The margins for appliance manufacturers are tight. 3-5% is not uncommon.
Features like wifi connectivity and premium finish are how you start increasing profitability but even then you aren't making significant profit per unit until you hit the very top product lines – think Samsung's Dacor or GE's Monogram.
Any proposed change to the appliance goes through a cost/benefit analysis that is more rigorous than anything I've seen in a software company: if your BOM or cost to assemble go up by pennies you have to convince executives that either cost of quality goes down to compensate, OR that it will drive sales.
Water filters, on the other hand, have margins that have 2 or even 3 zeros at the end.
The margins for appliance manufacturers are tight. 3-5% is not uncommon.
Features like wifi connectivity and premium finish are how you start increasing profitability but even then you aren't making significant profit per unit until you hit the very top product lines – think Samsung's Dacor or GE's Monogram.
Any proposed change to the appliance goes through a cost/benefit analysis that is more rigorous than anything I've seen in a software company: if your BOM or cost to assemble go up by pennies you have to convince executives that either cost of quality goes down to compensate, OR that it will drive sales.
Water filters, on the other hand, have margins that have 2 or even 3 zeros at the end.