How To Find Reliable & Cost-Effective Board Games Manufacturing
If you’re in the board games business then you need a reliable and cost-effective board games factory. By far the largest expense you have is the manufacturing cost – generally speaking board game manufacturing costs account for around 25-30% of a company’s revenues. So, if you are looking for ways to make a board games company more profitable it logically makes sense to look at the area where spending is highest i.e. spend on manufacturing wiht a board games factory.
Pricing isn’t everything though, even though it is usually the first concern. If you can’t make your games to meet demand and you lose sales, then your company loses far more than it gains by shaving a couple of points off manufacturing spend.
Nevertheless though, there are several tried and tested ways to reduce manufacturing costs:
- Get quotes from multiple suppliers – this is evidently an effective strategy because so many companies use it. With this approach you quote every new game with a couple of factories in order to ensure you get competitive costing. The drawback with this approach though is that it can be overdone. In the end while there are quite a few board games factories out there, board games manufacturing is a finite capability. So, if you routinely make 3 or 4 factories quote for your products and deliver very little business to any of them you will find that they will lose interest in quoting for you and before long you will have nowhere to manufacture your games. Beware of taking a transactional approach, an effective and sustainable approach to sourcing requires relationship building with suppliers and an appreciation that they are also in business to make money. We would normally suggest board games companies with multiple new products launching each year focus on building two strong factory partnerships. This allows for the benefits of good working relationships, allows for some supply chain diversification and offers two sources for quoting to ensure pricing is competitive.
- Work in partnership with the factory on the product spec – there are normally some features of the product spec which are sacrosanct, but there are others where there is more leeway. One mistake we have observed over time is board games companies and their Sourcing Managers really screwing down a factory on pricing without asking the factory to challenge the spec. We have worked with many of the most respected board game factories in the business, and one opportunity we recommend our clients to take is to ask the factory to proactively challenge the spec and to find cost savings based on process, materials and overall specification. Clearly they would rather take this approach versus making less margin, and often their solutions are better anyway in terms of setup experience or gameplay experience.
- Use factories with established customer base – we would always be wary of an inexperienced factory. Why would you take the risk of working with a factory on their first few projects when they have yet to develop the expertise to ensure consistent quality & delivery standards? Maybe you could work with an inexperienced factory for a significant cost reduction but aside from this we would normally suggest it is prudent to review the existing customer base of a factory. The easiest way to find out who else the factory is supplying would be to ask them, most factories are happy to share the list of companies they supply, you can also check how good they are at protecting the details of their clients projects by probing and asking for more information, if they tell you everything they are doing with no respect for client confidentiality you can expect them to treat your confidential projects with the same approach!
- Review carry forward product pricing on an ongoing basis – when a company sells a product year after year, and where the pricing seems ok and is fairly stable i.e. not increasing all the time, it can be all too easy to leave things be. This though is often where the biggest cost savings can be made, by refining costings and spec on an ongoing basis. One project we worked on was for a long-established board game with some plastic components and plenty of cardboard items. Typically, this type of long-standing multi-component game can offer good opportunities for cost savings as technologies and cost barriers are broken down over time. When we reviewed the company product portfolio and the sales and profit of each product this particular game stood out like a sore thumb due to good levels of recurring sales, but low profitability. By identifying the problem and getting the team at both the company and the factory thinking on how to rework the spec, the manufacturing processes and the materials we were able to deliver cost savings of more than $150,000 while also delivering a far better experience for gamers.
- Work with experienced 3rd parties to get better value and find more cost competitive sources with reliable delivery – in theory nobody wants a middle man, but often in the world of Sourcing middle men can actually save you money. The average board games company we have worked with (based on having worked with, consulted for and sold to more than 200 board game companies) typically has just one Sourcing Manager or sometimes a person with remit for sourcing and other functions. Presuming they are sourcing in the Far East, they may actually visit the factories once per year, sometimes even less than that. They tend to spend far more time on the process of ordering and shipping than they do on actually sourcing. By using 3rd parties you can often find better solutions and cost savings due to added resource, expertise and knowledge.
We run a Consultancy business helping board games companies to grow & be more profitable. We have saved our clients more than $10m on sourcing over the past decade. We work with the most reliable board game factories in the business with strong capabilities and competitive costings. For more information on our services (including Sourcing) please just click here: https://www.boardgamebiz.com/index.php/board-game-business-consultancy-services/
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