Pet project vs. real world economy

Pet project vs. real world economy

Some time ago, we started to sell the RaspBox, an acrylic glass enclosure for Raspberry PI, these little computers worth $25 of the size of a credit card. This enclosure was sold at a very small price (CHF 8.50). But here we are, we are going to have to raise its price (a lot), and we thought that we should at least tell you why.

For the record
Unlike our usual products, the RaspBox project wasn't planned beforehand. When we received our own Raspberry PI, it was quite clear that we needed an enclosure for the board to survive in the middle of our test lab. A SolidWorks and laser cutting session later, we had an acrylic glass enclosure. We put our Raspberry PI inside. Problem solved.

The RaspBox enclosure for Raspberry PI. The road to Hell is paved with good intentions...
The RaspBox enclosure for Raspberry PI. The road to Hell is paved with good intentions...

After a while, we noticed that this enclosure answered the Yoctopuce quality requirements: simple, practical, and stylish. We thought that if we were happy with it, it would certainly please others as well, and that there was there an opportunity to make us known from the Raspberry PI community.

So we decided to transform it into an advertisement project: we counted our costs for raw materials, rounded up, put the RaspBox on sale at this price, and we posted an ad on the Raspberry PI forum. To be honest, we didn't think we would sell many.

Shipping costs
Now, we need to tell you about our shipping costs. If we believe the comments posted on several forums, many people find them very high. It's true that our shipping costs are expensive. But the sad truth is that shipping goods to foreign countries costs a lot. MasterCard and VISA require that we can prove that the goods have been delivered. This prohibits using simple mail and forces us to use registered mail. For many countries, registered mail is not enough, and we have to ask for an extra return receipt, which increases postage. At the end, a letter or parcel above 100g in Europe costs us more than EUR 13. Besides postage costs, we must add packaging and labeling: you could think that packaging is only a few cents, but that's not the case, packaging can reach several francs. And that's without counting a single cent for the work of the person doing the packing itself.

We wanted shipping costs to reflect the Yoctopuce philosophy: fair, simple, and easy to understand. Therefore we choose to have only three rates, depending on the destination: Switzerland, Europe, and World. For some countries, we make a little money on shipping, for others we lose some, but all in all it's even. Although "tight", these shipping costs stay high, and there is nothing we can do about them. The best way to save on shipping costs is to buy several products at the same time. Therefore, we decided to offer free shipping for commands of CHF 100.- and above. This limit was computed on the basis of the mean profit made by Yoctopuce on the sale of a module.

Let's come back to our RaspBox. Notwithstanding shipping rates largely above the product selling price, a few persons ordered the RaspBox and let their satisfaction known on Raspberry PI forums. This created a snowball effect: demand increased rapidly. To solve the shipping cost issue, some customers grouped their commands, others decided to be bold and ordered large quantities of the RaspBox to resell them from peer to peer in their own country. This technique allowed them to benefit from free shipping costs, which, in theory, made everybody happy. But these is a catch.

Overtaken by reality
Remember: the RaspBox started as an internal project which was transformed into an advertisement project, it is sold close to cost price without even counting the labor costs necessary for producing it. Which means that if we offer shipping Yoctopuce loses money: the RaspBox is a heavy product (55g without packaging), shipping costs to send them by registered mail by whole boxes have nothing in common with those of shipping a 4g module in a cardboard envelop. Yoctopuce agrees not to earn money now on then for a publicity drive, but we can't afford to do it on the long term, unfortunately.

We had to make a decision: we could either purely and simply stop producing the product, with the risk of disappointing customers who haven't got one yet, or raise the price of the RaspBox to make it economically viable (CHF 14.50). We selected the second option, which also allows us to keep our promise to the Raspberry PI Foundation: to send them part of our gains in exchange of the right to use their logo on the RaspBox. At Yoctopuce, we like to keep our word :-)

Moreover, to show that we are not fooling you, we have decided to freely distribute the design and the files necessary to build the RaspBox, under a Creative Commons license. In this way, everyone is free to build this enclosure on its own, and sell it at the best possible price.

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