You can read the entire blog post here.

I’m going to talk about the costs you need to consider when creating your physical product and how to find out what they’ll be.

Here’s what I’ll cover:

  • Production
  • Packaging
  • Shipping
  • Import Fees
  • PLUS the other costs you may not think to include

Just a note that now you know what your product will cost to produce, to work out if it’ll be profitable for you, you need to work out what you can actually sell it for.

Listen in to hear why I suggest thinking about this before you have all the costs.

USEFUL RESOURCES

Episode 5 – Want to create a product? 4 things to do first

Episode 6 – How and why to validate your product ideas

Episode 9 – How to carry out your own customer and market research

Product validation mini-course

Blog post – How to ship and store your products

Blog post – How to take your own product photos

Blog post – How to write product descriptions that sell

Blog post – Do I need to find an overseas manufacturer to make my product

LET’S CONNECT

Find me on Instagram

Work with me

Transcript
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Welcome to the Bring Your Product Ideas to Life podcast,

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practical advice and inspiration to help you create and sell

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your own physical products. Here is your host Vicki Weinberg.

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Hi, thank you so much for listening. I am recording

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this a few weeks in advance, as I'm trying to

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sort of make sure I'm ahead of myself. So it

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early may, now is actually a Saturday. So you might

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hear the lawn mowers and children played in the gardens

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and other stuff like that. While I'm recording, I try

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and keep it as quiet as possible. But right now

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that's pretty hard. I'm having a sort of grab any

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moment I can take to come and talk to you

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and, and record it for this. So thank you for

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being here. I'm going to get straight into today's topic.

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So when I speak to people who are looking at

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creating a product or a question that comes up a

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lot is how much money do I need? And also

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sometimes where do I find that money in the first

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place is a really common question and it's a concern

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and I can completely get it because yes, you do

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need some kind of investment to launch a physical product.

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Now, I can't sadly give you a short giving you

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an exact figure. I've always, this would be a very

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short podcast and it might be a very small amount

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and it might be a large amount. Umm, and the

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reason I can't give you the exact figure is there

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were so many variables. So it depends on the kind

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of products that you're looking for. You know, your exact

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specification way of looking to source it from, how many

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products you need type of packaging. There were just so

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many variables. So I cannot give you an exact figure.

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What, what do you know is what I'd love to

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be able to? But what I can do today is

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talk to you about what costs you can expect and

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how to find them out. So at least you don't

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end up with any nasty surprises and you have a

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really good idea of what you're looking at upfront.

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And hopefully I'm going to talk about some things here

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that you've already fought about in terms of the costs

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you need to prepare four. And I may, I also

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talk about some things that you hadn't considered, and that

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will be really useful too, because when you are working

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out, whether your product's viable and wherever it can be

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profitable, having all of the information up front is going

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to be really useful. Just remember, you've heard me say

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this a lot of times before, but I still believe

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that it's a bit less scary spending this money that

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we are talking about today. If you know, you've got

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a product that will sell well. So if you have

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absolutely no idea, its quite a big gamble and I've

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talked about this. So a lot in previous episodes, but

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validate in your product idea is something I think you

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should absolutely do.

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Perhaps even before you get to the, we'll definitely be

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fore. You get to this stage of working out what

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your product is and how much it's going to cost

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you to produce it and ship it and store it

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and market it. And all of these things. So episode

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10 with Abbey Teunis is a great one to listen

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to you. If you haven't already, there's also a really

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informative Blog post. If you prefer to raise it, I'll

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link to both of them in the show notes. And

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actually speaking have show notes for a few people who

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have said to me about, Oh the show notes, depending

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on where you are, what platform you're listening on. If

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you have a look for something that says details or

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more information, you should be a whole load of text

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that goes with this episode where I give you a

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bit more information about what it is, what I'm talking

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about.

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And right at the bottom, there were some useful links

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and anything I said, how are you will be linked

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from this episode will will be linked to there and

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you can get directly There. You can also go to

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VickiWeinberg.com/podcast. And I'm all the show notes for every Episode

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in one place over there too. Okay. So let's move

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on to the part you've perhaps been waiting for. So

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I'm going to talk to you about the cost. Do

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you need to consider when you're thinking about creating a

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product and how to find out what they'll be? Okay.

