I noticed that the actual cost of the 'product' is less than 40% of the total project costs. And labour isn't even factored in.
I was just involved in making a small injection molded part. I was surprised how easy and inexpensive it was. For all the hype 3D printing is getting, I think there could be lots more businesses in making injection molding more accessible.
elaborated a bit more here:
I've been out of it for a few years but if you have any questions I should be able to point you in the right direction.
This is because your are in the field. Say you were a person, who has never programmed anything in their life, but has a great idea for an app. Where would you even start? It would seem to me that finding good programmers is as difficult as finding good factories.
> I noticed that the actual cost of the 'product' is less than 40% of the total project costs.
This is why Apple is the largest company in the world, not Foxconn.
Last time I tried to price injection molding it was way too much.
Is there a way for people to easily connect with manufacturers in the USA? My dads shop is really small and hungry vs some shop you could find in a google search with lots of machines (and expensive)
1 @ 2 is my email. Let's talk.
(I find auto-linking lowers click friction for me, personally.)
Also did a plastic clip with a live hinge, and I think a steel tool was under $7,000 and parts under a $1.
Compared to 3D printing, we hit the break even point at around 100 cases.
I was just surprised since the last time I was involved in manufacturing was the 90s and was paying $100,000 for tooling for office telephones.
From what the panelists were saying, the closest thing to 3D printing could be useful for would be to use a high resolution printer to create a few masters from which you could create your moulds instead.
One nit to emphasize the value in basic accounting knowledge for others when going down the manufacturing route: it's $11.37 _gross_ margin (aka gross profit, see http://en.wikipedia.org/wiki/Gross_margin ), not _net_ profit (http://en.wikipedia.org/wiki/Profit_Margin ). While this may sound silly and academic, net confers a sense of finality -- it includes all costs, marketing, discounts to sell remnant inventory, depreciations... everything. Learning this distinction will also introduce you to inventory management, promotion cycles, and all sorts of other crazy business skills to help you get to the next level in building a game business. There are hundreds of years of wisdom built up about manufacturing that all has to funnel through.... accounting...
For example, having >50% net profit is fantastic for manufacturing! Having >50% gross profit is on par for low-scale, specialty products. Jon's 11.37 is a gross profit and on par. Knowing nothing about this specific market, the standard advice in this case is to focus on growing the market rather than reducing costs at this point. (This is a business-model version of the 'don't scale prematurely' mantra you hear in tech considering his price of $20/game doesn't seem insane).
Back-of-the-envelope calculations show the gross revenue for all 333 sets is $6,660. Assuming he's included all costs, this means:
Net Profit: $2,000
Another way to look at this business is he would get a return of $2,000 for $4,660 in capital (since he has 1 production run), or 50% ROI... also not too shabby (if sold at retail price).
And yet another way to look at this is manufacturing the product over 8 hours yields $2000, or $250/hour... better than most. It's unclear how much time he spent on the admin and design tasks, but since this is a labor of love... let's assume it was leisure time and free :) It also means a second production run may get him an economy scale from re-using the design and website assets for even more $$$/hour.
All-in-all, this looks great across the board, and I wish the Jon the best of luck in bringing Space Dice to the world!
One comment though - if the intention is to get the game onto the shelf in retail stores, there's not enough margin in it at the current cost/pricing.
A store is going to require most (or all) of that margin - in most "dice game" type stores, if you want to put a product on the shelf at $20, you're going to need to sell it to the store for somewhere around $14 or they're not going to be interested.
Seems to me that at least an investigation into whether getting a run of 3,000 or 30,000 sets made up (and outsourcing the 80 or 800hrs of packaging work) would be a worthwhile exercise rather than being premature optimisation.
I was shocked (in the newbies do) to find out about the sort of gross margins retailers want. From where we are now, it seems like the only way we could reach that is through economies of scale that we are uncertain would pay off. Chicken meets egg once again?
