by Jonathan08 » Tue Sep 15, 2015 5:42 pm
Hi,
I'm interested in hearing from campaigners who've ran succesful campaigns. I will sit down with a great idea, get quotes on manufacturing, start to get excited but then when I crunch the numbers, it never pans out. I will provide an example below.
I invent widget X, CNC part, roughly 6x6x6" dimensions, approx 1lbs shipping weight.
All costs in US.
Cost to manufacture widget X is 30$, CNC machined in China.
Cost to ship widget X from China to my door here in Canada, 10-15$/unit (estimated, with import taxes and duties included)
Cost for specialty packaging, shipped to my door in Canada, 10-15$/unit
Cost for GST, goods and services sales tax is 25$
(estimating that final selling price is anywhere from 100-200$)
Factored in cost for returns, cancelled payments, no shows etc. 10-15% or 23$/unit based on 150$ selling price.
Cost for KS and amazon fee's, 10% or 15$ based on 150$ end selling price.
Cost for extras like stickers included with widget X, 3$/unit.
If we add all these costs up, what started as a 30$ cost to manufacture turns out to be 126$!!! before my mark up. Typically in business you want to at-least meet your cost in profit margin, so that means I would have to sell widget X at 126$x2= 252$ just to make it worth my time.
at that price, I basically kill all incentive to buy.
Now that's using widget x @ 30$ manufacturing cost. I'm just wondering if I've missed some costs or am I overestimating. It seems like even if my manufacturing cost was like 5/unit$, I will still end up having a final price point that is way too high. Am I missing something here?