Updated: Apr 29, 2020
Door #1, Door #2, or Door #3?
When it’s time to find a manufacturing partner to create a jaw-dropping new game release CE or an interactive kids’ meal toy or a custom promotional item, who will give you the best deal? Who can deliver the quality you envision and stay within Marketing’s budget? Who will ensure all relevant costs are reflected in their bid? If these questions keep you up at night, read on!
When you issue a Request for Proposal (RFP) among prospective manufacturers, how do you compare their responses? What do you do when you get vast differences in project costs? How do you know what’s realistic? And who will deliver without nickel & diming you later? You don’t want to be surprised by what’s behind the partner “door” you choose – you want to know exactly what you’re getting. Well, we get it. (Ha! Had to throw in a pun there!)
From our side of the fence as a custom manufacturer, we can share advice on how to make certain you get back clear, accurate costs that lead you to the right partner. And despite what people say, you do need to sweat the small stuff!
Output vs. Input
You’ve heard it before – “you get out what you put in” or “the end results are only as good as the input allows.” Basically, when there’s room for interpretation in the RFP, then the quotes returned to you will be loose estimates vs. tight bids. Let’s say you need a box to house a special product – maybe a collectible holiday ornament. Will the box have a window? Do other elements need to be co-packed into the box later? Does your company have recycled content requirements for production materials? Is the box part of the product itself (a highly decorated hinged, keepsake) or more functional? You get the idea…the more precise information provided upfront, the more precise your quote will be.
Even if you are not sure about all the product details, it’s beneficial to provide concrete information in your RFP. You want all your bid recipients to quote using the same criteria: materials, dimensions, performance metrics (battery should last X hours), etc. – even if it has to change later. Think of it as your product blueprint. When direction is vague or left open to interpretation, you’ll end up evaluating quotes that seem like apples and oranges.
Pro Tip #1: Provide as many product specs as possible
When game publishers want to bring an element from the digital world to the real world as a collectible, full turnaround images of the character or artifact are needed for quoting. As well as reference for the figure pose, clothing, base environment, and colors. Plus dimensions. In an RFP situation, costs can be wildly different if these details aren’t confirmed. Factories are better able to provide firm quotes if they know exactly what they have to create.
Whether you’re able to provide these files or you’re asking your manufacturing partner to concept and create these files, doing so will minimize assumptions for costing purposes.
It’s great to get actual 3D files from the game to vet these details, but be aware that these files will have to be re-created in engineering software to become “solid” for manufacturing. Also, many elements that work well in game may not work as tangible pieces. For instance, weaponry or cords may be too thin to reproduce without breakage. Or there might be undercuts which would prevent the piece from being extracted from the mold. Perhaps the texture must be enhanced so it doesn’t get “lost” after injection.
Without getting into all the nitty gritty, suffice it to say there are costs for this part of the process that can add up pretty quickly.
Pro Tip #2: Ask about file work & development costs – are they included and to what extent?
A corollary to Pro Tip #2 is to provide final 3D files, if possible, to your manufacturing partner to keep changes to a minimum once the project is underway.
Realism & Complexity
For sake of discussion, why don’t we produce a licensed character snow globe – Cinderella and her magical horse-drawn carriage! How intricate and detailed should it be? So realistic you marvel at its authenticity? Or great quality, but let’s not overdo it?
Two factors contribute to realism, at least for our example. The first is the level of detail in the structure and shape of Cinderella and the carriage. The more intricacy and complexity of the shapes (imagine the horses’ manes are flowing and you can see depth of the dimples in Cinderella’s cheeks), the more lifelike the item appears. Greater dimensionality can be created by adding individually molded accoutrements throughout the scene – maybe pumpkins on the side of the road or her beloved mice friends nearby. Sounds awesome, doesn’t it! Not a problem, but you’ll need enough tooling molds to account for all the parts and each mold cavity must have high definition.
The other factor is decoration – how much paint detail will be used? Is there glitter fairy dust in Cinderella’s hair? Gold antiquing on the carriage? What we’re trying to determine is how to set up a factory production line to achieve the desired effect. Clearly, the more intricate and detailed the deco, the more “paint operations” that will be needed on the line, resulting in more time and costs. That’s great, if that’s exactly what you want – not so much if that blows your budget.
Pro Tip #3: Provide an expected level of realism, with pictures of comparable items
It’s no surprise that the higher the production volume, the lower the per unit cost you’re likely to get. However, a couple of things can make the unit price in one quote appear very different from another. Tooling is a biggie.
Creating a tool can be quite expensive, depending on the product (complex vs. simple). Typically, there’s a significant time and cost investment in proper tooling. This isn’t as much of an issue for high-run products, but for lower quantities or low-cost items, it can really jack up the unit price.
The same is true for costs related to product development, testing, fulfillment, shipping, etc. Are these costs folded in to the provided unit cost in the bid response? Or are they itemized separately? Or, have they been considered at all?
Pro Tip #4: Request a cost breakdown & ask for production-only unit costs Remember that apples-to-apples analogy? Now it will work for you.
While shipping and distribution may seem like a long way off when you’re first considering costs for a project, it’s key to note that they can impact the project bid. Let’s begin with compliance. Each country or region has materials and safety standards that must be met prior to product importation. That means an independent lab must test and inspect the product to allow it to pass through Customs. So, it’s helpful to advise the likely areas of distribution to make sure appropriate testing costs are included.
Knowing the number of countries for distribution also allows more accurate Freight on Board (FOB) or Exit Factory costs. If you are shipping your product to eight destinations, then the factory must separate each quantity and palletize or floor load for each location, create documentation for China Customs, and arrange transportation to the port. So, if you have a strict project budget, it’s good to know these expenses up front.