From Project To Kit: So You Want To Sell Electronic Kits

Many of us have enjoyed building electronic projects that come not from our own inspiration or ingenuity but from a ready-made kit. It makes sense, after all in buying a kit you should receive a tried-and-tested design that you can assemble without some of the heartache associated with getting a self-designed project right. And though in recent years the barriers to entry into the professional PCB market for small projects have lowered significantly, there is still an attraction to a kit that comes with a decent PCB and case.

The kit version of the Sinclair ZX81 microcomputer. By Smaddison (Own work) [CC BY-SA 3.0], via Wikimedia Commons.
The kit version of the Sinclair ZX81 microcomputer. By Smaddison (Own work) [CC BY-SA 3.0], via Wikimedia Commons.
If you start your electronic odyssey through kit-building, you gain more than a set of electronic projects. You learn about the circuits you build, and you gain a feel for how a well-designed project should go together. Eventually this feeds into your own projects, and in time you are producing builds that equal or surpass those you can buy as kits.

From the point of having a nicely executed project to that of wondering whether it too could be sold as a kit is not a huge step. This is the first of a series of articles that will examine the kit manufacturing process from project to customer, and will with luck deliver some insight to those of you who have always wondered whether you could make it as a kit vendor.

So, you’ve had an idea, and you’ve made a project. It’s sitting on the bench in front of you, and you’re thinking “Other people would like to build this, I could make some money from it!”. What next?

Don’t Quit Your Day Job

The first thing to understand at this point is that there is a need for realistic expectations about your likely success. People will want to build your kit and it will bring in some money, but until you have built up a customer base and a range of kits with a lot of hard work, it won’t bring in much money. Enough to finance your future projects which you will then turn into fresh kits, enough to pay for tools and test equipment, but probably not enough in the medium term to enable you to give up your day job. That’s an achievable goal in the long term with sufficient effort, but not one you should expect to happen soon.

If you haven’t been disillusioned too much by the previous paragraph, how about the project you would like to turn into a kit? Have you done your market research, and do you know what will make it a kit people will want to build? The answers from the first question will tell you whether it’s worth proceeding with the idea, and those from the second will ensure that your customers tell their friends and come back for more.

You will need to become an expert on your particular part of the kit business. Who are the other players, and what are their product lines and price points. If your kit is substantially similar to that offered by an established competitor, ask yourself whether it really offers anything that differentiates it enough to tempt customers to go with an unknown new supplier like you over the name they are familiar with.

What are Others Doing?

Taking an example from the real world, imagine yourself to have produced an educational LED board for the Raspberry Pi. If you take  a look at that particular market, it will show you multiple similar offerings from different companies. These boards have the advantage of being very cheap to develop, but you would have to ask yourself whether it is worth entering such a crowded arena.

You will also have to pay close attention to the prices your competitors’ kits are selling for. We will cover kit pricing in detail in a future article in this series, but it should suffice to say that you should calculate very carefully every aspect of your own costs and expect your final figure to be significantly different from the mere retail cost of the components. Knowing the cost of producing a kit yourself should give you some idea of your competitors’ economics, and also an insight into their likely success or failure. Sometimes you will discover other kits that are evidently overpriced, while with others there may be an obvious reason why another kit is cheaper than you can hope to make it. Chinese kit suppliers for example have access to components at a price small European or American operations can’t touch.

This detailed knowledge of your marketplace will help you decide whether your proposed kit fits a niche in both product sector and price that you can exploit. If the last few paragraphs have poured cold water on your dreams it’s worth remembering that bringing a small electronic kit to market is likely to cost you a high three-figure sum before you’ve sold a single kit, so it’s worth ensuring that your product has a chance of success before risking any of your hard-earned.

Refine, Refine, Refine

So if by now you’re still on board, your kit has a market niche open in front of it and you have concluded you can make and sell it for a reasonable price, well done! Now, take a moment to think about what makes a good kit.

