[nebulous1]

$100 profit on a $150 watch would be crazy. Rest of the post seems made up too. I don't know where these numbers are coming from. I'm genuinely confused.

[beambot]

MSRP of 3x COGS is a pretty common rule of thumb for hardware. Have to leave room for distribution, software, R&D, returns, SG&A, etc. End of the day, it's probably still only 30-40% gross margin -- less than half of a good SaaS company. Hardware is (indeed!) hard.

[scyzoryk_xyz]

Having worked in a tiny start-up-turned-company doing hardware for medical training, my biggest takeaway was that it is very slow but that it can also be very stable.

Like, yeah our margins were/are super high, and so were/are the distributors’, but once everything was spun up and running it was also very stable and predictable.

We were located on the outskirts of a 3rd tier Eastern European city and yet we were plugged right into the same global parts supply chain and capable of doing the same global distribution you could elsewhere. If you’re on to something, it’s a good time to be doing hardware. But you’re correct - 2/3 of the entire company was distribution/sales and R&D.

[cenamus]

But then how could you call that 100 profit in any way? If you made at most like 30-50?

[roboror]

Not crazy at all in consumer electronics, that's margin on the parts only. R&D, admin, software, etc. costs need to be recovered from that money.

[apparent]

I was using a blended average of the $150 and $225 watches. Also, it sounds like some of the components for the $150 watch were literally left over from Pebble days, which means they could have gotten an amazing deal on them.

[IshKebab]

Nah that's pretty typical, depending on what you mean by "profit".

[ac29]

Right, that is presumably gross profit per unit, not net. Net profit could easily be zero or negative.