantly weaker and we can have the Titanium VIUDs be a "premium" model to match its higher price.

Case Manufacturer

The VIUD's case is the largest portion of its manufacturing cost comprising 50-80% of its total. I've already sourced a bunch of machine shops for the case production and choose the cheapest one. At least the cheapest one that was able to make the case and not screw up royally. There was one, unmentionable, shop that failed miserably but did offer much lower prices. Perhaps another search and production test will reveal a shop with a lower price but still good quality production.

To make a long story short, I found a few dozen potential shops and ordered VIUD case samples from four of them for evaluation purposes. All four shops had lower prices than my previous manufacturer and 3 of the 4 managed to supply cases with pretty decent qualities as seen in the below pictures:

Case Manufacturer A

Case Manufacturer B

Case Manufacturer C
Case Manufacturer D
Three of the manufacturers supplied pretty much identical parts with very good quality. Manufacturer A was the notable exception with completely unusable quality, literally! The threads were so bad they wouldn't screw together even after trying to fix them. You'd think you would want to do your best work when making samples for a potentially larger order.

Potentially Good News....

I still need to fully test the VIUD case samples from the newly sourced manufacturers to make sure the cases are worthy of being used in the world's toughest USB drive, but it looks promising at this point. Based on the average quoted price of the 4 suppliers I should be able to get the list price of the cheapest VIUD model (Al 16GB) well under $100 which should make it much easier to convince people to buy it.