Mechanical Keyboards, Common Complaints, and the Reason Why Group Buys Exist (and Why They’re Probably Here to Stay)

The mechanical keyboard enthusiast community has a long history which is sadly undocumented publicly (although authors like ThereminGoat is starting to change that) which leaves people new to the hobby in the dark. Aside from the jargon (such as Interest Checks and Group Buys?), there are a variety of complaints which include:

• Why are keyboard components expensive?
• Why are keyboard components frequently out of stock?
• Why do we have to pre-order keyboard components that will only be available a year from now?

It might come as a surprise to some, but these three questions are all interconnected, and it’s not just due to COVID-19 and the production/shipping shortages that ensued.

Several people who enter the hobby are ignorant of business models and cashflow management, so here’s my attempt to explain them in lay man’s terms. As a caveat, I do not have insider knowledge on the workings of any keyboard manufacturing company, but am inferring from best practices found in other industries.

Mass Production, Economies of Scale, and Alternative Models

A lot of products we purchase off the shelf will most likely have been mass produced and the company that sells them leveraged economies of scale to turn a profit. Since this is probably our first and common experience purchasing products, most people’s assumption is this is how all businesses should operate.

In practice, however, alternative models are slowly becoming viable.

Offset Printing vs Print-on-Demand

To take a different industry as an example, in publishing, offset printing is the go-to method for mass-market paperbacks, which resulted in books with a retail price of under $10.00. Print-on-Demand is an alternative where you don’t need to print thousands of books, and can instead opt to print a single copy, albeit at a higher price. If a paperback with a production run of 5,000 costs $5.00 when using offset printing, the same book can be produced for $10.00 for a single copy using Print-on-Demand.

Nothing is stopping a self-published author to use offset printing to print their books and lower their cost (and in fact, this is the intention of some Kickstarter projects), but this usually requires a large capital investment ($25,000.00 to print the 5,000 copies using the example above) in addition to other challenges such as storage and how to ship them to the warehouse. When using Print-on-Demand, you just need a capital of $10.00 and you can deal with problems one customer at a time.

Supply and Demand

This ties into the challenges of cashflow and inventory management. How do we know there’s enough demand for 5,000 books? And if it requires a capital of $25,000.00, where do we get that kind of money, especially if we’re just an individual or a small business?

This is where pre-orders come in and why services like Kickstarter have been popular. It’s not really surprising why Games and Technology are popular categories in that platform because they answer those two questions.

Some people see Kickstarter as simply a solution to find funding, but the reality is that it solves other problems as well, such as gauging how many consumers are actually interested in the product and acts as a marketing vehicle.

For example, in the board game industry, Stonemaier Games discusses the challenges in meeting demand for Wingspan — a product that when released, was not able to keep up with demand — an aspect they might have partially mitigated had they run it through Kickstarter. (This is an oversimplification though and the linked article discusses why Kickstarter doesn’t completely solves this problem.)

Whereas well-planned Kickstarters (there are also poorly-planned Kickstarters which results in financial loss) provide some security to the publisher, the risks are passed on to the backers: what if the business fails produce the product? What if the product does not meet expectations or is severely delayed?

And while we use Kickstarter here as an example, that’s not the only platform or model that provides companies with such an opportunity. Another board game publisher, GMT Games, has a P500 program. Stonemaier Games has an explanation of how the P500 program works, but basically, they check if there are enough people (in this case, the magic number is 500) are interested in the game before pushing through with production and then pre-selling them at a discount.

Interest Checks and Group Buys

Bringing the topic back to mechanical keyboards, a lot of people new to the hobby do not understand how niche (at least for now) the hobby is, or at least the segment they’re entering in.

Currently, there’s two target audiences for mechanical keyboards.

Mainstream Audience

The first is the mainstream audience. These people are not as meticulous with mechanical keyboards and would happily use a full-sized keyboard and all the RGB that comes along with it. This is usually the target audience of mainstream brands like Logitech, Corsair, Razer, etc. Their keyboards are mass-produced and sold at retail stores.

