Always the big question, of course! The price of placing a new plastic product on the market is comprised of five factors. First, there is the cost of engineering. The engineering may be of two types, product design on the product itself, which consists of design or redesign of the product to minimize the cost of production, enhance ease of use or appearance; the other is the cost of designing the tooling – the equipment used to manufacture the product. The second portion of the engineering is usually included in the mold costs. Product engineering is usually charged as a separate cost. Mold costs, of course, involve the costs of producing the molds and tools needed for production. The third factor is the cost of actual production and, if needed, assembly of the plastic product. This may involve items from outside vendors, such as bolts, wire, “O” rings, etc. These are usually referred to as part prices, the cost of a finished article. The fourth factor is packaging costs. These costs include vendor packaging – what the final customer sees, overpack – the box in which a quantity of vendor packs are sent to the vendor, and skidding – the cost of a pallet and wrap for shipping one or more overpacks to the vendor. The final expense, of course, is the cost of marketing , which includes advertising, stocking and shipping of the product. Surprising to some is the fact that, in most cases, the marketing costs are the most expensive, and require the greatest capital outlay.
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