Razors and blades

Make sure that you price your product adequately and have sufficient margin built in, so you still make money after you grant the discount to your distributor. Put a strong focus on consumables; consumables - beside replacement parts and service contracts - provide a steady source of income for the manufacturing company. If your technology happens to rely heavily on consumables (eg buffers, standards, assay kits, chips, wafers) consider offering the instrument below cost and try to generate income on consumables.