Unfortunately, bringing an invention to market is always going to cost you money. How much money is inherently subjective and can be negotiated, but there are certain costs that will need to be paid no matter what. You should always expect costs to accrue from design, development, and tooling needs, but it’s also necessary to include costs for initial supply orders as well. With all the different ways you’ll be spending your money, it is vital that you know the various cost reduction strategies available so you can keep more dollar bills in your pocket. Here at Pivot, we help clients perform cost reductions on their products all the time. So we decided to create a list of 5 simple methods to reduce your production costs.
Reduction in Cost of Materials
One of your biggest expenses when creating any invention will be the cost of your materials. While you might think that some materials are vital to your product, take a second to step back and look at all the necessary factors in your design. The way your materials are positioned in the marketplace can change day by day due to supply and demand, or even politics. Do your research beforehand and keep an eye on the marketplace for shifting prices on materials, which can lead to massive cost reductions for your product. You can also seek out bargain buys for materials, long term supply agreements, or even try bartering tricks such as trading your finished goods for those raw materials.
Reduction in Cost of Production Location
Finding a location for the production of your product can be a pain. This can especially be the case when you don’t live in the area, there isn’t viable communication with the production facility, and you are handling all of the communication on your own. That’s why partnering with a company who owns its own production facilities globally can exponentially speed the process and allow for a larger production cost reduction. Luckily for you, we do all of the above, from freeing you from the stress of supply chain management to finding you the best deals with our global manufacturing network.
Reduction in Cost of Design
Sometimes you might think that your product truly needs that extra little feature – but that one extra feature could cost you thousands of dollars in production costs. What did consumers enjoy about your product when you had it tested? What features were they confused by? Balance your choices based only on what you’ll really need to keep consumers happy.
Reduction in Cost of Prototyping
Prototyping is extremely important when creating a proof of concept for investors, but becoming stuck within the never-ending cycle of re-prototyping and re-design can be harmful to your company. The process can take time which could have been used to get your idea to market more quickly, ultimately reducing your costs across the board.
In the engineering phase, time will literally equal money, so while it is not a good idea to rush your product to market, it can be helpful to expedite the prototyping phase by using virtual models (Computer Aided Design). Not only will this allow you to show a viable proof of concept, but it can help your engineers and supply chain speed up the process. However, keep in mind that there are some investors who would love to see a physical model, so do your research beforehand to determine what is best for your product. Check out our eBook on prototyping while you’re at it to get a better idea on what you might need for your invention!
While the JIT (just-in-time) production system has received criticism in recent years, it still remains one of the most effective ways to cut costs for your company. By utilizing “just in time” production, a company is able to cut carrying and inventory surplus costs by only ordering what is essential and necessary before the product goes to market. However, keep in mind that this will add heavy pressure on your suppliers, so it is highly suggested to discuss capabilities with them beforehand to make your needs clear and maintain a strong relationship.
Interested in finding out more about what Pivot can do to reduce the cost of your product? Contact us today, whether you’re just beginning the design process or already have a finished product.