Pricing advice: Custom 220V AC to 12V/3.3V DC Power Board for a merchant. Flat fee or royalties?
Hi everyone,
My partner and I (both control and systems engineers) recently finished developing the power section of a smart home switch for a local merchant.
Technical Details:
The board takes 220V AC mains and steps it down to 12V DC and 3.3V DC.
It includes 4 relays for switching.
We did all the schematic design and PCB layout using KiCad.
The prototype was successfully manufactured in China and tested.
Total R&D and design time took us a little over 2 months.
I have attached a 3D render of the board for reference.
The Dilemma:
We have no prior experience in pricing our hardware design services. This was built for a merchant who plans to mass-produce and sell it. We are trying to figure out the fairest compensation model:
- Should we charge a one-time flat fee for the design? If so, what is a reasonable price range for 2 months of R&D for this type of board?
- Should we ask for a partnership/royalty model (a percentage of sales/profit)?
- How should handing over the source files (KiCad) vs. just the Gerbers affect the pricing?
Any advice on industry standards for hardware freelance pricing or personal experiences would be highly appreciated. Thanks!