July 9, 2022

Revealed: Costs For Custom ODM Products in China [From $10k to $111k)

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  • Revealed: Costs For Custom ODM Products in China [From $10k to $111k)

While competition was going out of business, MorphoMFG doubled in size during the pandemic. 

Three key things allowed us to achieve this: 

  1. Competent, dedicated & passionate experts 
  2. Sticking to our Component Control Method on every project
  3. Utilizing our internal list of verified suppliers & manufacturers for our clients 

When you have the right people, proven methods, and just the right connections in mainland China, getting ODMs right the first time around is not just possible... It's a real possibility for entrepreneurs from all walks of life - including you.
One of the first things you'll be wondering right now is what kinds of costs can you expect?

Here are some examples without beating around the bush, then I'll get back to some warning signs to look out for when considering getting a quote from any ODM manufacturer in China.
Note that these estimates come from real clients who paid MorphoMFG four figures to get the correct quote.

For those who prefer video content, here’s a video summary of what you’re about to read below.

Real Quotes From Custom ODM Products at MorphoMFG - From $10k to $111k

1) Development Quote for a Luxury Playmat (Textile): $1150

Kicking it off with a luxury playmat, coming in with only $1150 in development cost - but there's a reason why this development quote was so low.

Textile projects are the least expensive to develop. Textile products usually do not require molds or complex tooling, which is a large portion of development costs. The prototyping process for textile products is quite inexpensive and does not take much time to go through several iterations to get a pre-production prototype you’re happy with.

Some textile projects like high-end bags or complex cut + sew methods cost significantly more to develop and prototype. However, this project was as simple as it gets.

This customer had already taken care of research & development, and they provided the design & pattern to us. This project used off-the-shelf packaging, which eliminated additional design and prototyping costs. The only development cost they encountered was the sample/prototype fee ($1150) which is quite inexpensive compared to plastic or electronics projects.

Simple project, smallest quote on this list. 

Next is an example of how much an electronic game ODM costs to manufacture in China. This quote is 5X higher than the playmat, and here's why.

2) Quote for a Kids' Game (Electronic): $43500 Development ODM Cost

This project came to us in the conceptualization stage. This means that there were zero design files, zero prototyping, and zero functionality specs.

We only take on projects like this when clients have a strong business plan in place, and we believe they have what it takes to start and scale a hardware business on the front-end (branding/marketing/networking/fulfillment, etc)

30% of our clients come to us with nothing more than a concept.
50% come to us once they’ve created some rough design files or homemade prototypes.
20% come with complete design files that only require a few tweaks for DFM.

Regardless of the project stage, the sooner we get involved, the smoother the projects tend to go. Often, a client will spend thousands of dollars creating design files or completely un-manufacturable prototypes - which we inevitably have to re-do.
We were responsible for every aspect of this product’s development:

  1. Conceptualization Design
  2. 2D + 3D Design Files Creation
  3. Electronics Development Engineering
  4. Prototyping
  5. Mold Creation

Nine factories were involved in developing and manufacturing this product, all spread across the Pearl River Delta (PRD). Luckily our offices are located within the PRD - where the world's best factories and engineers are located, an area often called the world's workshop.

We are also close to Shenzhen, widely considered to be the world's best, largest market for electronics. Our team travels back and forth there every week. Proximity is extremely important in manufacturing - that's a massive part of why this product worked out so well.

The total per unit for this project was $16/unit at 3000 units which our client was able to retail successfully for $49.99 and sell through the first purchase order in under six months!

3) Quote for a Board Game (Paper): $16,500 ODM Cost

This $16,500 ODM quote covered:

  1. The prototyping phase
  2. Samples and tooling
  3. Die cut design for packaging 
  4. Paper board game
  5. Board game pieces

Followed by two rounds of sampling to perfect the colors.
We had to deal with two main issues while managing this project.

We were able to catch a clouding issue early in the development process, saving a good amount of time and money. This client had selected Pantone colors that were not exactly what they wanted. They looked fine on the swatches, but when printed on the prototype, they just didn’t look right.

Pantone numbers are one of the hardest things to match. People often use their computer and pick a color without knowing what Pantone's are. We had to do an additional round of prototyping with an adjusted Pantone color before moving into production.

The second complication in this project was upgrading the tooling. We often recommend better tooling/molds to our serious clients so that they can manufacture more products before the tool needs replacing OR to increase the quality of the final product with to tighter tolerances or better surface finishes.

During early quality control vetting sessions, we found that using the cheaper tooling resulted in puzzle pieces occasionally getting stuck in the die cutter and not making it into the final set - unacceptable! We strongly encouraged this client to go with the higher quality tooling, which was only 30% more expensive than the initial tooling choice.

This higher quality tooling also allowed them to boost the tool's lifespan from 4k units to 8k units! This client was incredibly happy with the final result and has been rapidly scaling their business since the initial production run.
Thinking about manufacturing your own board game?

Click here to get started.

4) Quote for Electronic Seasoning (Metal): $54,650 ODM Cost

This $54,650 ODM quote covered:

  1. Feasibility Study
  2. Re-design proposal 
  3. Industrial Design + Mechanical Design + Electronic Design
  4. Functional Prototype Creation
  5. Molds + Tooling 

It took eight people involved from 3 departments 6 months to get this 32-component prototype our client supplied ready for production.

Initial issues with this project:
This client designed a beautiful but utterly unmanufacturable prototype. It was a complex product with metal, plastic, electronic components, and a motor.

The prototype was designed without considering any manufacturing method limitations, so we had to dedicate an entire team of engineers to re-design their concept from the ground up to create something that could be manufactured.

