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Low Volume Manufacturing As A Bridge

By admin | December 13th, 2016 | Leave a Comment

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We would all love to sell 1 Million + of our new part/product, to score those major distribution channels, with orders that just keep pouring in. But what if you can’t hit a home run right off the bat, how do you keep your idea alive long enough until major distribution channels believe in your part/products power? A lot of projects fail or end up having to sell their IP rights because they run out of capital. Low Volume Manufacturing along with the ability to direct market your product through channels like Amazon, EBAY, your own website and the like can keep vital cash flow coming in, to bridge the low volume to high volume manufacturing divide while you continue to work on landing major distribution channels and on improved versions 2.0 and 3.0 of your part/product.

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PRICE – It is easy to get sucked into thinking you need the lowest possible per piece price in order to make it, while that may be true for major distribution channels it is not necessarily true when you are able to sell direct. For example, your target retail price is $20, whether you sell it yourself or through major distribution, the target price is still $20. To work with major distribution you may have to hit a cost price of $5, sell to them for $8, giving you $3 profit per unit on a $20 retail. But, sell direct for $20 with a low volume manufacturing cost of say $8 per piece gives you a potential $12 profit on a $20 retail. This example is oversimplified but for many products it can be a reality. The point being paying a slightly higher per piece price, when you receive the majority of the profit, can be a way forward and actually deliver greater profit with less risk in the short to medium term.

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TIMING – Depending on the low volume manufacturing service you choose you could see parts in a couple of days (3D Print & CNC Machining) to a couple of weeks (Rapid Tooling). All of these low volume manufacturing options will help you get to market faster so you can start earning profit to fund your eventual high volume manufacturing needs. But, don’t just think of speed to market when you think of timing benefits associated with low volume manufacturing. There is also the benefit of being able to change your design quickly to versions 2.0 or 3.0 based on feedback from early sales. When it comes to 3D Printed or CNC Machined parts the change can be as simple as giving your low volume manufacturing supplier a new CAD file.

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SUPPLIER – When picking a low volume manufacturer many of the same principles apply, you qualify reputation, speed, price, ect. But for low volume manufacturing you also want to look for flexibility and capacity. Flexibility in the manufacturing services they offer, as you may want to start with 3D or CNC and then switch to injection molding at a later date. Flexibility in the way that they treat your project, are they willing to adjust to your needs or are they trying to push you into what works best for them? Do they have the capacity to ramp up their low volume manufacturing ability to meet your rising needs? Anyone can make you 1-10 of something but can they make you 100, 1000 or 5000 and what will their timing be? Also, don’t forget about finishing options available from your supplier. Another benefit of low volume manufacturing is that you can try several different finishes to see what option will work best for your part/product without a major investment in one finish over the other. None of us are married to one supplier once we pick them but it is nice to know the flexibility and capacity options of a supplier, to see if they can be a medium to long term possibility for you.

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Low volume manufacturing may be just what you need to get your part/product off the ground. With speed to market, flexibility, and low to nil capital investment your chances of making a profit off the parts/products you make is very high. As for the knowledge you will gain from early production, it can be invaluable.

To start your free low volume project review email us at FreeQuote@HLHPrototypes.com today.