Electronics distributors are seeking to tap into the growing "do-it-yourself" (DIY) movement in electronics through some unique incentive programs. Starting today, Jameco Electronics will begin paying royalties on design kits. The program, dubbed "Club Jameco," provides designers with the opportunity to generate revenue without taking traditional business risks associated with sourcing components, designing packages, and marketing new products.
Under the program, the designer develops and submits an idea, builds the bill-of-material requirements and provides step-by-step instructions for the device. Diagrams and photos are encouraged, along with a video to post on the Website or on YouTube.
Royalties will vary depending on quarterly sales. Kits generating sales of less than $200 per quarter receive 5 percent of sales; and those with more than $500 per quarter get 10 percent.
Quantifying the value of the project will depend on Jameco's ability to source components at a reasonable price, ensure the device works as intended, and determine whether the kit instructions are clear and concise. A crowdsourcing model, where developers in the Club Jameco community comment on the project, will provide feedback on the viability of the design. Once approved, the description and SKU for the kit will be posted online.
Jameco will source the components from more than 150 suppliers to create the kit, stock it in their warehouses, and promote it on their Websites, catalogues, and through social media.
Greg Harris, Jameco's vice president of sales and marketing, said both distributor and developer own the intellectual property rights. The creator retains the right to sell the design through other sites. The distributor takes the responsibility for pricing, based on costs for components, marketing, and other business-related issues.
The service isn't without challenges. The first: Jameco must recruit developers to design the kits. Harris isn't concerned. "By using the power of the crowd, we could have thousands of kits to offer hobbyists in a very short period of time."
The crowdsourcing model lets the community vote for projects during the design phase to help designers create the best projects and ensure builders get what they want and need. This pay-for-projects concept, combined with crowdsourcing, creates engagement in the electronics hobbyist community.
Jameco will market each kit to hobbyists in magazines and newspapers ads, online banner ads, email marketing, Facebook, and through participation in the Maker Faire. The distributor also developed partnerships with other hobbyist organizations. Jameco already uses search engine marketing, paid search, affiliate marketing, and social media, such as YouTube, but has not yet tied these efforts into Club Jameco. Harris has no immediate plans to dive into promoting the kits on the social site, Pinterest.
Harris believes Club Jameco will assist the distributor that specializes in selling small quantities to hobbyists, to create a Mecca for thinkers. The effort is also targeting customers like high school and college students working through design challenges related to robotics and other sophisticated electronics.
One hobbyist at Jameco combined origami skills with LEDs to create a Mother's Day bouquet. The flowers, made with paper, light up with color LEDs. This kit provides an example of how people, other than engineers, can create designs and earn cash.
And while Harris declined to provide Jameco's investment for the project, he called it "significant." The Website and royalty programs become the first projects in a long line to build out the Club Jameco. The distributor plans to launch the project at the Maker Faire on May 19, but the site goes live on May 18. Club Jameco membership is free.