Is this the price in just components? I skimmed through the article and that wasn't clear. Because if it doesn't include labor costs, then its reasonable that the US phone sells for a lot more.
> Cost of goods sold (COGS) refers to the direct costs of producing the goods sold by a company. This amount includes the cost of the materials and labor directly used to create the good. It excludes indirect expenses, such as distribution costs and sales force costs.
So the $550 or $650 COGS includes the cost of labor for manufacturing, but excludes (say) marketing and auditing costs.
Right, but this is the same company, so the cost of marketing, auditing, R&D, etc. shouldn't be different for these products. That's a fixed cost for the company.
This is a guess, but the argument is probably that it took way more R&D effort for them to figure out how to produce it efficiently in the US, and they've chosen to increase the cost of the US phone variant to offset this particular R&D expenditure that the Chinese variant didn't have.
> So it's about $650 to produce that entire phone. But what we're doing by selling it for greater originally, we're looking at a lot of differentiators for us. It wasn't just made in the USA. It's the fact that it's a secure supply chain, that you know, staff that's completely auditing every component, which means we're selling to a government security market with all those additional layers that we've added on top.
So I guess the answer is that they're selling to the "government security market" so they can charge whatever the hell they want.
It is not just the labor/components, but that it is for a different market with different expectations and requirements. From the article:
> You can look at our concrete numbers. We sell a Chinese made Librem 5 phone for $799. We sell the Liberty phone for $2,000. When you're looking at just those numbers alone, that looks like a giant leap in cost. But there's a couple of factors that are not publicly known when you're looking at just those prices. When you're looking at COGS, cost of goods sold, our Librem 5 phone is equivalent in cost to about an iPhone. It's about $500 and some odd dollars, $550. So we can see that the Librem 5 phone doesn't have a very high margin when we sell it. The Liberty phone, same COGS componentry wise, but to produce it on US soil, we're adding not quite a hundred dollars. So it's about $650 to produce that entire phone. But what we're doing by selling it for greater originally, we're looking at a lot of differentiators for us. It wasn't just made in the USA. It's the fact that it's a secure supply chain, that you know, staff that's completely auditing every component, which means we're selling to a government security market with all those additional layers that we've added on top.
