LED flashlights and costs of production

Hello.

I wanna talk about costs of production.

I don´t want to turn this in a "Brand vs. Brand" thread, but just know some info about costs of LEDs, anodization, aluminum body construction, electronics, etc, etc.

I mean... really, how much should cost a light?

Let´s take an example: Fenix LD20.

Does anyone have experience in the respective area ?

How should cost it´s aluminum body construction? And the Cree Q5 LED? And the electronics inside? And the anodization?

Plus profits, government taxes, etc, etc...

I mean, what are the real costs of building some of our beloved flashlights?

Someone... ?

:wave:

Well, in the US, machining costs START at about $40 per hour...

Thats a question that is real hard to answer.

When you buy one piece of aluminum tube its $4 a lb. But if you buy 20,000 aluminum tubes it might be as low as $2.75 a lb.

Its that way for everything, If you buy one LED its $20 but if you buy 200 rolls they might cost $8 ea.

So as far as how much does it take to build one, it depends on if you build 50 or 50,000....

You also have to take in to account machinery, power, labor, rent, shipping, R&D, parties for buyers, advertising, bathroom tissue for the mens room, and it goes on and on.

Don't forget that besides COGS (cost of goods sold) plus profit and overhead, there is:

- The engineering cost to develop the product amortized over the number of units sold (which is a guess when determining wholesale/retail price)
- Reliability testing
- Cost of maintaining inventory
- Increase in COGS over time
- Increase in overhead over time
- Warranty issues
- Sales efforts (product literature, sales commissions, etc.)
- Advertising

These are just a few costs that are typically not obvious when determining the true cost of a product. That's why it's so easy to think you are getting ripped off when you know just the COGS, add in all the rest and you can see why products are expensive!

Federal LG said:

I mean, what are the real costs of building some of our beloved flashlights?

Click to expand...

I'm being facetious when I say this, but it sounds like a way to indirectly raise that ever-popular topic of "Why do Surefires cost so much?" :tinfoil:

Seriously, it's a pretty impossible question to answer unless you can look at the books of each company, and even then, there's no way to say that one LD20 costs exactly X to build. A custom builder could give you their material costs, but that would have little relevance to how much it costs Fenix or Maglite or Pelican or Surefire to manufacture their lights and run their company.

I just purchased several aluminum flashlights with Cree XRE, 5-mode electronics (contains a PIC12F608 MCU, I looked), glass lens, aluminum OP reflector, etc., for less than $10 each. Granted this manufacturer does not have particularly high overheads (R&D, warranty, marketing, advertising, etc.) - so my conclusion is that the production cost (COGS) has to be somewhat less than $10 per light.

Quality, Reputation, Market Share, are intangibles which can dramatically affect product pricing. Location of Manufacture, Machining Cost, Electro-Mechanical Assembly are tangible, but can also affect cost substantially. A truly loaded question.

I have a small shop in the U.S. and I don't think I can make more than 100% markup on items like this without losing to more competitive pricing.

You can go crazy trying to estimate, just figure 100 to 150% markup for EU or the Americas. If made in Asia - markup is around 35 to 80% - based on actual manufacturing quotes.

my rough guess to manufacturing price of the fenix:

something in 8 dollar range.

LAbour $40 an hour - WTF ?

People keep quoting ridiculous labor costs .
What factory worker gets $40 an hour = or $320 a day ? $1600 a week ? or $83,200 a year .

Try minimum wage and maybe then some .
The reason so many complain about flashlight quality is because there made by minimum waged unskilled labor .

Even if made in the USA , no way there going to use a Toolmaker to turn out flashlights , the work will be done by semi - unskilled workers using pre set machines like capstan lathes . Even if using a CNC lathe , it will be a semi skilled person , and all they would do is feed the machine fresh tube , and remove machined parts .

NonSenCe said:

my rough guess to manufacturing price of the fenix:

something in 8 dollar range.

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And just about any other light of similar configuration - no matter what the brand. Of course, we are talking about production quantities here.

