I am looking to get an opinion on what is a fair percentage to budget into a small footwear brand that will manufcature 40,000.00 units that roll out to retailers at Â£30 for sell through at Â£90.00 - Â£120 :
What budget percentage should be factored for testing, developing, designing , prototyping?
What budget percentage should be factored in for production and materials?
any help would be greatly appreciated, I have set amounts in mind but want to establish how competitive I am in the market.
normally, footwear development cost are taken as overhead and maybe only tooling costs are worked in an amortization into the FOB price as a guideline. i would say normally that if you can amortize your tooling costs over 3 years, its not too bad. usually about 1/2$ per pair could be OK. (ie. 10 TPU outsole molds at 6,000$ each for 10 size ranges = $60,000) which is 10,000prs per year at $2.00 added cost FOB).
hope this helps.
there really is to my knowledge any guidelines for added development, testing costs for a standard budiness model.
as for standard material cost per pair, i wold say given normal materials, something like 65-80% of FOB cost is normal depending on your product and materials.
labor cost is normally around 10% and developmentcost depening on the product and fty could be around 1%.
a lot depends on your qty. fty and product so it is hard to give firm numbers.