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So I'm going to start with the obvious one, which

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is a production and this will most likely be your

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biggest costs because wherever you are, a product is bespoke,

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wherever it is a variation or something already exists. And

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I'm like, my Bambi muslins into, for example, there will

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be a cost involved in producing it and then may

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also be a cost involved in designing it as well.

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So my Muslin's were a variation on an existing product,

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but I did have to pay a designer for the

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patterns, you know, the designs that go on to them.

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And it depends on what your product is. It may

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need some degree of, of design work and it may

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be something completely new and original where you're going to

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need prototypes building and that kind of thing. So the

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cost here will vary greatly. And it will also very,

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depending on, you know, the materials you use, the complexity

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involved, the country it's made in and how many you

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order. And as I said, if it's something completely new

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and groundbreaking and you might have a development and prototype

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cost as well.

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So this has definitely going to be your biggest costs.

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Is it a lot to consider? And the best way

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to find out that cost is once you have a

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specification, which will talk about a future episodes at once

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you have a specification, you know exactly what your product

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is. You need to start reaching out to suppliers and

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asking for quotes. You can get an idea of what

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products might cost by looking on sourcing sites and other

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websites. But often the figure you see is for their

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off the shelf products and the minimum orders might be

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quite high in that it won't actually reflect what your

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pay, but it all means, look, it might give you

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an idea. The best way to get an accurate figure

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is to contact suppliers and ask them. And then again,

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coming back to the specification, you, you, you, it's going

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to be, to be as clear as you can on

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what your product is, you know what its kind of

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been what the exact specifications is done.

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So there's an example unless you use My Bambi muslin.

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So if I have gone and said, I would like

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a quote for Bambi Muslins, but it hadn't known how

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thick I wanted them to be. So how many layers

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of Muslin I wanted if I hadn't known the exact

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size that I wanted my own designs, printing the number

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of colors involved in the printing, what I wanted them

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a package in a box, all those things impact of

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the cost greatly. So if I had been looking for

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a class at a smaller, or if I wanted less

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collars in the designs or I had wanted different packaging

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that would have really impacted the cost. So the I'm

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a big believer of going and getting a crate for

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the exact product that you want it as close as

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you can. So rather than saying, or can you create

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me for a bamboo and quite a bit for cotton?

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Can you quote me for a packaging in a bag

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and packaging it in a box? Obviously their might be

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one or two things that you like actually that is

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not such a big deal. Let's let's find out, but

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hopefully if you've done your validation and you've done your

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market research, you'll know exactly what product you're looking for.

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And I think you need to wait until your, at

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that stage before you actually go out and contact suppliers

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and get quotes. 'cause, you're actually getting an accurate price

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for the product that you're looking to produce. We'll definitely

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talk about how to create a great product specification and

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have a Episode and how to find a great suppliers.

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So don't, you know, don't worry to much about that.

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Now I have spoken before about weather to source your

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products abroad or whatever the source in your own country.

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I've got the detailed Blog post on that, which will

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be linked up in the show notes and find the

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thing to remember is even if the product you're looking

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to create, it is something you're planning to make yourself,

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or, you know, perhaps you got a friend or family

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member who's going to make an app for you and

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you think, well actually there won't be any costs. You

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will still need to factor in the cost of materials

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and the cost of the time taken. So don't forget

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about those. Okay. The next cost to think about is

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product samples. So I believe that even if you're sourcing

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a fairly simple product, you should definitely get to some

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samples from a at least two or three. So tight

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to say two or three suppliers is a good number.

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So I'm talking about you are contacting suppliers and pliers

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your making a short list. You've got maybe two or

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three when you think actually, yeah, these are the people

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I could work with. They sounded like they can produce

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the products they want. This is the stage where I

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believe you need to be ordering samples, just so you

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get a feel for the quality where if they've understood

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the brief that you've got and you know, this isn't

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a free the costs again, really vary. So some suppliers

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would just charge you the shipping cost, but some were

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will charge you for producing the sample as well. So

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the more work they need to do on your products

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will really affect the price of the samples. So if,

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for example, some suppliers will send you a stock samples

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and they're genuinely a lot cheaper.