The G1 signal generator, Heathkit's first kit, from 1948. By Jeff Keyzer [CC BY-SA 2.0], via Wikimedia Commons
The G1 signal generator, Heathkit’s first kit, from 1948. By Jeff Keyzer [CC BY-SA 2.0], via Wikimedia Commons.
If you ask people about the kits they have built, and in particular the ones that they thought were the best, the same names will start to appear time after time. Heathkit in their earlier incarnation, Ramsey, or maybe Howes if the person you are asking is British. If you ask them why this is the case, they will often talk about the quality of the instructions and the ease of building, though what lies behind those descriptions is that the kits worked for them, and that the components they came with fit together and were of high quality. This package of ready buildability, good instructions and quality components is vital for your kit to achieve, for it will be what gives you an edge over its competitors. Some of the Chinese kit manufacturers for example might seem unbeatable on price, but when what tumbles out of the bag is a mix of dubious components, a poor quality PCB, and laughably poor English instructions, you might begin to see how paying attention here can make your kit a winner. It can even be something that allows you to position your kits as a premium product if you get it right, even if it could be said that some suppliers stretch this premium a little far.

We’ve looked in this article at the background of launching an electronic kit business, considering market research and what makes a good kit product. In subsequent articles in this series we will go into more detail on an individual kit. We’ll take a simple circuit design and look at the economics of transforming it into a kit before examining in detail how best to present it and how to give it good instructions. Finally we will cover kit sales, how to put a kit on the market, and how to best serve your customers. If you feel you have a good kit in you, we hope this whets your appetite for more. We hope that in time we’ll see your kits and maybe build them ourselves.

40 thoughts on “From Project To Kit: So You Want To Sell Electronic Kits

  1. Mistake #1
    Trying to sell to frugal people with no money.

    Mistake #2
    Competing for a country specific price point that can have a 100% labour subsidy under communism.

    Mistake #3
    Trying to convince people they can get ahead if they just work harder, sacrifice more, or rip off their peers.

    I fully agree that making kits will fail if all three mistakes are made.
    However, it worked for Apple, Sparkfun, and HP…
    ;-)

          1. “Maybe you could offer a kit construction service? For a small fee we will put together your kit for you! :D”
            Europe -> WEEE -> Germany -> Shitty Stiftung EAR
            So, no, such service would be undoable over here sadly. :(

    1. Yah, seems that that shiny new part that you dick around with for 2 years before grokking it’s ultimate use can go unobtanium/depreciated by the time you unleash your design on an unsuspecting world.

    2. “Open source” hardware has always been vague, since in the old days many a project was described in construction article. You could do as you please with it, but trying to sell it likely would cause problems.

      But then, it increasingly happened that one could get a kit. Initially helpful thing, as the projects got more complicated, the kits became more important because some parts were hard to get. And then at some point the nominal construction articles were more a lure to the kit, little expectation that few or any would build from scratch, but at least you could see the schematic and instructions up front.

      You’re right, now the projects are so esoteric that “open” means little since you aren’t likely to be able to build without the kit, and some things (like those “open source” laptops) have no real advantage since you won’t be able to get the specified parts much later. Yet if one else puts a kit together, that’s seen as “poaching”

      Michael

    3. This is exactly what we try to accomplish on https://www.openhardware.io (a community for open source hardware). But kit prices still becomes too hight when our manufacturing partners source them one at the time.. I need to put some effort into some mini-crowd-source function so they can source something like 20 kits at the time.

      Well, hope to see more open source hardware projects on board so we can get more attraction/competition on the manufacturing partner side. Would help.

  2. There’s a scary lesson to be learned from the current owners of the Heathkit brand. They have the best name in the market, but it took them more than two years to come up with a couple of unwhelming, expensive kits.

    1. I would posit that Heathkit’s recent problems are because the current company owning the name started with eactly that: a name. Only after acquiring the name did they attempt to become a kit company.

      The problem is, even with all of the IP for the old kits I double they could get all the parts today. Even if you could guarantee sales by reproducing the most popular kits from the old days you’d need to do a ton of redesign work to start producing them again.

