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What is Your PCB IQ? - PCB Pricing
Thursday, March 03, 2011 | Marissa Oskarsen & Chrys Shea, Printed Circuit Girls and Geeks (E-TEC Sales)

8. Asking the suppler to waive NREs is a shrewd negotiating tactic.

9. It's best to let the assembly contractor handle the PCB procurement.

10. You can get better unit prices by cutting out the middleman.

Answers

1. Correct answer: a. Labor

Approximately 40% of your unit price can be contributed to labor and other overhead. That's why so much of it is sent offshore or to lower labor cost regions.

2. Correct answer: d. Profits

I know; it's surprising, and it doesn't seem to make much sense with all those U.S. shops going out of business or overseas. Although the survivors might not admit it, they are maintaining a healthy profit margin and there is absolutely nothing wrong with that.

3. Correct answer: b. Materials

Not only do raw materials rank relatively low in cost influence, their costs are pretty much the same for all fabricators...unless a fab shop sucks at negotiating with their suppliers, which should not be your problem anyway.

Now I know what you're thinking: If material cost isn't the primary driver, then why is everyone so concerned about the cost per square inch of circuit board? Because when we talk about cost per square inch, we're talking a lot more than material costs.

This is the smoking gun: Your price per square inch isn't based on material cost alone. It's got labor and profits--the bigger, more variable factors--rolled into it. That's why it's so important! With a little simple algebra you can figure out who's charging more or less for profit and labor. I'm not encouraging you squeeze all the profits out of your fabricator, but I don't want you to get robbed either.

So, how does one figure out the price per square inch for their PCBs? For the longest time I believed that if an equation even existed it must be well guarded, deep in the magical forests where the unicorns live. But after a decade of working in this business, I finally derived a formula that allows me to back calculate the average price per square inch from any particular PCB quote. And now I'm going to share it with you!

If I disappear suddenly without notice, you'll know why; I'm a marked woman for letting this cat out of the pink ESD bag.


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