I’m doing something very much like what you describe. Small footprint IoT device, we get the custom designed PCB’s shipped in and most of our BoM is generic off

I’m doing something very much like what you describe. Small footprint IoT device, we get the custom designed PCB’s shipped in and most of our BoM is generic off the shelf stuff that is already available on Alibaba/AliExpress. Our enclosure and other plastics are designed in house and injection molded in my two car garage with molds printed on a resin printer. Soldering is custom ordered overseas where possible and hand soldered when not. The Buster Beagle was a real game changer in this space, though if your parts are really small there are other even cheaper options. The goal is to, as you say, prove the prototype and then get a larger dedicated space. The product I have is not super niche and could theoretically grow a lot, but we are planning to be pretty adaptable by focusing a lot on COTS components, the kind that you can go onto Alibaba and find 5 factories for whatever you need.