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And I believe that actually you want to get a

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sample of your exact product for two reasons. One, because

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as I say, you then get an idea of whether

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they've make a brief is a really good way of

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assessing the, you know, what a customer we'll see if

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the actual final product, the second reason is if you

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have a decent sample, you'll be able to use that

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for your product photography while your final products have been

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developed. And that'll save you a bit of time at

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down the road as well. So do you factor this

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cost in it? I mean, this isn't going to be

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a huge cost. I would say it it's going to

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be a few hundred pounds at most, for most products,

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not at all, but it is definitely something to think

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about.

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Okay. So the third cost to consider is packaging. So

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packaging costs really ranged depending on what kinds of packaging

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you like and how much did you like to customize

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it? Say for example, a plain Brown box costs less

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than a printed box. And by printing, you know, you

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might have a praying Brown box with one or two

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colors printed on it, or you might have a full

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color box and that's the case for any kind of

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packaging that you have. You definitely can save some money

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in this area, but I would urge you not to

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do that at the expense of the April quality of

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your product. If your product is, is a premium product,

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I would suggest that your packaging needs to look premium

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two, by the way, a premium doesn't necessarily mean more

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exp PM doesn't necessarily mean really expensive, but it just,

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you know, I have to put some thought into the

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market.

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So if I were selling a premium product, which I

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do, actually, I wouldn't just send them in a plain

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box. I would think about, you know, the overall customer

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experience and how the customer would want to receive the

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product and kind of think about the packaging and the

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product as a whole, for some products. I think the

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package, and it does matter a bit less, but I

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do remember you will need packaging, have some cotton. So

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I have had people say things Before like, well, I'm

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set it in pencil cases. I don't need package in,

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but they do still need something to protect them during

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shipping to wherever they've been stored. So they need to

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protect it while they're in the storage and then during

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the shipments to your customer. So in that case, perhaps

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just like a plane plastic bag, this is all that

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is needed perhaps or in a, in a little tag,

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but you do need some kind of packaging to protect

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your products.

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As I say, that varies depending on the product is,

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but you will need something and there will be a

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cost of that. And have a little thing to mention,

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as you might find that the minimum order quantity is

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higher for your package and then it it's for your

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actual products. So it'll be sure to ask and check

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This. It might mean as an example, your ordering free

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a hundred products, but they say, actually you have to

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order 500 of the packages. And of course they would

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keep those extra 200 over for your next order, but

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it is a cost, you know, you have to be

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expected to pay for those all of those 500 when

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you place that first daughter. And so that, you know,

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things like this is just worth, keeping it in mind

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is because you know, it is going to add up.

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And I just want to make sure that you're a

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factor in all of this in, and then the next

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thing to think about is any extras, say manufacturers might

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on add extra cost for things like plate fees for

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printing. So if you're printing your own designs, whether that's,

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you know, printing on fabric or paper, or this is

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usually a one-off fee, you sometimes get charged. This when

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they produce a sample for you. Sometimes it gets reimbursed.

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If you place an order, sometimes it doesn't. These are

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all things to speak to the suppliers about. You might

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get charged extra for washing labels. If applicable, you might

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get charged extra for labeling products. So for example, you

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might want your barcode applied is a sticker, or you

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might want a barcode for a specific market place you're

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selling on.

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For example, I sell it on Amazon. So I have

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Amazon barcodes at my supplier put on every box. So

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for me, I'm, it's not a big cost, but you

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know, its worth is we have known these things and

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there were a whole host of other sort of little

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things that I'm, that can start to add up. So

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say to be sure, you know, what these costs are

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up front. It's just good to think for, you know,

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the exact specification of your product. As I said, Before

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and ask about these things because you, what you don't

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mind, is there any nasty surprises? You know, you've worked

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at all your finances, are you ready to place the

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order? And then the supplier says, Oh, but if you

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want washing labels, it's an extra 25 P per products

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or, Oh, you weren't there. So we're going to charge

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you that, you know, is make sure you ask upfront.