Design something, buy the tooling to build it, prototype it, then actually produce it... Then come back and answer your own question

mdocod said:

Design something, buy the tooling to build it, prototype it, then actually produce it... Then come back and answer your own question

Click to expand...

oooohhhhh that hurts.
I build many of my own lights because the ones that i want cost WAY to frilling much money, not to mention i have special needs :wave:

when i get done, i have spent about as much as the finished one would have cost, and wasted a few DAYS and hours searching for parts, and testing, and being left with a bundle of stuff that just wont do besides.

i would LOVE to get that $300 light for $50, but i sure dont expect it to happen in my lifetime the real question is why the heck did i spend $300 trying to make it cheaper :thinking: for myself

Don't forget, retailers typically gets them from manufaturers for 20-30% less.

After a flashlight is materialized, then it shouldn't be expensive to make one ... less than $20 to make perhaps.:thinking:

However, it's the design and R&D that eats up a lot of money.

Similarly, a bottle of 100 Tylenol cost roughly $10 or $0.10 each, but the actual manufacturering is only pennies. But you have to factor in R&D, equipment depreciation cost, general overhead, intangible asset (brand name), insurance, retailer's markup, etc.

:thinking:

old4570 said:

LAbour $40 an hour - WTF ?

People keep quoting ridiculous labor costs .
What factory worker gets $40 an hour = or $320 a day ? $1600 a week ? or $83,200 a year .

Try minimum wage and maybe then some .
The reason so many complain about flashlight quality is because there made by minimum waged unskilled labor .

Even if made in the USA , no way there going to use a Toolmaker to turn out flashlights , the work will be done by semi - unskilled workers using pre set machines like capstan lathes . Even if using a CNC lathe , it will be a semi skilled person , and all they would do is feed the machine fresh tube , and remove machined parts .

Click to expand...

$40 per hour is a midpoint. The cheap side is closer to $20 per hour, a specialty machinist is >$200 per hour, plus equipment time.

A machinist is NOT a minimum wage job. It is very skilled labor, requiring a decent amount of education.

mdocod said:

Design something, buy the tooling to build it, prototype it, then actually produce it... Then come back and answer your own question

Click to expand...

Yes... that hurts.

Thanks for the tip. I guess CPF could be closed then, and nobody needs to question anything anymore, cause all of us could do things by ourselves, and could learn about our real experiences, without the need of discussion...



Back to topic: there are lights with aluminum bodies (and knurling) that are pieces of art! I mean, I love my Fenix TK20 body! It´s solid, heavy, outstanding construction...

I know anything about aluminum machining. A TK20 body is really difficult to build ? (I´m talking about the machinery to do it...)

the machine shop here has $60,000 machines, wonder who pays for that. add to that this magical robotics line of constant load machines, and wherever there are machines there are people to be enslaved to them, then they got kids, and i suppose we dont just dispose of these humans when they cant work anymore. and .
WHAT are we supposed to believe that on one side these things are made by the blacksmiths $5 journeyman, and on the other side, they are "production" units , pumped out somehow by the hundreds, by some low skilled high school shop student on a $750 lathe ?
which is it?

old4570 said:

LAbour $40 an hour - WTF ?

Click to expand...

"Machining costs" != "Labor".

Machining costs include labor, the consumables used (tooling, lube, cutting fluid), and the cost of equipment and upkeep over its useful life. Machine time (including labor) can start as low as $30 an hour for some types of screw-machine work (with cheap, semi-indestructable equipment that's automatic enough for one unskilled worker to keep 3 or 4 machines running continuously, and a machinist only needed to set up new jobs or fix problems when something goes wrong, on free-cutting materials like brass and leaded steel), but virtually no flashlight parts could fall into this category. $45 or so would be the lowest you'd get for typical flashlight parts.

just before Fenix stomped the market, one had to do the following:

purchase a cheap housing/host,
purchase led (more expensive than today, but way better choice of bin and tint)
purchase driver (same than now for the good ones, no cheapo offerings available)
purchase optic/reflector (same as with driver)
... all parts together gave a less good looking, WAY less good machined and finished, single stage led light costing MORE than the Fenix offerings.

If Fenix, or one of the other same quality and good priced makers, make profit with their lights, I dont care about how high it is, the lights are cheaper but much better than when I had to build them by myself (+ I save effort)

not sure, but im pretty sure everyone involved in the making and sale of all the chinese lights is making money hand over fist