Injection molding is a big business with a lot of potential for growth. Experts estimate that the industry’s market size could soon reach the massive value of $266.1 billion by 2030, an impressive growth for any industry. In the R&D department, new breakthroughs are still abundant, making sure that future production methods will be more efficient and less wasteful.
If you are looking to invest in this industry and become an industry leader, now is the perfect time to become one. However, before you can stay ahead of your competitors, you will have to learn how to price your products and give a reasonable quote to your customers. This guide offers some insights into how you can do that.
Gathering Demand Information from Your Client
The most important information that determines the cost of your injection-molded products is the requirements of your clients themselves. Every client will have their own vision as well as requirements regarding how the final product will turn out, so it is essential that you study the requirement documents first to understand what clients need from you.
Some key information you will have to keep in mind when having meetings with your clients include:
- Product specifications: These parameters essentially decide what the products will look like and feel like.
- Material requirements: Materials have a huge impact on the cost, as some materials will be inherently more expensive than others.
- Quantity: For large orders, there might be incentives to give your client a discount.
- Delivery schedule: Rushed orders should always be charged more due to their rushed nature.
Calculating Material Costs
Material costs will probably be the single most important factor to take into consideration. Some materials will cost a lot of investment in terms of money as well as handling knowledge, which will increase the overall cost of the project exponentially. Examples would be advanced thermoplastic materials or silicone, which generally offer products of superior quality. If your project includes these materials, make sure to add extra costs to ensure that you are getting your fair share of the profit.
One thing that most manufacturers tend to forget about is the wastage rate. During the production process, some amount of raw material will be lost due to errors or other factors. The amount of wasted raw material varies depending on your production efficiency as well as the material itself, but it can become a major issue down the line. Thus, you should try to calculate the estimated loss for the materials you are using and take the amount into account when presenting your quote.
Take Labor Costs into Account
Injection molding is a highly automated process, but you still need skilled workers to work on-site to make sure that the production line is working properly. These workers also have to operate machinery in potentially hazardous situations, so you can expect elevated wages compared to other workers. That is not to mention the highly skilled engineers who draw and design the molds. These workers have to be compensated well, or else you will lose your talents.
When you add labor costs into the equation, give it a bit more weight compared to the other factors. These labor costs should also include benefits for your team in addition to their own labor as well. Talents need to be nurtured after all!
Calculating Processing Fees
Injection molding requires specialized machines as well. These machines are expensive, and they take a while to be made. Thus, you will have to take the procurement fees for these machines into account as well. Do keep in mind that the larger the machine, the more expensive the quote should be. For reference, the costs of large industrial machines for injection molding range from $50,000 to $200,000.
Aside from the machines, the injection molding process also involves intensive use of electricity, so this needs to be taken into account as well. That said, it would be a good idea to give this factor less weight in the equation if you are tackling a large project, as clients would certainly appreciate a small discount.
The mold used in the injection molding process is a critical factor that determines the success of the project. The costs for the average injection mold range from $1000-3000, depending on the complexity of the mold itself. To help simplify the calculation process for mold costs, here’s a simple formula: The price of plastic injection molds = steel raw material price + processing cost + other costs (surface treatment, mold trial, etc.) + profit. As always, you should consider buying injection molds from reputable suppliers such as Art Tangent to ensure you are getting the most efficient injection molds for your project.
Considering Additional Costs
Now that you have taken into account all the primary costs of the project, it’s time to take a look at the additional costs that may be incurred during the process. They are transportation costs, packaging costs, and taxes. A lot of these additional costs will not have a fixed amount until the end of the project, as they can be time-sensitive costs. Thus, you should always add a bit of extra fees into your final quote to cover these costs.
Present the Quote and Get Feedback
With every factor taken into consideration, you should arrive at a finalized quote now. It’s time to present it to the client! Do keep in mind that you might receive a lot of pushback from your client, as they will probably want to keep their business expenses at a minimum. You will have to negotiate with them and cut down on some costs to meet their expectations.
The most important factors to take into account when you are quoting plastic injection molding products are the material costs, the labor costs, and the processing fees. Aside from these main factors, there are also additional costs that may vary a great deal depending on the quantity of the products or the time of delivery.
References:
http://www.precedenceresearch.com/plastic-injection-molding-market