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So when you're getting quotes, you get an absolutely everything

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included. And as I mentioned earlier, do you remember to

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consider any other costs involved in the creation of your

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product? So I mentioned before the pain and the design

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of the sort of to design for your product, umm,

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but you might also be looking at paying someone to

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work on your branding, your logo, your label, or your

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package in to say, just keep those costs in mind

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as well. Okay. So then the next cost to think

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about is shipping. So let's assume, you know, we've got

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to the stage where your product is, is produced. You

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know, you've got all of these production cost covers. We

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now need to think about getting your product from wherever

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it is being made to wherever it is going to

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be stored.

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So wherever you're shipping domestically within your own country or

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internationally, unless you can actually go and collect the products

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yourself, you will be paying for some kind of shipping

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and obviously how far the product's traveling will impact them.

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So the method you choose and the shipping terms, you

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choose all impact of the cost. So if your shipping

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within your own country, let's just assume this is probably

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not a huge cost. And it's something you should hopefully

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be able to figure out using a delivery company website

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and that kind of thing and the cost. Hopefully we

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won't be so much if your shipping internationally, however, is

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a different matter. Umm, and depending on the quantity that

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your show that you're sending and how quick you need

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it to arrive all these things, I was really an

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impact the cost.

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So I'm going to touch on this quite just briefly

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because there's quite a big topic, but there are different

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ways you can ship your products. The most common are

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air rail and sea. So air is generally, the quickest

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and sometimes the most expensive while sea freight is generally

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the slowest and cheapest. However, if you're only sending a

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few small boxes, they might be little or no difference

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between using air or sea to send in your products.

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I tend to sell my products using Rail because I

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think it was a happy medium, but I've tried all

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of the shipping methods. And I can tell you that

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the cost really varied depending on the size of your

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shipment. And sometimes one is much cheaper than the other.

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Sometimes there's not much difference. And the best, you know,

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advice I can give you is to ask her a

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few quotes or you can compare So right now. I

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have a shipping company that I'm really happy with a

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guy that I've been using for a while. But prior

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to that, whenever I was sending a shipment, I would

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always ask my supplier to get me at least one

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shipping quote. And then I will contact a few shipping

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companies as well that I would get multiple quotes and

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compare number of things to make sure that whoever you

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send your goods with to make sure that you've got

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insurance as well. So that if something happens during the

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transit, your cupboards that's that usually included within the quote,

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but you check and that's something obviously else to consider.

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And I'm not going to touch on this in great

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detail, but there's something called Inco terms or international commerce

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terms, which referred to the agreement you make when you

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buy goods internationally. So these are the terms which set

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out which fees you pay and which fees are paid

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by the supplier. When you are shipping internationally, I'm going

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to link to a blog post in the show notes

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that talks about this and a bit more details because

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it was a bit of a tricky subject to a

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certain, it's not something that we want you to worry

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about. I'm a good shipping company. It will be able

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to, you know, help advise you on This which one

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do you choose? Honestly, it, it doesn't make her, it

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doesn't usually I can't see it your way. It doesn't

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usually make a massive difference, but it's just, you know,

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one of the things that I'd like you to be

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aware of and sort of take into account when you're,

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when you're looking to arrange your shipping.

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And finally, if you are in porting your products, there

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will be fees involved as well. So you will need

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to pay duties and taxes on any good to import

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from another country and show your own country how much

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varies on the product, where it's manufactured and the country

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you are imported into. So the country you live in

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or the cost of your store and your product's in

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the country, that the goods were produced him. You can

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work this out for yourself on nine by me. You

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have there be a government website for the country that

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you're based in or help you work this out. But

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I'll be honest. It's really complicated. And I actually suggest

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asking Your the shipping company.

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You chose to work with me for help here. You

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can also ask them to pay these for you when

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you get to customs and then charge you for that,

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either in advance or retrospectively to save you, having to

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do this yourself, it shouldn't make much of a difference

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to the actual cost. But you know, you will need

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to know this class because even if you know how

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much your product costs create and you know how much

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it cost to ship, if you are not prepared to

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pay any taxes for that coming into the country, assuming

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your sourcing at broad, then you're going to get a

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surprise at the end, which I definitely don't want. So

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if you add all of these art, that is the

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total cost to get your product created and to your

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doorstep or two, a warehouse or wherever you're sent it

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yet.

