PI-02 Pitcher Filter OEM/ODM Cost Analysis

Introduction:

In general, importers or distributors are more focused on distribute channels、marketing and commercial. But when they are looking for ODM/OEM manufacturer, they always make sure they shop around before making decision. Pitcher this product does have some unknown techniques, unless you invent a product from scratch, otherwise it is difficult to know the exact cost. In this article, let’s talk about how non-insider could analyze the cost of every parts of PI-02!

1. Difficulties in studying the costs of other manufacturer

If you ever visit our neighbor country and trying to purchase pitchers, you may hear this kind of conversation from the factory owner or the sales person: 「the quality definitely no problem」「we definitely use raw material, never use recycle material」「we promise we never cutting corners」「we export a lot of container to India、Dubai every month」; And then, they are always very welcoming persuade you must accept their invite for their banquet, in order to achieve this business. After few glasses of wines, ended up totally forget about ask the cost for pitchers.

2. Understand PI-02 Pitcher Cost Structure

Let PI-02 be the example for us to explore further. In the same making pitcher, different manufacture design can make component needs different. Some design might need 10 different parts and some might just need 7 parts. Of course the cost will be higher when there are more parts and assemble salary will increase. There is more probability increase defect rate and various losses.

Now there is material selection, usually will use：AS Resin (Polystyrene)、ABS (Acrylonitrile)、PP (Polypropylene) or Silicone water stopping washer.

3. Filter material is also focus point for pitcher cost

The price can be different due to filter material quality、quantity and the material used. Generally a formal filter will filled in with 80% of silver impregnate granular activity carbon and 20% food grade low sodium ion resin.

So why do we have to use silver impregnate granular activity carbon？And why we use low sodium ion resin？

1.We know that silver can kill bacteria. After active carbon is treated with silver, it can also inhibit the growth of bacteria. And of course the price will be more expensive, much more expensive.

2.When ionic resin exchange with water, it will release sodium ion. When human body observed too much water that contains sodium ion, it will result in blocking the blood vessels. Therefore we need low sodium ion resin. Low sodium ion resin is a special filter material, so the price relatively more expensive than others.

On the other hand, the price again will be very different if use common active carbon and common cationic resin.

Of course sometimes customer will insist to use 100% common active carbon. It needs to be considered when calculating the cost.

4.Must understand weight of every parts

The most convenient way is to ask supplier to provide the weight of every parts of the pitcher. If there is difficulty to provide, then take a sample and dissemble and weight each part. Once you have the weight of each part, the cost of the component can be converted.

5.The material of every parts

Next, we need to know the materials of pitcher. Different plastic material price can be huge different in every kilogram. Manufacturer normally will choose hydrophilicity, impact resistance, non-toxic and low price material to design their product. Generally it composed from following components:

1. Clear plastic shell：Used for holding filtered water, Material is usually used AS Resin【Polystyrene】
2. Funnel：Used for support the filter and hold the unfiltered water. The material will be ABS【Acrylonitrile】。
3. Filter shell and filter cover：Holder for silver impregnate granular activity carbon and low sodium ion resin water filter material. The material will also be ABS【Acrylonitrile】
4. The lid and spout lid：Used for prevent dust from falling. The material will be ABS【Acrylonitrile】
5. Water stopping washer：Generally use non-toxic silicone material, it used for cover the periphery of filter to prevent leakage.

6.Additional function for pitcher

For caring the users, when manufacturer designing the pitcher usually will add in extra function - filter replacement reminder. In order to prevent moisture normally will choose mechanical reminder.

As to make the product more technical, they will choose to use electronic reminder. The cost is between USD$ 1-2/each.

7.Packaging

And then, is to give the product a beautiful boxing. A colorful cardboard box cost about USD$ 1 – 1.2 /EACH. In order to prevent little cockroach and insects, some of manufacturers will choose to use

shrink film on the outside of the color box.

8.Cost Calculation

The author lists the current prices of plastics, filter materials and some detailed costs as below. You can calculate the cost of a pitcher ​​by the above method, plus the packaging, manual, shrink film, etc.

1. Assembly salary: USD$0.37 - $0.56 /each
2. Outer Packaging: USD$0.19 - $0.30 /each
3. Shrink film packaging: USD$0.11 - $0.15 /each
4. Color box cost: USD$0.60 - $1 /each
5. Instruction manual: USD$0.04 - $0.07 /sheet
6. Non-woven fabric filter: USD$0.07 *2PCS = USD $0.14
7. Logo printing cost: USD$0.37 - $0.56 /each
8. Loss: 1%
9. Price of filter material in July.2021:
   Silver impregnate granular activity carbon：USD$5.56/per kg
   Low sodium ion resin：USD$14 - $15.50 /per kg
   O-ring：USD$0.11 – $0.19/each
10. Price of plastic material in July.2021:
    AS Resin【Polystyrene】：USD $2.60 /per kg
    ABS【Acrylonitrile】：USD $2.89 / per kg

9.Injection salary

This requires a thorough understanding of the mold developed by the manufacturer, the injection molding time, the size of the injection molding machine... etc., in order to accurately calculate the cost.

1.Mold development effects to injection cost

1.1 Modulus in the mold：The more modulus, the more expensive the mold cost. Therefore, relatively fast injection of finished products and the less the cost of the product.

1.2 If the mold was designed for automatically gripped by mechanical arm, the cost of the mold will be more expensive. On the other hand, without labor could lower the cost for injection.

1.3 The mold design use slide and the brand logo can be directly formed on the plastic shell. There is no need for reprocess for printing, save some salary, however the mold will be more expensive.

2.Injection molding cooling time

2.1 We could reduce the plastic material cooling time in the mold and increase the output, if the injection molding machine is with cooling water system.

3.The size of the injection molding machine used

If the mold maker is not expert, the mold designed too large then you will need to use larger injection molding machine. This will spend more in electricity and not as flexible as the smaller injection molding machine.

So all molding design、size of injection molding machine and all those details must be sure to check with factory before ask for quotation.

10.Profit

Manufacturers need a higher profit to keep it operating. Not only need to save some profit for new product development, but also some for expand the product capacity、increase auto machinery

equipment and buy land to expand factory… etc. It is not too much for a factory’s gross profit is at 20-30% because they need to deduct the cost of management expenses. And also, the amount of

purchase will affect the price. The possibility of reducing the price is only if the quantity is more than 10 thousands a batch or the project is very competitive in market.

Author：Rodger Lin July 4. 2021

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Further reading：

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