Chapter 12. Order molds

This is where more real money is spent. After I bought the 3D printer, I knew at least that if my original product idea fizzled during the design stage, I had a few choices. I could still use the 3D printer for other product ideas, maybe sell prototyping services using it, or just sell the printer on the open market if I had to.

Molds, on the other hand, can be used only for manufacturing the specific pieces they were built for, so the decisions you make during mold design are critical. Cascade Plastics guaranteed the designs I gave them would all fit together as intended when they were manufactured.

• Having a guarantee of product assembly from the mold builder is critical to managing risk during mold creation.

I did price research over the internet and got a few quotes. Mold price quotes came in anywhere between $2,000 and $25,000 a piece. The low prices were generally from overseas and the higher prices generally from companies in the US. Again being the novice that I was, I was not comfortable with the risks associated with creating the molds 5,000 miles away. I felt a strong need to stay in direct person-to-person contact with whoever was going to manage creating my molds, so I stayed with Cascade Plastics who operate some 35 miles from my home. I was able to drive down to them at a moment’s notice as issues came up. I cannot imagine having to work with a mold builder who lived 500 miles away, let alone on another continent. The chances of making serious mistakes would have been a lot greater if I had chosen an overseas partner. Even as it was, any one of several unnoticed subtleties could have destroyed the value of the molds, so in-person attention was important at this early stage.

It is likely that whomever you choose to make your molds will be the same company that uses those molds to manufacture your product. Committing to buy molds from a company is like picking out an engagement ring: You can get out of it, but do not expect her to give you the ring back.

Make sure you are happy with the folks creating your molds; you are going to be dependent on them. Like the engagement, you can take your molds to a different manufacturer, but a different manufacturer will not want to take responsibility for how they perform. That is assuming your molds are even compatible with another manufacturer’s injection equipment.

As mentioned earlier, perhaps the minimum price you could pay for an injection molded piece of plastic might be about 150% of the cost of the material used in the piece itself. Many different kinds of plastic pieces cost a lot more than 150%, but this is an important number to remember for several reasons. First, a manufacturer in China has to pay roughly the same price, for example, for HDPE[1] resin as you do in Wisconsin, USA or Lancashire, UK. A manufacturer might get a slight discount when ordering large quantities of resin, but they can get that discount in any country.

If you’ve done your homework and your designs are ideal, the next biggest cost is the labor that goes into getting your product into a box. If it takes 20 minutes to get your $20 product into its retail container, then the difference in labor prices in Thailand versus Lancashire will be significant. If it takes just one minute to get your $100 product into its retail container, there is little value in manufacturing your product in overseas.

A way to reduce the need to manufacture overseas is to take the labor out producing it. Ikea is a respected and successful Swedish company that ships its products all over the world. It takes much of the manufacturing labor cost out of its products by passing that labor on to the customer. For many labor-intensive products like furniture, Ikea sells the product unassembled; the customer puts the product together. Ikea saves money different ways, from bulk manufacturing and materials optimization to process improvement, just like it says on their website. The real savings come in not having to pay for (1) the labor of assembling your DVD Cabinet, and (2) the cost of shipping a much larger box (had the cabinet been preassembled).

Minimizing the labor that goes into manufacturing your product will enable you to manufacture your product closer to home, at a cost close to what you would pay in a developing country. What’s more, there are tax incentives for keeping your manufacturing within the United States (and probably in other industrial countries), and you do not have the shipping costs, customs clearance charges, delays or risks associated with manufacturing overseas.

• Selling customer-assembled products can cut out much the manufacturing labor cost.

Many large companies already have the infrastructure in place to manufacture, ship, import and distribute from overseas. Much of the challenges may not apply to them. For you, the first-time, locally restricted product manufacturer, it is likely wiser to produce your product close to home; within driving distance of where you live if possible.

Consider making a set of temporary molds. There are molds and there are molds. Some are designed to spit out millions of parts before wearing out; others are good for only a few thousand pieces. The latter are cheaper to make and are often used to perform a less-expensive test of the product using something that is much closer to the expected final product.

Cost of this stage: $18,000. Costs so far: $48,800

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[1] HDPE: High Density Polyethylene