Now is quite possibly the most exciting time in history to be a hardware developer. There are a ton of great deals online if you know where to look.
A Case Study - Cheap Wireless
Let's take a recent project I worked on as an example of what I'm talking about. I needed some basic wireless capability - nothing more complex than sending a byte a few feet over the air. Bluetooth LE and a few proprietary wireless chips seemed like good options. The only downside: the established open source hardware vendors didn't have any affordable options. A pair of transceiver modules through Sparkfun started at $40. Adafruit was just a little worse, with modules running $45 and up. What gives? If you take a look at one of these chipsets on Digikey, you'll see that Nordic Semiconductor nRF24L01+ chips sell for $1.61 in bulk. What’s the disconnect here? Why are Adafruit and Sparkfun so danged expensive?
A $20 SparkFun transceiver module
A Brief Word About Modern Supply Chains
As you probably know by now, manufacturing for most, if not effectively all, consumer electronics happens outside of the US. Most of it is in China. Way back in the early days of the Chinese manufacturing boom, it was solely because of cheap labor: parts would be shipped in as components or subassemblies, and shipped out as finished goods for sale. Eventually, the component supply chain ended up in Asia as well for largely the same reasons: access to cheap labor, both unskilled and skilled. Now the raw materials to make electronics are in China, with massive factories that exist to churn out millions of them a year. As a result, China has economized both of these things to their maximum potential. Add this system to open source designs, and you can find whatever you want being built in China, at a fraction of the cost.
OSHW Vendors as a Catalog
Adafruit and Sparkfun are both very good at designing unique boards. They both have a distinguished track records of bringing high quality OSHW devices to the public and are generally racing each other to see who can come out with a board featuring a new chipset first. They also happen to be designed and built in the US. This, naturally, comes with higher labor and material costs. However, all of these devices are open source: their design files are available for free on the internet.
As Nathan Seidle, founder of SparkFun, mentioned in his TEDx Boulder talk: “Our products have twelve weeks, on average, before they are copied.” That’s brutal for SparkFun, but great for us! Let’s return to our earlier case study. A quick eBay search reveals that the nRF24L01+ module that Sparkfun offers for $20, plus shipping. A quick search of "nRF24L01+ module" on eBay turns up a wealth of other options. Take eBay vendor Axeprice for example - you can get ten nRF24L01+ modules for ten dollars - and free shipping! This is absolutely due to leveraging the economies of scale allowable by contract manufacturing. A quick eBay search can save you big bucks.
10 wireless tranceivers for $9.99 on eBay
Buy in Bulk
Most contract manufacturers care about volume and volume alone. When products are mass produced, one-time costs like tooling and line setup asymptotically approach zero. This is the reason Sparkfun and Adafruit make such expensive products - because they are newer, they tend to make them in smaller quantities. As a result, they have to pay the upfront tooling and setup costs, which can be tens or hundreds of thousands of dollars, for batches of products that could be in the hundreds or thousands. When you start distributing that cost across tens or hundreds of thousands of products, the costs start to make much more sense. This same logic applies to open source hardware: the more of them you make, the cheaper you can make them!
How Risky is It, Really?
Most of these deals, with their vaguely sketchy photography and eBay seller pages, probably have you asking "Is there really a factory somewhere in China that will take $8 for a bag of 500 assorted-color LEDs?" The answer is an emphatic “Yes!”
I won’t deny that scammers do exist on eBay. I've had some money vanish down the eBay rabbit hole, never to return. My personal take on buying electronics on eBay is to think of it as a form of low stakes gambling. Is it worth eight of your hard earned dollars to find out if there’s really a big bag LEDs at the end of the rainbow? If I’m making an LED-intensive project, then the answer is obviously yes.
For all of the savings involved with the eBay electronics scene, it's not without drawbacks. The main one is speed. Between customs and free shipping, these deliveries are slow. Free shipping is anywhere from 14 to 28 business days. (But isn't it nice to know that your hardware got a free boat ride across the Pacific?)
Another issue I've seen is that these products occasionally don’t work. Proper ESD protection can be spotty with some of them. Be on the lookout for parts that aren't in decent ESD bags, or whose pins are missing conductive foam to prevent discharge. Also, it's worth noting that counterfeit chips are a real, and sometimes don’t work. It's a neat consequence of going so far up the supply chain - there are actually people out there with the materials and know-how to copy other vendors' chips! Don't believe me? Here's a Zeptobars writeup of a counterfeit of the very same nRF chips I mentioned earlier.
Another Great Resource For Affordable Hardware
Are you still a student? If so, great! More than a few hardware vendors have figured out that the easiest way to make money off of you over the course of your career is to teach you how to use their tools. No vendor has mastered this sort of market saturation like Texas Instruments. TI will give students eval boards for below cost or even free. The MSP series is a fine processor family, and even has some really great DSP offshoots.
(Aside: ever wonder why the TI-83+ is the graphing calculator of choice for so many people? This isn't TI's first rodeo. They realized that, by teaching educators to use their hardware, they were locking in decades of revenue--not just the teacher, but a whole class of students. And each new batch shows up with cash in hand.) ST Micro also has a very active university outreach program where they hold seminars that give out free hardware. A wide array of topics are generally offered - wireless sensors, low power, and battery management are just a few of the topics they offer.
Know any great sources of electronics deals we missed? Shoot us a link and let us know!