      1. They do also have a couple of repair/upgrade kits for common failure points on popular old Heathkit items where the original parts are either unobtainable or modern replacements are better.

        One part of the business I’d like to see them focus on is re-introducing some of the old Heathkit kits that are still relevant and usable today.

      2. You’ll all note I very carefully stuck to Heathkit’s original incarnation above. The current offering is such a missed opportunity. Strangely I rather like the little TRF radio, but not in any way at that price.

        I think it would be a bad move for them to try to recreate past glories by resurrecting old kits. It’s not difficult to design new kits, and it’s not difficult to do so with components that are easy to source. I think Mike has it when he says that they needed to learn to be a kit company, and their misfortune was that they were not lucky enough to be protected by obscurity.

      3. Yes, they think the name is what matters. Someone claimed to be resurrecting “Popular Electronics” some years back, claiming to have spent money to get the name, thinking it was important when it was the essence of the magazine that mattered.

        Heathkit was important because they made kits that anyone could assemble. That mattered, since they could broaden the line and sell to anyone willing to spend the time putting the kit together. So the company wasn’t just selling to hobbyists. They put a lot of effort into the instructions, and would preassemble stages when necessary (because they might offer some problems or needed alignment that the average person couldn’t do. Or they’d include some extra bits to make alignment easy; there was a radio scanner that included some extra parts to make an oscillator and mixer, to create a signal generator for front end alignment when mixed with the scanner’s local oscillator. Some if the tv sets had rudimentary multimeters on the back, useful if that was the only kit you built.

        But the kits weren’t an end in themselves. They were real products, that people wanted. So you could get that organ at a lower price by buying the kit. You could get test equipment cheaper too. They weren’t novelty items to sit on a shelf once assembled.

        There are companies who have been selling kits all along, though Ramsey left the business at the start of this year. To say “nobody makes kits anymore” is to not be paying attention. I suspect many don’t match Heathkit instructions, expecting the customer to be somewhat capable, and while many can be somewhat useful, somehow the end product often seems more bout building the kit than having the product. But that may reflect the times, too expensive to out a complicated kit. But that’s why Heathkit left, it was harder to have kits that matched real products.

        Michael

        1. Yeah, I somewhat recall the demise of popular electronics, it turned into a “buy this” publication, its hobbyist market fled to publications like Elektor Electronics which had projects.

          True thing on the kits though, they were the product of an era, retail on a TV might have been $400 when you could get a kit for $200 and learn something. Sometime around the late 90s it all fell apart, with things getting cheaper than even small order component cost. Although, something was/is wrong with where things went after that, the simpler introductory and educational kits where a basic “blinky light” type project kit cost $30… even at Radio Shack bubble packed component prices you could throw one together for less. Well, could, Radio Shack is indistinguishable from any other black box electronics retailer now.

          1. Surface mount killed Heathkit. It’s now vastly cheaper to build a product on an industrial scale than it is to produce a through-hole kit for the same thing.

            At the time the lines crossed back in the 80s, I foresaw the death of the home hobbyist electronic prototyping and abandoned it. Turns out I just needed to wait 20 years for technology to catch up.

  3. I never knew the ZX81 was supplied as a kit. I wrote my first program on the ZX80. It asked your name and age and repeated it. I was only 12, it had 1k of ram and it was 1980. My software is a bit bigger now……..

    1. My first home computer was a kit form ZX81, it was waiting for me when I can home from school, I built it, it worked first time, I was up until 4am typing in programs from magazines that night!

      1. We were all lah-de-dah and got the Spectrum.. but 3 or 4 years later when ZX-81 were a quid at the fleamarket or car boot sale, I got several “lab rats” and killed them in various ways. Mostly trying to add ram, external keyboards, or just dying from being revision 1A Sinclair quality… and those freaking regulators with the stamped sink….

      1. You know why they were hilariously enormous even for the time right? They bought chips with errors in for cheap and used the half of the chips that didn’t. So double the chips.

