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What raw material is needed to meet your specifications? There are different grades and classes of raw material. Plastic, metal and electronics can come in good, better or best options. As you can imagine, the price increases as you move up.
Not sure which material you need or can substitute? We can help you determine the best materials to help you reach your application requirements. We have firm suppliers on materials and packaging, cooperated over 10 years.
While automation, robotics and machines are being deployed in manufacturing faster than ever,we still need people. It takes our labors to operate the machines, inspect raw material, inspect and assemble finished goods, test products, package, load, and ship them.
However, our long-term stable on-the-job staff, staff turnover bottom, so that we can efficient production and operation. Our standard production, inspection and packaging processes allow us to better control costs.
Raw materials, have lower prices as the volume increases. The higher your Estimated Annual Usage (EAU), the lower the price. 120,000 pieces per year will be cheaper than 12,000 per year.
A second factor in volume is Minimum Order Quantity (MOQ). For example, the items typically require 5,000. If you only need 4,000 for your customers' projects, the cost of the additional 1,000 needs to be considered.
Extra cost on special requirements
If your product requires assembly ,specialing design and packaging, then we will need testing, assembly, design and special packaging.
Testing is the most underestimated factor in the overall cost of quality. If your projects need a more extensive test on each unit to verify function, it should expect a higher cost of quality
Occasionally imperfect raw materials or components (even a machine failure) can yield a few cosmetic or functional defects that will need to be scrapped. It should budget for approximately 1% of the cost.
Your company, like ours, must pay for the people, materials, machines, insurance, taxes and make a little margin to reinvest back into capital improvements and more people, materials, machines…
Freight (and Possibly Duty)
Don’t forget to budget for shipping and logistics into your product pricing.
You might be facing any combination of fees including: ocean, full container load, less that container load, expedited air freight, truck freight, customs or import/VAT, exchange rates, warehouse or inventory management cost.
Even if you want to handle your own freight domestically or internationally, there are hard and soft costs to consider.
By now ,you get the picture on what goes into determining an estimate of manufacturing costs. Imagine trying to best guess a quick quote when you have a multitude of factors that exist on a sliding scale. You want your contract manufacturing partner to be accurate with their quote. It’s important to provide as many details as possible so you know that you can compare one quote to another, apples to apples.
It doesn’t hurt to be patient as well. The more complex your bill of materials (BOM) and any post-production process or assemblies are needed, the more time it will take to evaluate and determine a cost.