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And if you divide that number by the total number

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of products you all doing, you will have a cost

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price per item. However, I don't want to stop just

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yet because we, I do want you to remember that

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to work out of your product will be profitable. You

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also need to consider a few other things. I'm going

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to give you a really quick run through of now.

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So these are the things. So we've got the cost

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now for sort of producing and so producing your products

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and getting it sent wherever it needs to go. But

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I don't want you to think that, you know, that's

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where it all ends. So if you will need to

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think about marketplace fees. So this is so wherever you

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intend to sell your products, most platforms charge either a

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flat fee, a commission or base.

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So if you know where you want to sell your

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products and I'm sure you've got a bit of an

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idea, you do need to look into what the costs

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are going to be. And I'm, you know, these are

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the various or some marketplaces such as Amazon where you,

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where they can store and ship your products for you.

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Obviously there is a cost for this, or you could

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just sell on the platform and store and ship your

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products yourself and that slightly cheaper. But you know, you

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definitely need to look into this. Even if you use

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your own website, you'll still have to pay a hosting

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fee, possibly a transactional fee for each payment, depending on

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how you take payments. So, you know, things to consider

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storage is another cost.

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So unless you are going to be storing your products

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yourself and your home at your garage or your shared

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or wherever, you know, you need to pay for this

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fulfillment is something else. So wherever you have a fulfillment

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provider, wherever you're going to the post office a few

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times a week, wherever you're going to have a courier

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com and pick things up from your house, you need

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to work at what the cost will be to get

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your product to your customers. And again, this is going

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to vary depending on the size of your product and

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how quickly you need to get it to people and

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have, and where your sending it, obviously shipping internationally costs

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a lot more shipping, huge boxes, costs a lot more

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of something that fits in an envelope. That's a bit

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cheaper. So you do, you need to work out what

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your shipping costs will be.

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Whether you are doing this to yourself or paying someone

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else to do it, it for you. And it will

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still need to think about marketing. So initially at least

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you might want to invest in some marketing. You might

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want to do some giveaways, which you need to factor

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in. You might want to do some promotion or discounts.

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You know how to get your first couple of sales.

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Yeah. The fact that the same photography. So you might

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want to have your products professionally photographed. You can't have

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you ever do it yourself? I'll actually link in the

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show notes for a blog post. My most recent product

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photos. I actually did myself. I'm, I'm not going to

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say that they're like the best, but I took the,

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myself and my iPhone. I edited there in Canva and

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they looked good.

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They were approved to be used on the market place.

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So I wanted to use them on it and they

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looked pretty good. So we definitely can do it yourself.

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And I will link to that blog post. But if

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you don't want to pay someone to do that professionally,

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that will be a cost. And then finally you need

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to think about, you know, any other support you might

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need. So things like writing, product descriptions, something that I

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can help you with setting up, listening to the market

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places, which I can also help you with. And of

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course you can, again, you can do all of these

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things yourself, but if you know, there is something where

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you are like, actually this feels to me with dread,

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this is not my area of expertise. And you think

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it might make your life easier and produce it better

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for us. So if you pay someone to help you

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with it, then Just, you know, factor that in now.

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And there were plenty of people out there that can

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help. So I know that is a lot, and I

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know that there's a lot to think about and, and

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a lot to do, you know, we have kind of

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going through the process of creating a new product a

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bit here. It is as well, or be it and

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some quite big steps and I'm a member I'm here

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to help. Should you need it? So I know I've

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just given you a lot of information there about all

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of the different factors involved in creating a product. And

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you know, it might seem a bit overwhelming that certainly

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isn't my intention, as I've said many times before, I

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absolutely believe you can do this. It's definitely doable.

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Those steps where it meant to phase, you know, I

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just really want to give, how do you know how

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much will it cost us a question? I get asked

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a lot and I really just wanting to give you

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a really considered detailed answer. So you have all of

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the, all of the facts, but If having listened to

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that. You'd go in. And actually that is a lot

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two things that might help you. The first is I

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have a free checklist, which is available in my website

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that talks to you through all of the stages, creating

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a product. So you might find that USEFUL just to

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download and looking at that. It gives you the more,

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you know, the full, okay, I've got an idea of

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right for you. So your product is on the shelf

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or the virtual shelf. Just having that there, perhaps we'll

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be of use it to you, even if it's just

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to have the whole thing laid down in front of

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you.

