An interesting study in economies of scale

December 31, 2012 at 10:58 pm Leave a comment

It’s been shown through empirical evidence recently that small batches of some types of product are economically viable, and unlock a class of  potential items that would not otherwise be available because of their below-mass-market appeal. Kickstarter has definitely exposed this reality, especially in the technology section where it is possible to see consumer / prosumer / enthusiast devices being offered in volumes that are measured in the 100’s, not millions. I just can across this interesting study from Octopart that shows the total cost of a product containing a spectrum of sourced parts as a function of volume, and it’s clear that the point where scale pricing really kicks in is rather early. The study is well worth a read for anyone considering the prospect of a specialized device that might only have a market measured in 1000’s rather than millions.

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