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Comment by mcpherrinm | Hacker News Reader

$5: probably doable. An esp8266 dev board goes for $2 on AliExpress. That leaves $1 for plastics and $2 for a lipo battery.

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If you wanted to make it for yourself. A general rule of thumb I've heard several times for makers is to retail at 4x the cost of goods sold - else your business is unsustainable. So for a 5$ retail price you'd have to be somewhere near $1.25 COGS. Going the otherway - 19.99 for a 5$ COGS is perfect.

That's zero margin for Amazon though and no budget for assembly. If the materials cost is $5 then $10 is the absolute lowest you could probably hope for. $15 is a more sustainable (profit generating) product.

If you're talking price point $5 would be $0 profit by that bill of items.

Was the original/intended purpose to always sell them at cost and make the profits up through increased sales?

Being tangentially involved in this project it was my understanding that the devices were financed in large part by the marketing departments of the brands that had buttons, which is why they were tied to brands.

"We lose a little money on every customer, but we make it up on volume." :-)

I think in Amazon's case it was just experimentation with a sunk cost. Based on the discussion above it looks like it's impossible to form a company to sell these to turn a profit, at least in the dash button form.

The original purpose of the “hackable” button was to give a fun piece of experimentation kit that worked with AWS and encouraged people to try it out. I set up my AWS account just to use one.

> If you're talking price point $5 would be $0 profit by that bill of items.

negative profit when you count assembly.

The actual dash buttons (including the IoT ones) don't use lipo batteries, they use a primary cell. So you can probably shave a bit off there.

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