      2. TheZx-81 rocked for its price. I was writing code watching the interpreter paste small font numbers on my color TV in my college apartment. Sieve of Erastothenes and the lot of things to write on a flat dome caps switch keyboard were fun, but tedious to enter. The Commodore 64 changed all that
        I am glad I kept them. But, building Steve Ciarcias Z80 computer from scratch using wire wrap taught me the most about computers. Entering hex code on a 4×4 keyboard and saving it to a cassette tape player -1200 Its fora I and 2400 Hz for a 0 – brings a whole new appreciation for the computer of today
        Still have that one somewhere

        1. Amen. I enjoyed programming 8 bit computers in assembly, but I’m too old for that **** now. Gimme C++ on a 200MHz PIC32 and don’t talk to me about optimizing my jump instructions: I don’t care anymore.

  4. I have kitted a couple of my projects for the local Amateur Radio club. Although these were runs of only 10 kits, the time involved was much more than I had thought it would be. Between getting all the parts together, writing instructions and other documentation took a very long time. Even though the members that got the kits were experienced kit builders, there were many more support questions than I thought there would be. All in all it was fun, but I would not want to try to do a large run of kits. As far as pricing the kits, I just wanted to cover my costs, and recover the cost of the parts I used in my prototype.

    1. One of my first engineering classes ever the prof clobbered us with the importance of documentation, and figuring out how it coud be read and understood incorrectly by somebody. That and patent claims, talk about figuring out any possible weasle wording.

    2. This is why I prefer running workshops at hackerspaces to selling kits. I can correct any errors and answer any questions immediately, and everyone walks away with working hardware. It doesn’t scale as well, but on the other hand I don’t have to compete so much on the cost front since I’m selling a workshop, not a bag of parts.

      It was a good way to fund my projects, bring interesting people to the hackerspace, and was a lot of fun too.

  5. I don’t see kits becoming a thing the way Heathkit was a thing when I was a teen (back in the 80s – I watched the concept die). The reason is SMT. It’s faster and cheaper to build a surface-mount board than it is to fulfill a through-hole kit. I know this because I do both, and I’m not even using a PnP machine for the former.

    Now, you can sell what I call a “quick kit” (I actually stole that term from Chris Howell, the guy who does OpenEVSE) – which is a board with all the SMT components populated, but the through-hole parts merely supplied for final assembly, but you’re obviously not going to be able to do that at a tremendously different price-point, and are people really going to feel like “they built it themselves” the same way they did when they finished building a completely through-hole Heathkit TV?

    I had hoped that Heathkit would try and bring the electronic design and construction hobby into the 21st century by embracing home reflow and perhaps marketing a new line of microcontroller prototyping boards – perhaps they could be the Arduino for PIC. I still say there’s a place in the market for a Heathkit branded purpose-built reflow oven – particularly one that could do a proper RoHS profile (preferably on 1600 watts or less @ 120V). Unfortunately all signs point to the current Heathkit as being run by MBAs who are treating the brand as an asset.

  6. Spot-on article, especially leading with the “don’t quit your day job” bit. I recently decided to do a kit run of 100 units for the XT-IDE rev 3 project (if you got blue boards, they came from me). Having “kitted” projects for work, I sort of at least knew the headache I was getting myself in to on the logistics and inventory side. It met my modest expectations of, “don’t lose money” but I’d have to be doing many times the volume of my preorder + regular sales to call it a full-time job.

    My biggest tip to anyone offering any kit/board/whatever: KEEP ON TOP OF COMMUNICATIONS! Too many hobbyist-led kit efforts have failed because real life kicked in and the kit supplier stopped answering their emails, or the time between payment and shipping grew to the point that people thought they had been swindled.

  7. Glitch, your comments are right on. Two things make or break success in my opinion. 1) poor documentation (all too common) and 2) lack or support / response from supplier. Some people are great… as some of my Tindie experiences with kits have been superb. Others… not so much… (as in, they sold about 80 units and went poof! before I even got questions answered)

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