Browsing through forums like Geekhack or Reddit, however, you’ll find that a lot of people there hate these companies. It’s not that their products are bad (despite what people in those forums say), but more of the audience there are enthusiasts, and their criteria for what makes a keyboard “good” is significantly different from what the mainstream audience wants.

A common question people new to the hobby ask is why is their a scarcity in full-sized custom keyboards. The answer is simple: the enthusiasts — those that are not the mainstream audience — do not like full-sized keyboards. The very reason they lean towards the custom route is to differentiate themselves from your average user and they realized that ergonomically or aesthetically, a full-sized keyboard is not for them.

The Enthusiast Audience

What some people do not yet realize is that mechanical keyboard enthusiasts are, for the most part, currently a very small niche. For example, when a mainstream company like Razer does a production run for one of its keyboards, the factory might produce 30,000 units. Compare that to NovelKeys which manages to re-stock 2,000 units and 5,500 units of its popular NK65 Entry Edition. And that’s not a criticism of NovelKeys, merely an illustration of the scale and resources available to companies with different target audiences.

The enthusiast market has very niche taste. That’s why those interested in catering to their needs tend to be small businesses and individuals who produce components that have limited production runs, from keycaps to PCBs.

Some components or products simply cannot be mass-produced. That’s why some artisan keycaps have to be personally handcrafted and priced accordingly.

Other components can be mass-produced, but the individual or business either does not have the resources to do so, or the number of people interested in the product isn’t there. That’s why some GMK keycap sets like those from individual designers only have a single production run, while larger companies like Drop can afford to have specific GMK keycap sets available all-year round.

Where Interest Checks and Group Buys Come In

Interest Checks and Group Buys are just the business models employed by Kickstarter except they’re applied to the mechanical keyboard enthusiast community.

What is an Interest Check? It’s simply a poll to see whether there are enough people interested in a product. If there’s not enough interest, the designer abandons the project or ideally runs a new/different Interest Check with revised designs.

What is a Group Buy? Group Buys are a pre-ordering system. If a product meets the Minimum Order Quantity (MOQ), consumers are charged for it, and is produced and then delivered at a later date.

Because the enthusiast community revolves around these business models, this is the reason why:

a) Products are expensive, because they’re not manufactured at a level where economies of scale makes sense.

b) Products are frequently out of stock, because each batch is produced in limited quantities or only just enough to fulfill the pre-orders.

c) Pre-orders are quite common because individuals and companies need to manage their cashflow and/or do not have the capital to produce the product — at least not without risking their own financial stability.

An Example

Here’s an example to give you a better idea of how the process works. Let’s assume we’re taking the role of a keycap designer who wants to produce a keycap set.

First, we run an Interest Check to see if there are enough people interested. If GMK is producing the keycap set, then we need at least 150 orders. Let’s assume 200 people are interested.

Second, after improving our initial designs, we decide to run a Group Buy. This entails:

1) Getting a quote from the manufacturer, in this case GMK. Let’s assume they quote us $80.00 for a keycap set assuming a minimum order of 200 copies, or $16,000.00.

2) We look for vendors whom GMK will ship the keycap sets to and who will fulfill the orders. Let’s assume NovelKeys agrees to be our vendor and they need $30.00 for each set to cover their expenses.

3) As the designer, we decide to pay ourselves $10.00 for each set.

4) The final price we charge customers is $120.00 to cover all the expenses listed above.

Third, the Group Buy is successful. 250 customers end up purchasing the keycap set from NovelKeys and pays the vendor $30,000.00 total. NovelKeys decides to order 50 keycap sets as extras and covers those costs to GMK directly. GMK ends up producing 300 keycap sets total, and charges me $20,000.00 (since NovelKeys is covering the cost of the 50 extras). NovelKeys subtracts that amount from the money they collected in addition to their own expenses ($7,500.00), which leaves us with $2,500.00.

