Generally you’ll find that the msrp is going to be roughly 9xBOM (bill of materials). That leaves wholesale prices to be roughly 3xBOM so that there’s some profitability at that stage. This is at least a common heuristic that I use when designing hardware. It’s easy to say, oh, this chip is way better and it only costs 1 dollar more in quantity, but now your final price is $9 more and you may have priced youself out of the market. These numbers change depending on volume, and how many zeros the final price has. And of course demand will also inform final price, but they’re numbers that seem to hold in a lot of manufacturing going back the early 80’s.
As for the BOM cost, you’re right that for the board, the highest costs are probably the charge circuit followed by the processor. Battery probably costs the most, but don’t discount the cost of the mould for the plastic, it’s a high up front cost that needs to be replaced more frequently than you’d guess.
In the end, that $20 bike lamp probably costs the shop $7-10 to aquire. And any shop that doesn’t charge at least 2x their average cost for small items will tend to find their profitability eroded by fielding returns and other hassle customers.
The bike lights that cost 15-20 € in Europe cost 2-5€ in bulk on alibaba. Literally the same model. I guess it's mostly shipping, import duties, taxes, marketplace fees, free shipping to customer, returns handling and profit margin.
Considering that you can pickup free portable chargers at trade shows, they must cost next to nothing to source. The LED adds a little bit more to the price but again not much. The whole package is very cheap wholesale and can probably be marked with whatever brand you want if you ask an Alibaba vendor. The $20 comes into play when it reaches the store. The store has already bought them from some company that bought them from China so there's already a slight markup there and then the store adds a little more. They know people will buy them and depending on what kind of store it is, can charge a little more if they know their customers well. A Walmart-like store isn't going to be able to sell them for too much above cost but a specialty bike shop can mark them up more since their customers are already spending higher prices. A specialty bike shop might even order them with custom branding, adding a little more to the final price.
As for something like the Ikea bulb in the article, it includes an RF module that isn't that cheap. It costs about $7 per 1000 pieces. Maybe they get it for $5 or $6. Add in the slightly more expensive housing, it look like a halogen bulb but is LED, and then add in the cost of a quality RBG LED and the rest of the components and markup to get $15. Ikea does win out compared to other store for things like this because Ikea is buying the units from themself. The Ikea Sonos speaker is the only thing I've ever seen there that wasn't a pure Ikea product. They really have mastered horizontal and vertical integration.
Low volume products need high margins to be worthwhile. Which is another way of saying "no one has found it worthwhile to sell a simple rechargable bicycle light for $18."
- It can't be about chip/logic, as that's a commodity these days (as this post celebretes).
- It can't be LEDs, because they are dirt cheap too, especially red ones.
- Building the plastic case doesn't seem to warrant such a high price.
- The battery needs very little capacity, magnitudes lower than e.g. that of a phone.
- Is it maybe the charging mechanism through USB? Are there some crazy patent fees?