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And I am also opening the doors for my online

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course shortly. So my course is called launch it. And

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it takes you through the entire process of sort of

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creating your product and getting it ready to launch. So

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it goes through absolutely everything in much more detail than

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I have talked about today, including how to specify your

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products, how and where to find a supplier. We talk

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about a shipping and the shipping terms, and then all

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of the, all of the elements in a lot more

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detail. And obviously there are lots of tasks for me

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to go away and do as well. So that is

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kind of like me holding your hand through the, through

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the whole thing. So if you're interested in, in that,

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there'll be a link to that in the show notes,

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or you can send me an email Vicki@tinychipmunk.com.

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And let me know, you want to go on the

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wait list when that opens up. The final thing that

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I just want to talk to you about today is

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what you're going to charge for your product. So now,

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you know what your product is the cost to produce,

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or, you know, if you don't know now, you know

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it at some point, you're going to go through the

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process and work out all the costs. And let us

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assume that you've done your validation. I really hope you've

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done your validation and you know, people will buy it.

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So to work out, if it will be profitable for

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you, you obviously need to work out what you will

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sell it for. And I suggest putting a price on

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it. And so working out what you sell it before

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Before working out at costs, which is why we wanted

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to mention it on this podcast.

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And so you don't actually need to know all of

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the costs before you think about what your selling price

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will be. So why that might sound backwards or intuitive.

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I believe that if you know your ideal selling price,

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before you get the quote for actually produced it in

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your product, you can actually be a bit more objective.

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So you have, what I mean is here. I was,

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I don't want you to work out all of the

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costs and say, okay, this product is going to cost

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me 10 pounds of produce. Let's say, so I need

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to sell it for that. It's just a two 20

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pounds just to say that I'm going to sell it

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to 20 pounds. So it's going to cost me 10

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pounds to produce. Umm, but actually everyone else's selling it

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for 11 pounds, say M and you're, you know, you're

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not gonna make any sales because you will just spice

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too high, but you priced it high because that is

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how much it's going to cost you to produce it.

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I don't know if you see what I mean here,

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but I just feel like that doesn't quite work. So

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what it means is if you know, you're going to

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sell your product for, let's say you worked out that

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your product is going to sell it for 20 pounds

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and do you work out all of the costs? And

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when you add everything up, it's just not profitable. You

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can either do one of two things. You can tweak

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things. So you can say, okay, so as it stands,

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this product won't be profitable, but what will happen if

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I changed a packaging? What was happen if I shipped

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it in a different way? So it took longer to

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get here, but it costs me less money. What was

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happening if I, you know, rather than putting forward and

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a pack, I put a three in a pack.

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How would the impact of the price? Hey, you know,

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there are lots of different things. You can look at

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it as a kind of see if you can make

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it stack up or you could just put your idea

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of a side to now, or you could just say,

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do you know what are right now for the quantity

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I need to produce? I just can't. And you know

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that the way the market is what the kind of

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money these products are selling for, actually this isn't going

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to be profitable and you can put the idea aside

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and perhaps move on to something else before actually spending

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any money. So th so the main thing here is

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I just don't want you to be spending any money

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on something that, you know, potentially, why don't you want

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to see your money back? And I just mentioned this

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here, because I think it really makes sense for you

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to work out what you want, sell your product for

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before working out all of the cost sense to me

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that I mentioned it in this episode, as I say,

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it might seem a bit back to the front to

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you, and hopefully it makes some kind of sense.

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And you can see I'm coming from, I say, thank

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you so much for taking the time to listen. What

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I would love to know is what are the things

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that concern you about launching a product? Let me know,

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send me an email. It's Vicki V I C K

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I at tiny chipmunk.com M let me know, you know,

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what are the things that are stopping you from getting

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started, or perhaps you haven't got started and there is

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something that's, you know, it was a bit of a

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sticking point and or something that you don't know that

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is holding you back. Let me know. And I will

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perhaps Spears cover this in a future episode. So tahsnk

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for Listen today as always, please do share this episode.

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Please subscribe if you haven't already and do let me

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review. I would so appreciate that all.

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Thank you so much. Take care. Bye.