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Wednesday, February 16, 2005
Economics of Shit. Or How I Reverse Engineer the Cost a Mac Mini Accessory
"As long as people will accept crap, it will be financially profitable to dispense it." D. Cavett
Most iPod accessories fall into that category (with few notable exceptions), and are often much cheaper to make equivalent items for a fraction of the cost. Now its starting to happen with the Mac Mini. The Plasticsmith is selling a plexiglas sheet with and without an LED for $30 I'm making some assumptions but I bet they have access to a laser cutter, so matching the curve on the Mac Mini is no problem.
Plexi as always is pretty cheap, in this case you can get a 96"x48"x3/4" sheet for $440, that makes 98 platforms, if you get 12 sheets get a discount of $15 and you bring the individual price per platform to $4, and you get 1200 of the things. They're selling to $20 (basic no LED version) In case you didn't crunch that number in your head thats $16 profit per unit making a grand total of near $20,000 For a piece of fucking plastic. Any joe blow with a jigsaw/bansaw/dremal/router/coping saw and some sandpaper can make these things for $5
Corse its a lot more lucrative when you polish it up with an LED. The cost for a bright blue LEDs in bulk are ~$.10 - $.16 each with resistor. Solder that to a female type-B USB port (about $.52 each once you top 1000 units) Drill a hole, stick the LED/port assembly into the hole, tab it with some epoxy and package a cheap A->B USB cable (worth $.50-$1.50) For $1.25 to $2.25 you up the profits by another $8 and all of a sudden you're making an easy $25,000 - $30,000, not counting labor, on 1200 units. (My final profit was $27,236, not counting shipping, labor, or anything other than material costs)
I understand why these things are made - they're not labor intensive, they still look great, and works with all the Mac Mini's out there. I don't get why people buy these things or why they make a big deal about the merits of buying computer accessories
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