Colorwheel Toys

Sourcing from China

Posted on: February 21, 2012

In order to determine pricing for the wider product range, we can start with our first product, the car kit.

We assume we will have 5 different products, distributed among 5 different difficulty levels. For the purposes of this analysis, we assign the car kit to the base price.  As we decide relative complexity of the other products in the line, we can adjust the sourcing cost to reflect additional (or fewer) parts.

Approach 1:

Buy prepackaged car kits directly from China, and pay extra for customization.

Listed prices:

I also corresponded directly with suppliers in China, and got similar pricing:

Approach 2:

Source most of the components off the shelf from China, have a supplier there combine them into a kit. Option to custom design some parts. There will be additional costs for assembling kits together, as well as additional minor components that have been changing with each design iteration. Costs of decorations are also not included.

Important components:

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