Our client could have saved 30-40% of their development budget if we had been involved from the beginning. No one likes being told that they’ve wasted their time and money on unusable development that needs to be completely re-done… but it happens more often than you’d expect! 

We can take your project on no matter what stage you're in, but if you're still merely hanging onto an idea, it's best you contact us before doing anything. 

5) Quote for a High Tolerance Plastics Project: $231,680 ODM Cost

Some projects require VC buy-in to get through the development phase. Our onboarding process is designed to give you all of the information VC would need to evaluate the cost and time it will take to get a project ready to manufacture.

To land this VC deal, our client needed to provide all of the costs and timelines for the most expensive aspect of this project - mold creation. Molds are often the most significant investment in a project and can range anywhere from $5000 - $75,000 each, and this project required seven molds to be made.

They supplied us with high-quality design files for all components and only required minimal DFM tweaks. They did need some help with electronics development to ensure their firmware worked reliably on their PCB design - but their engineer had completed 80% of the work and was happy to offload to our electronics engineer to finish the project. The $11,000 electronics development cost was not included in the quotation below.

We completed the onboarding phase and provided quotes for the remaining development in less than 30 days, allowing our client to close the funding round with their VC successfully. 

That’s it - 5 quotes from real customers here at MorphoMFG.

As you can see, the costs vary every time because we are building something unique. It takes time, planning and an entire team to put together these quotes for our customers, which is why we charge for our onboarding process.

But when we give you the quote, you know you can trust the numbers we give you. If you are interested in finding out more about how the process works - schedule a call with our team.

Can I get a free ODM quote from Alibaba in 24 hours?

Answer: Yes, but does that mean you should? Going for fast quotes can give you one of two things: You’ll either get a low ball quote that’s meant to serve as a mouse trap for your deposit (later you find out costs are much higher). Or you get an extremely high cost estimate for an off chance you might fall for it. They do this because there is no way to know the costs without doing at least 30 days of research.

How to get accurate quotes for ODM manufacturing projects? 

Answer: It depends. Is your ODM product idea developed? Do you have design files, pantone numbers (colors), list of materials, product assembly plan. Is the PCBR designed? Do you have Gerber files? If yes, all that’s left is a simple explanation of your idea and you’re all set for onboarding and getting accurate cost estimates. If you have none of this, or don’t even know what some of these things are, then you need to have an idea development / engineering team create all the files for you.

Get in touch with an experienced manufacturing company in mainland China. Hire their engineers to do a deep dive for your idea. They will ask important questions that may even make you change the direction you have in your mind for your idea. But not every manufacturer is going to be a fit for your idea, so it all starts with a consultation.

How to Protect Product IP When Outsourcing ODM Manufacturing to China?

Answer: Work with a manufacturer in mainland China that has connections with many vetted factories. They will send every component of your product to a factory that specializes in that material or design for that component. At the same time, each factory has design files only for the component they are manufacturing. They have no idea what the assembled product looks like. You’re safe from copycats at this stage and ensure first-to-market.

Warning: Getting Fast, Free Quotes vs. Paying & Waiting

Consider the following situation: An unexperienced entrepreneur starts hunting for cost estimates. 

They are presented with this choice: 

  1. Pay $0.00 and get quotes same day 
  2. Pay 4-figures and wait 7-14 days 

Obviously, many jump at option number one and they end up basing their whole business plan around what I can only call... a trap. 

In most cases, what you get in option number one isn't a quote at all. It's a ploy, a mouse trap made to look like something you want, something you can plan your business around. 

It's a piece of cheese you want to jump on, it's right there, and please forgive the analogy, but while you do want to see holes in authentic Swiss cheese, you definitely don't want them in your business plan. 

And then you go into manufacturing and all hell breaks loose. There is no need to ramble on, just consider the $50,000 mouse trap I noted a minute ago. 

What do you get with 4-figures and 7-14 days then?

  1. You get a team of experts with experience in handling and fixing all kinds of ODM issues, you get ready in advance
  2. These experts talk to you, ask you important questions, figure out what it is you want exactly
  3. Then our engineers make a deep dive on your project, they compare, they brainstorm, they consider 100s of things, and then they take our list of verified, proven factories & suppliers, and find the most cost-effective solution for your ODM 
  4. They figure out whether what you want is doable, within what budget, and finally, they prepare a report, and yes - this includes cost estimates you can vouch for with 100% certainty to your investors, family members, partners, co-founders...

Honestly all of this isn't doing our teams justice. The amount of time they put into giving you the information you need can't be evaluated. This step is absolutely crucial in any manufacturing project, especially ODMs, where so many things can go wrong. 

Get Started: Do it Right the First Time Around

Schedule a call with our friendly business development manager who's going to tell you how onboarding works and answer any questions or concerns you have.
Whether you're ready for manufacturing or only have an idea, you can't go wrong with asking & getting advice from experienced manufacturing experts.
There is no obligation or cost of any kind for your call.
We'll find out whether we're a good fit quickly.

There is no risk to you here at all, the worst case is you gain valuable insight. So click here now & get started. 

About the author

Josh Fairbairn

CEO of MorphoMFG, fluent in Mandarin, Blogger, and Youtuber. Josh loves interesting materials and the craftsmanship that goes into creating innovative products - watches, tech, games, whisky, leather, wood, blockchain & electronics. Josh and his team in Guangzhou, China are striving to create (& consume) the world’s highest quality products. Partnering with entrepreneurs globally to help solve the world's problems - whether small or large.

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