How To Cut Production Costs, Not Your Team
When funds run thin, companies tend to start cutting staff first. However, this method of saving on costs comes at a price. Aside from placing a larger burden on the rest of your working staff, which could be detrimental to production, it diminishes the value of your staff.
The key to beating a period of limited funds is to be proactive and cut production costs before your budget takes the hit. Keeping a watchful eye on production leads to a better product at a lower price, giving you an essential edge over your competition. Here’s how to cut cost on production, not your team.
Start With The Price Point
After choosing a product, the next step is usually choosing a production method followed by the price point. While there’s nothing wrong with this method, it isn’t going to help you cut costs. Instead, let the price point dictate the production.
Let’s say your company sells fitness trackers and the average model on the market sells for $150. By focusing on production first, you may add features like a leather wristband or larger screen that are nice but not necessary. At the end of production, let’s say the cost for each band was $100.
By focusing on the price point first, you can make decisions in production that bring the cost to make these fitness trackers down to $50. That might mean a plastic band and standard sized screen, but it still lets you deliver what the target audience is looking for while cutting costs.
In-house production has its benefits, but there’s no denying that outsourcing saves on production costs. Produce what makes the most financial sense internally, but let someone else handle the bulk of your manufacturing.
The cost is cheaper and finding the right company to partner with can yield a wide variety of benefits. Speaking of the benefits from outsourcing…
Keep Your Manufacturer Local
Outsourcing to China is cheap, everyone knows that, but you might not end up with the quality you are looking for. By staying local, you’ll find a manufacturing partner who can work with you through every phase of the process, effectively cutting costs when problems arise as well as a headache.
For instance, you can trust insert molding from Weiss-Aug to bring a high level of quality to your design while their company can be your go-to for several stages of production. The choice is yours, but cutting production costs while maintaining a top-quality product requires dedication and a close relationship with your supplier
Don’t Be Afraid To Experiment
The majority of buyers expect particular products to look and feel a specific way, which can stunt your company’s imagination. Instead, choose to break the mold and think outside the box. The most successful products in history have delivered something consumers already owned in a better, more ingenious way.
This is easier said than done, yes, but new production methods and unconventional materials can quickly lower your costs while increasing your bottom line in the end. Heading back to fitness trackers, who wants a product just like the FitBit? Why not deliver something that takes the FitBit to the next level in a form that’s ten times more appealing? With all of your staff still on board, you’re sure to find creative minds that can make your product the next best thing.