Selling an Open-Source Hardware Product on Tindie

Screen Shot 2014-06-12 at 08.35.47Going from an idea for an hardware product to actually making money from it can be a long process. You need to go through design, manufacturing, build a website to sell it … the length of the process can really be a reason not to start for many people. However, thanks to a lot of tools that are available nowadays, it is getting easier and easier to have a tangible product on sale on the web.

In this article, I will guide you through my own process of selling an open-source hardware product. And to do so, I will use the amazing platform Tindie. Tindie is a platform that was designed to make it really easy to sell open-source hardware products that are made in small series. Therefore, it is the perfect platform for makers. I will guide you through the different steps I am using for all my open hardware products: getting the initial idea, designing the product, building it, and then selling it on Tindie. At the end of this article, you will be able to replicate the process to design, build and sell your own products. Let’s dive in!

Solving an Existing Need

All hardware products start with an initial idea. And a good idea solves a particular need on the market. In that case, it was my own need on an home automation project. In entrepreneur terms, that’s called “scratching your own itch”: creating a product or service that solves a problem you are having yourself. It is a good approach because probably other people will have the same issue as you do, and they might turn to your product if they didn’t find anything on the market that solves their problem.

While developing a new home automation tutorial for my Open Home Automation website, I encountered a problem: I wanted to build a WiFi controlled smart plug, but I was missing the power supply. I didn’t want to use a battery that will be depleted after some days, but directly use the power available in the plug. Problem: these plugs are 110v or 230v AC, and a typical microcontroller (here, the project is based on Arduino) uses 3.3v or 5v DC. I didn’t want to use an external power supply, but to integrate everything in a same casing. There are cheap power supplies on the market, but there were either too big, unsafe (a lot of exposed components) or not powerful enough (the WiFi chip I used can require up to 300 mA of current). That’s why I decided to do my own design to solve this problem.

Designing the Product

Once I got the idea, I started designing my product. The first thing I had to do there was to define the complete specifications of the product. I wanted a board that would take 230v or 110v AC voltage on one side, and deliver 5v and 3.3v on the other side, with a power of 2.5W so it can power up energy-hungry components like a WiFi chip.

The second step was to chose the components. I had two choices here: either design my own power supply, or use an existing module. The first step implied to use a transformer, a diode bridge rectifier and other components to transform the voltages. However, after some research I found that there could be legal issues with this solution. Indeed, the design would have to be approved before it can be sold, as the input AC voltages are dangerous. Therefore, I went for the second option: use an already existing AC/DC module. After some research on the Farnell website, I found the following module with a 5V output:

http://uk.farnell.com/myrra/47122/power-supply-2-75w-5vdc/dp/1825773

After that, I just built a simple circuit around it: headers for the input and output, and a voltage regulator to get 3.3v from the 5v output of the AC/DC module. To do so, I used the design software EAGLE. This is the result in EAGLE:

Screen Shot 2014-06-12 at 08.39.16

It was also easy to create a simple board from this schematic:

Screen Shot 2014-06-12 at 08.39.01

Last step before manufacturing the board: as it’s an open-source hardware product, I uploaded the EAGLE files to GitHub so everybody can use them:

https://github.com/openhardwarelabs/arduino-power-supply

Manufacturing and Testing

The next step is to actually build the PCB and assemble the product. For the first part, I use the services from OSH Park to build the PCB. I personally really like their services as they are cheap, fast, and they have an app on their websites that accepts EAGLE board files directly. This avoid the pain of having to export your design to Gerber files. You can also preview your board online on their interface:

Screen Shot 2014-06-12 at 08.47.10

I ordered some PCBs from their website, and after 2 weeks I received the PCBs:

IMG_8053

For the components, I simply went to my local Farnell element14 website to get them. After some soldering, I had my first board ready:

IMG_8033

Finally, I tested the board. After some early test to check that the output voltages were correct, I also plugged the board in my own project and successfully powered my smart WiFi power plug with it! As I knew that the board was functional, I assembled ten more and tested them. They were now ready to be sold. I like to make small series first, so I am sure there is a market for the product.

Selling the Product on Tindie

The last step was to put my product on Tindie so people could buy it. But before that, I took time to shoot some really nice pictures of my board, using my Canon EOS Mark II and some good lighting. Of course, you can take pictures of your product with just your phone, but when it comes to selling a product the picture really matters as it is the first thing the client will see.

It is now time to actually put the product on Tindie. If it’s not done already, go over to the Tindie website to create an account:

https://www.tindie.com/

From there, it is really simple to sell your product via the “List a Product” page:

Screen Shot 2014-06-12 at 08.45.34

You can insert the description of the product (I chose to stick to Tindie’s guidelines), the pictures, some other information, and … the price. Pricing an open-source hardware product is actually the topic of an article on its own on this website, but I will remind you of some key points here. This is really important. I know from experience that as a maker you want to use the lowest price possible just to cover your costs, but this is not a good business strategy as you can’t grow without having good margins.

So for pricing, my simple advice is to know precisely your total costs (components, PCB fabrication, eventual packaging) and apply your markup on this. I usually never go for a markup inferior to 25 %. For example, if your total costs are $10, with a markup of 25% it would mean that you will sell your product at 10 x (1+25/100) = $12.5.

In the case of my product, I had a total components costs of $27.9 (Yes, these AC/DC modules are expensive!). I applied a 50% markup on this, and ended up with a sale price of $39.9. I also calculated my profit margin on this product, which was equal to 30.1 %. This is what I ended up with on Tindie:

Screen Shot 2014-06-12 at 08.35.47

And for the marketing part:

Screen Shot 2014-06-12 at 08.36.05

You can check the product on Tindie here:

https://www.tindie.com/products/marcoschwartz/110v-230v-to-5v-and-33v-converter-board/

Also carefully consider the shipping options: it can completely kill your profit if you are wrong in your shipping costs estimates, so be sure you have the correct numbers from your shipping company before entering any number.

However, your job is quite from being over. There are lots of products on Tindie, and it can be difficult to stand out … over there. You now have to use all your marketing channels available to promote your product. This is why I always recommend to build an audience first before selling your product. If this is not done yet, it might be a good time to start.

For example, create a simple website to promote your product, and have a few blog posts showing people how to use your product. Then, engage people with social media accounts (Facebook, Twitter) and create a mailing list so people can subscribe to your updates. These channels will all be really useful to share the link to your Tindie store, and therefore promote your product much more efficiently than just having it sitting on its own on Tindie.

The Process to Have Your Own Product on Tindie

To end this article, I wanted to give you a short version of the process I am using to develop a new open hardware product to be sold on Tindie, from the idea to the marketing & sales of the product:

  • Get an idea that solves a problem. For example, solve one of your own problem.
  • Chose the components for your product, and design the PCB. And don’t forget to share the design.
  • Manufacture the PCB, order the components, and then build & test the product. Make a small series first to test the market.
  • Put your product on Tindie with nice pictures and a good description. Use your marketing channels like social media to promote your product to your audience. Or start a website and build an audience if you don’t already have one.

I’d also like to hear your thoughts on this process! Do you have your own process to create and sell an open-source hardware product? Did you have good/bad experiences with Tindie? Please share in the comments!

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