Savvy electronic OEM equipment manufacturers never give contract manufacturers a costed bill-of-materials (BOM). How you determine your lowest product landed cost (target price) is determined by obtaining accurate information about your contract manufacturing solutions provider.
This article covers achieving timely new product development (NPD) and product launch pricing (cost) with new and existing EMS and ODM partners and, includes best practices for renegotiating contractual pricing terms for your existing products already being built by your EMS and ODM partners.
Every contract manufacturing program is comprised of three primary components in terms of cost vs price:
- EMS/ODM (actual) cost to service OEM program
- EMS/ODM internal cost (with markups)
- Cost quoted to OEM
But how much higher? And, how can you find out? When contract manufacturers respond to your RFQ with a quote (the price the hope you pay) they break out their costs to justify (they want you to believe) what is fair pricing for your program into a few, basic categories: materials, labor, S,G&A, finance, freight, and overhead.
But this is misleading.
Our manufacturing cost modelers help enterprise teams and corporate individuals to position your company in a manner so you are more informed about EMS/ODM actual costs when you negotiate EMS and ODM pricing and terms in your contract agreements.
SEE ALSO
How to build costing modelers for contract electronic programs
EMS and ODM suppliers want as much money from you in fees, as possible. You want to reduce your annual spend. Somewhere between these two opposing business objectives you sign on the dotted line. You can tip the scale in your favor and we show you where and how.
Get list of EMS manufacturers for your requirements (Its free)
Save time and money. Find quality EMS manufacturers. Fast. Venture Outsource has a massive, global database of contract electronic design and manufacturing capabilities. Speak with a Provider Advisor.
“Was able to very quickly find details on the important elements of setting up EMS and ODM partnerships, talked with an advisor for personalized info on quality providers matching our requirements while getting up to speed quickly about the industry and connect with key staff from like-minded companies and potential partners. Great resource.”
— Jeff Treuhaft, Sr. Vice President, Fusion-IO
Advisors tell you matches we find for your needs, answer your questions and, can share EMS industry knowledge specific to your industries and markets.
