

Ask HN: Is price of one Dropcam($149) overpriced? - throwawayacct10

I made some preliminary estimates and found that drop cam bill of materials (BOM) should be less than $50 (camera sensor is about $13). Why is Dropcam $149? Are they marking up the price or am I missing something in BOM? Also, if they are recording for seven days...they must be uploading 1TB&#x2F;day. Do you think that&#x27;s really possible?<p>I believe dropcam price can be much lower but they choose to mark-it up. I would like to know from knowledgeable folks here if I am right.
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wmf
Once you consider ~30% retail margin and ~30% gross margin for Dropcam
themselves that only leaves a COGS of ~$75. That's not particularly
overpriced.

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throwawayacct10
I see it now. Thanks very much.

But isn't 30% a lot of margin in hardware? Even software companies nowadays
have problems with that margin.

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wmf
Gross margin is used to pay back your NRE, so net profit is lower.

