What It Really Cost Me to Invent a $30 Toy
A few years ago I invented a plastic toy that makes building Hot Wheels tracks more fun. Occasionally, I get feedback that my TrackJack is too expensive. In fact, the first ever Amazon review I got said it was a clever, useful, and well-made product ... but too expensive — so they gave it 2 stars. The price was $24.99 (currently it's $29.99 and 4.4 ⭐s) Now, you may know that there's not a lot of room between $0 and $25 ... because ... math 😊 Of course I realize that most people are not aware of the costs of bringing a product to market. Some think the inventor pockets the entire selling price. The reality is that we might profit a few dollars per sale if everything goes perfectly well. Here's a list of all the costs to bring my TrackJack from idea to customer. 🟢 PREPARING INVENTORY - Manufacturing (sample, make, assemble) - Packaging (make, ship, assemble) - Barcode Fees - Shipping to Warehouse in USA - Shipping to Warehouse in Canada - Customs Brokerage Fees and Tariffs - Inventory Receiving Fee - Storage Fees (recurring) 🟢 SELLING - Reseller Listing Fee (Amazon, Walmart, Etsy) - Reseller Sales Fee (per order) - Shipping Materials - Order Fulfillment Fee - Shipping to Customer 🟢 BUSINESS OPERATIONS - Refund Risk and Costs - Marketing Costs and Risk - Business Operation Costs - Foreign Exchange Fees - Insurance Costs - Accounting Costs 🟢 INVENTING - Idea & Market Research - 3D Modeling - Prototyping - Testing - Find Manufacturer - Manufacturing Mold (limited lifespan) - Safety Testing - Product Naming - Product Photography - Brand Design (fonts, logos, messaging) - Legal & Trademark - Patent Application - Packaging Sourcing - Packaging Design - Packaging Die 🟢 FOUNDER / INVENTOR - Personal time to manage all of the above - High probability of failure 🟢 PROFIT - If everything goes perfectly well with a product that sells for less than $30, you might make a few dollars per sale. - Then you lose some of that to income taxes.