Costs
On this page, you can find how we established our aksing price and what our service will cost.
The total cost can be divided into three parts, the costs for hardware, software and rest (consisting of for example licensing costs and the website).
For the hardware, components like the e-ink screen and lithium ion battery boost the cost, which comes out at a production cost between €85,- to €150,-.
The software consists of, for example, cloud services and data management. Further costs include those for website development, content management, distribution, customer support and marketing. It also includes the licensing for books, which account for a large amount of total costs. This is why we decided to offer a limited number of readers per class. By reducing the amount to 5 kids reading the same book per class, it would reduce the licensing costs to approximately between €50,- and €200,- per e-reader. The total costs add up to between €110.000,- and €240.000,- + licensing costs.
Seeing as our target audience consists of about 750.000 kids (ranging from 8 to 13 years old) [1], and we would realistically be looking at only 1-5% of that, our price would be quite high in the beginning. Using a retail markup of 2-4 times our COGS [2], we would end up with an initial €300-€500,- for the e-reader itself, and an annual subscription between €100,- and €300,-. This price could alter throughout the years, as we grow as a company and make deals with educational companies, the government and manufacturers.
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[2] https://predictabledesigns.com/how-to-price-your-new-electronic-hardware-product/
