Shmoocon 2017: The Ins And Outs Of Manufacturing And Selling Hardware

Every day, we see people building things. Sometimes, useful things. Very rarely, this thing becomes a product, but even then we don’t hear much about the ins and outs of manufacturing a bunch of these things or the economics of actually selling them. This past weekend at Shmoocon, [Conor Patrick] gave the crowd the inside scoop on selling a few hundred two factor authentication tokens. What started as a hobby is now a legitimate business, thanks to good engineering and abusing Amazon’s distribution program.

The product in question is the U2F Zero, an open source U2F token for two-factor authentication. It’s built around the Atmel/Microchip ATECC508A crypto chip and is, by all accounts, secure enough. It’s also cheap at about $0.70 a piece, and the entire build comes to about $3 USD. All of this is hardware, and should be extremely familiar to the regular Hackaday reader. This isn’t the focus of [Conor]’s talk though. The real challenge is how to manufacture and sell these U2F dongles, a topic we looked in on back in September.

The circuit for this U2F key is basically just a crypto chip and a USB microcontroller, each of which needs to be programmed separately and ideally securely. The private key isn’t something [Conor] wants to give to an assembly house, which means he’s programming all these devices himself.

For a run of 1100 units, [Conor] spent $350 on PCB, $3600 for components and assembly, $190 on shipping and tariffs from China, and an additional $500 for packaging on Amazon. That last bit pushed the final price of the U2F key up nearly 30%, and packaging is something you have to watch if you ever want to sell things of your own.

For distribution, [Conor] chose Fulfillment By Amazon. This is fantastically cheap if you’re selling a product that already exists, but of course, [Conor]’s U2F Zero wasn’t already on Amazon. A new product needs brand approval, and Amazon would not initially recognize the U2F Zero brand. The solution to this was for [Conor] to send a letter to himself allowing him to use the U2F Zero brand and forward that letter to the automated Amazon brand bot. Is that stupid? Yes. Did it work? Also yes.

Sales were quiet until [Conor] submitted a tip to Hacker News and sold about 70 U2F Zeros in a day. After that, sales remained relatively steady. The U2F Zero is now a legitimate product. Even though [Conor] isn’t going to get rich by selling a dozen or so U2F keys a day, it’s still an amazing learning experience and we’re glad to have sat in on his story of bootstrapping a product, if only for the great tip on getting around Amazon’s fulfillment policies.

Akiba: Shenzhen in 30 Minutes

Multi-talented hacker extraordinaire and electrical engineer [Akiba] is based in Japan, and this makes it just a hop, skip, and a jump over to Shenzhen, China, the hardware capital of the world. He’s led a number of manufacturing tours aimed at acquainting hackers with the resources there, and now he’s giving you the benefit of his experience in a 30-minute video. It’s great.

Continue reading “Akiba: Shenzhen in 30 Minutes”

Taking a U2F Hardware Key from Design to Production

Building a circuit from prototyping to printed circuit board assembly is within the reach of pretty much anyone with the will to get the job done. If that turns out to be something that everyone else wants, though, the job gets suddenly much more complex. This is what happened to [Conor], who started with an idea to create two-factor authentication tokens and ended up manufacturing an selling them on Amazon. He documented his trials and tribulations along the way, it’s both an interesting and perhaps cautionary tale.

[Conor]’s tokens themselves are interesting in their simplicity: they use an Atmel ATECC508A specifically designed for P-256 signatures and keys, a the cheapest USB-enabled microcontroller he could find: a Silicon Labs EFM8UB1. His original idea was to solder all of the tokens over the course of one night, which is of course overly optimistic. Instead, he had the tokens fabricated and assembled before being shipped to him for programming.

Normally the programming step would be straightforward, but using identical pieces of software for every token would compromise their security. He wrote a script based on the Atmel chip and creates a unique attestation certificate for each one. He was able to cut a significant amount of time off of the programming step by using the computed values with a programming jig he built to flash three units concurrently. This follows the same testing and programming path that [Bob Baddeley] advocated for in his Tools of the Trade series.

From there [Conor] just needed to get set up with Amazon. This was a process worthy of its own novel, with Amazon requiring an interesting amount of paperwork from [Conor] before he was able to proceed. Then there was an issue of an import tariff, but all-in-all everything seems to have gone pretty smoothly.

Creating a product from scratch like this can be an involved process. In this case it sounds like [Conor] extracted value from having gone through the entire process himself. But he also talks about a best-case-scenario margin of about 43%. That’s a tough bottom line but a good lesson anyone looking at building low-cost electronics.

iPad teardown

Its been quite a while since we’ve featured something from iFixit. But when we saw they had torn apart the next greatest Apple product, the iPadreleased today, and how everyone on our team loves it, we thought why not also let our user base enjoy the destruction informative teardown as well.

In both the original and the FCC teardown, we see some awesome features and tricks Apple implemented. Most notably the two separate 3.75V lithium polymer cells, not soldered to the motherboard, allowing users to easily replace the battery if need be. However, in the opposite respect, more components than ever are being epoxied to the board, making the iPad much more rugged.

We’re left wondering, with everyone able to see the beautiful insides, does it change anyone’s mind on getting an iPad? Or would you rather make your own?