Hey y'all! I began this product development journey 10 years ago, designing and manufacturing bedding for dorm rooms, and now here we are! Helping clients produce everything from soft accessories, textiles, and beauty to home goods and tableware -- all custom branded and/or private label. Although each product is different, the design and manufacturing processes have so many shared attributes.
Why private label? We want to help you build your brand, not someone else's. By bypassing purchasing product at wholesale, you allow yourself room to sell at both wholesale and direct to the consumer. Increased flexibility and dramatically improved margins. Yeah, buddy!
Let's dig into today's topic: Custom Tableware Collection Costs & Minimums
Topics Reviewed:
Custom Tableware
Everyday China
Fine Bone China / Porcelain China
Cost to produce and MOQ for custom Everyday China
Cost to produce and MOQ for custom Bone China / Porcelain China
Porcelain & Ceramic Tableware
A few key questions that will help guide you in determining what, how, and where to manufacture:
What is most important to you: Cost or quality?
What is your target Retail Price Point?
If Cost, for a traditional everyday style dinner plate (like HERE) with a target retail price of ~$54 you can expect pricing to be in the range of $8 - $12, MOQs (minimum order quantities) to be in the range of 500+ per design (many times you can negotiate multiple designs), and production to take place in very large scale mass-production venues.
If Quality, for Formal Porcelain China / Bone China style dinner plate (like HERE) with a target retail price of ~$115 you can expect pricing to be in the range of $22 - $28, MOQs (minimum order quantities) to be in the range of 200 per design, and production to take place in very intimate environments with a small team of artisans applying art by hand, or hand-painting each piece.
I always love to conclude with a little business case, because at the end of the day, as a business owner the bottom line is your backbone for buy-in, credibility and longevity. With a business case, we are quickly answering the question, "does this program make sense?"
If your top priority is cost, here is your formula:
(MSRP * MOQ) - [(Production Cost * MOQ) + Shipping + Art/Design] = Gross Margin
($54 * 500) - [($12 * 500) + $1000 + $750] = $19,250
Production Cost: $12/pc
MOQ: 500/design (typically you can negotiate 2+ designs)
MSRP: $54/pc
Miscellaneous other costs
Shipping: I recommend budgeting ~$1000
Art/Design: I recommend budgeting ~$750 per design
Sampling: More often than not, you can negotiate to have your sample cost credited to your final invoice as long as you go to production, so I'm leaving this out of the equation. Feel free to ping me if you want to discuss further!
So, you turned a $7,750 investment, into $27,000 with just one order! With the exception of a few promotional expenses you'll probably have, that's $27,000 in revenue and $19,250 to your bottom line! This is ~$71% margin. Not bad!
If your top priority is quality, here is your formula:
(MSRP * MOQ) - [(Production Cost * MOQ) + Shipping + Art/Design] = Gross Margin
($115 * 200) - [($28 * 200) + $650 + $750] = $16,000
Production Cost: $28/pc
MOQ: 200/design
MSRP: $115/pc
Miscellaneous other costs
Shipping: I recommend budgeting ~$650
Art/Design: I recommend budgeting ~$750 per design
Sampling: More often than not, you can negotiate to have your sample cost credited to your final invoice as long as you go to production, so I'm leaving this out of the equation. Feel free to ping me if you want to discuss further!
So, you turned a $7,000 investment, into $23,000 with just one design! With the exception of a few promotional expenses you'll probably have, that's $23,000 in revenue and $16,000 to your bottom line! This is ~$70% margin. Not bad!
*Please note, these production costs are on the high side to allow for very conservative projections. Once you get into the process, I think you'll be pleasantly surprised by lower production costs.
What did you love? What did I miss? Hit me up with questions, this lights my fire!!!
Mallory