Running a Planner Business: The Truth Behind Production Costs
Running a product-based business isn’t for the faint of heart.
You have to make an investment up front to get your products manufactured before you sell them. And those up-front costs can be a significant chunk of change.
YOU NEED TO SPEND MONEY TO MAKE MONEY
Below, I’m going to break down those costs so that you know what you’re going to be faced with down the road. But first, a huge factor in determining costs is where you decide to manufacture your products—the US or China. I address the pros and cons of manufacturing in both locations in this YouTube video.
Since I specialize in overseas manufacturing, the costs I’ll be working with below are based on manufacturing your product in China.
PRODUCT COSTS
So, how much does it cost to print your planner?
Let’s say you want to create a planner—it will be dated, include monthly & weekly views, and be wire bound.
For 500 planners, the unit cost can be around $15 each.
For 1,000, around $12 each
For 1,500, around $10 each
Your total production run will cost anywhere from $7,500 to $15,000.
And that is just for the planner.
As you can see, the unit cost goes down as the quantity goes up. Why is this?
Well . . . the manufacturers use huge printing presses, and after receiving your files, the press has to be “set up” to print your unique product. This set-up process includes work being done by the Printer techs as they carefully tweak ink gauges, and hundreds of sheets of paper run through the press all in an effort to produce the beautiful colors you’ve chosen for your product. The time spent on this effort, along with the cost of running the machine, and the ink and paper wasted adds up. The more you print, the more the time and cost involved in that initial setup can be averaged out within the total cost.
But . . . don’t get too caught up in the price per unit game! Do you have space for 10,000 planners in your studio apartment? Maybe not.
I’m all about getting that unit cost down, but ordering more is not necessarily the way to do it. For more information on how to design a planner on a budget, check out this post.
sampling
The cost for samples is typically around $350 + FedEx charges. That may seem steep, but truly is a small price to pay for your peace of mind. And consider the alternative: you order 500 planners, and spend $7,500 to $15,000 only to receive a product that does not meet your specifications, whether the cover doesn’t lie flat, the paper feels flimsy, or the colors are not quite right. Dreams = Dashed.
Samples will allow you a sneak preview of your product—the chance to be sure that what has been printed and assembled is the product that you’ve been dreaming about! It’s my favorite part of the production process.
This is your chance to consider the quality, the construction, the colors, the paper. . . . Does this product look and feel how you imagined it would?
Getting samples is a must!
I’ve touched upon the two main factors that will affect the cost of manufacturing your product and the importance of seeing samples, and before I proceed, I encourage you to keep your eyes on the prize! I want you to imagine holding your finished product in your arms . . . I want you to envision the success of turning your dreams into reality . . .
Because now I need to talk tariffs and shipping.
TARIFFS AND SHIPPING
TARIFFS: The Trump administration imposed a 25% import tax on a multitude of products imported into the US from China. Unfortunately, planners were one of those items.
SHIPPING: Since COVID, shipping rates have drastically increased from about 7% to 25% the cost of goods. Prices have come down slightly, but fluctuate just as often as gas prices do, so I still estimate 25% shipping costs to be safe.
How do this apply to your production costs?
Quantity: 500
Unit cost: around $15 each
$15 + $3.75 (25% tariff) + $3.75 (25% shipping) x 500
+ sampling & misc Fedex charges
= around $11,750
Quantity: 1,000
Unit cost: around $12 each
$12 + $3 (25% tariff) + $3 (25% shipping) x 1,000
+ sampling & misc Fedex charges
= around $18,500
Quantity: 1,500
Unit cost: around $10
$10 + $2.50 (25% tariff) + $2.50 (25% shipping) x 1,500
+ sampling & misc Fedex charges
= around $23,000
That adds up quickly, doesn’t it?
Now you know why all the planners you love cost so much money.
I know this may seem like a lot of money, but, using the numbers above — the all-in costs range from about $15–$23 per unit. With the average retail price of a planner being around $60, that’s a pretty good profit! 💰
BONUS TIP: EXPECT TO PAY CASH
How do you go about paying that manufacturer in China?
For small transactions, like ordering samples, you can usually use PayPal — and it’s typical for factories to add a transaction fee to cover their PayPal costs. But for purchases over $500 (give or take), most factories request that you pay cash via a wire transfer from your bank. Half will be due when you submit your purchase order and the other half will be due when the goods ship.
Like I said earlier, you need to spend money to make money.
It’s scary, I know. That’s a lot of money that you’re sending to a company, not to mention a company in China and someone you don’t know.
But I’m here to help. I’ve created a FREE checklist just for you: 3-Steps to Prep Your Business for Overseas Production. Grab this guide at the link directly below.
Feeling ready to move production overseas?
I created a streamlined checklist so you know exactly what you need to do before making the leap to overseas manufacturing . . . and it’s available now at the link below.