Fourth, 9 months later, GMK delivers the keycap sets to NovelKeys, who in turn ships it to customers.

While this example is an oversimplification and uses keycaps, this can be applied to other keyboard components, whether it’s switches or keyboards.

Is This the Only Way?

Is this the only viable method to produce products for the community?

Yes and no.

Yes

If you want the same amount of diverse designs and products that’s currently being released, then the answer is yes. It’s unlikely that a mainstream company, even with a large amount of capital, will launch 20 different keycap sets every month, for example. Economies of scale doesn’t make in this context.

However, Interest Checks and Group Buys make it possible for 20 individual creators with no relation to each other to come up with 20 very different keycap sets and make it available to the community.

Or let’s say there’s a keyboard that only has an audience of 1,000 customers willing to pay for it. Bigger companies would never produce such a keyboard, while a smaller company might and apply all the necessarily quality control checks necessary to produce such a product.

No

Currently on the rise are companies that are bridging the gap between the mainstream audience and the enthusiast audience such as PCGR and Drop.

One example is the GMMK Pro. Based on the initial pre-orders, there were hundreds of thousands of pre-orders for this keyboard, hence why it has a $179.00 price point and should theoretically be in stock all year round. On the other hand, from the perspective of some enthusiasts who are picky about their keyboards, this is also why they might prefer other manufacturers like Rama Works who produce a smaller volume of keyboards but maintain the quality control or attention to detail that they’re looking for, as the GMMK Pro has some some design compromises for being mass-produced.

Another example is Drop making two of its GMK keycap sets, Red Samurai and Laser, available all-year round. Some people who purchase GMK keycaps might be baffled by how this is possible, especially with new batches of GMK Laser being available every Monday, and how there’s a backlog of GMK sets currently (i.e. current Group Buys for GMK sets takes a year to be fulfilled) but there’s a simple explanation for this.

Drop simply had GMK produce a lot of GMK Laser keycaps in the initial run (thousands, if not tens of thousands, of sets instead of a few hundred that a lot of Group Buys do) and is having GMK ship them in batches to Drop’s warehouses.

On the other hand, not every company has this kind of capital. Even Drop, for example, does not make every GMK set they sell available all-year round. They do need to manage their cashflow and inventory, and can’t invest $500,000.00 in every GMK set they release.

A Hybrid Method

The reality is some companies are already doing a hybrid method.

Take NovelKeys for example. Several of their products are still Group Buys, but they have a few items that are in-stock.

There’s the NK65 Entry Edition which doesn’t require a Group Buy to purchase, but does quickly sell out and there are long lead times in between re-releases.

They also have some keycap sets which did not run via Group Buys and are readily available (subject to stock availability).

There’s a movement to make products available all-year round but people also need to understand the limitations faced by individuals and small companies. There are some enthusiasts who envision all the risks should be shouldered by vendors but the reality is even “big” vendors like NovelKeys do not have infinite capital and resources. It’s also easy to tell someone to risk their money when people aren’t willing to do so when placed in a similar situation.

On the other hand, there are also some products that can never be mass-produced and what makes them special to enthusiasts is that they are, in fact, not mass produced. We can’t really demand that non-mass produced products be sold at mass-production prices.

Lastly, there’s also the perception that every person deserves to receive X product regardless of their financial means. Unfortunately, the reality is that mechanical keyboards are a luxury items and no one absolutely needs one. It’s not a life-and-death scenario. And in pursuit of this luxury, some people are willing to cut corners or throw people under the bus. For example, individual designers create GMK keycap sets and some people turn to companies that clone sets like HK Gaming and Akko who rip of designs from those designers and sell them at a cheaper price. These type of customers are making a statement: “we don’t care about individual designers and they don’t deserve to get paid, as long as we get the keycaps cheap.”