So I finished the design and preliminary testing of my product. It is a consumer product, with hopes for direct web sales, but reseller option may come in sooner or later. Extensive customer research and preparation is done a long ago-I do know who my customer is, how do I benefit him, what is he willing to pay, etc. That is not the question.

Currently, if I pay off the cost of my bill of materials and labor, I left with approximately 35-40% gross profit margin for small batches of ~0 units.

All that is with standard components, purchased from McMaster and Digikey, and without any tooling or manufacturer optimization (couple of local machine shops, CNC machining, no molding or casting, which I am planning to switch to later on). I expect to ~4-5k units annually in the developed stage of my venture.

Do I have a here? Any opinions, experiences? My worry is the profit margin: it seems to be on the lower side.



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