In the market we're in (musical instruments/audio) the retailers with stores are going away, sales have moved online.
I'm not sure yet but I think the margins for online retailers could be less?
Every single thing in our lives is driven by this dynamic and it is a cancer.
What is the way out of this that keeps people happy and doesn't destroy us?
Would you be willing to pay $10 for a gallon of gas? Probably not. However, if you were open to paying this much the entire gasoline supply chain would not have to worry as much about their costs. It's action-reaction. Supply and demand.
Put a different way: If government somehow mandated tomorrow that on Monday gasoline will be $10 per gallon, gas company CEO's would be able to relax and not have to optimize their cost structure for some time.
Of course, this does not happen. People shop at Walmart and price shop online. In most businesses with decent competition it is actually very hard to make money without extreme attention to cost optimization. Popular liberal lore is that CEOs optimize cost because they are greedy. That is almost indescribably ridiculous. You optimize costs because if you don't, you die.
You should go through the exercise on Excel to see the effects. Pretend to start a business that will sell five items picked at random from Amazon.
The conditions are simple:
- You mortgage your house and invest $200K in this
- You have to compete with Amazon.
- You have to pay yourself a reasonable salary.
- You have to hire some people (you can't do everything).
- You have to pay rent, utilities, marketing costs,
accounting, insurance, taxes, etc.
- You have to grow gross profits 25% per year or more.
- You also have to pay-off your $200K loan in, say,
Now do it in real life and realize it is TEN to ONE-HUNDRED times harder.
Then come to HN and read posts from people who firmly believe business is driven by greed. What would you say to them to have them understand?
Right. Most who have never started and run a business have less than zero clue as to the realities and basic math one must face. They can opine all they want, yet the reality is that they simply don't have a good frame of reference. All they see is the price at the pump. And they always want to pay less.
EDIT: Layout and punctuation. Typed earlier today on an iPad, which is just horrible for entering and editing text. There are times when vim makes so much sense...
Go to a grocery store; Safeway or whole foods. Note the prices for items based on their qty/weight/etc.
Now go to a restaurant wholesale style place (not a costco, which is an illusion of savings).
A place like "cash and carry" (there is one in oakland) where the small scale restaurateurs purchase goods for sale and markup to Joe Consumer.
Look at the price difference and what you, even as a non-wholesale-licensed-individual can purchase.
Now, the price you are paying in a place like cash and carry is still a profitable amount for both cash and carry AND the upstream providers to them (distributors, farmers, whomever) - but the prices are far less than a Safeway...
So, while I think that the statement you made is true, to a point, I think that we need a revolution in what industries gouge and which don't.
Food prices are being designed to kill. (I'd love to go into detail but it just hit midnight and I have a GOT episode to rewatch)
Food is cheap to buy from a cash-and-carry because it's cheap to sell. It's sold straight off the pallet, in an out-of-town warehouse with dirt cheap rent. Average SKU value is much higher, massively reducing labour costs. Shrinkage is tiny, because of the high turnover of perishable goods and the greater security possible in a warehouse store. Cash-and-carry wholesalers still have very tight margins, but they have much lower costs than supermarkets.
Food retail is ruthlessly competitive on price, because there are so few other points of differentiation. The idea that there's a malevolent conspiracy in food pricing is utterly farcical to anyone with even a rudimentary understanding of the food supply chain.
In consumer goods it is not too uncommon to have multiple layers in the distribution channel between you and the ultimate consumer of your product? This is part of the "fingerprint" I spoke about. For example, you might have a representative take 7%, distributor take 35% and retailer 25% off list. So, yes, the manufacturer never sees list price pouring into its bank account.
Financial folks outhouse with lots of business experience are familiar with the supply chain and distribution channel fingerprints across a number of business types. Armed with this data you can certainly do some quick back-of-the-napkin calculations to understand the basics of a proposed venture.
Also if the author wanted he could simply add in some cheap d10s that each player could use to keep track of their current planet values.
Perhaps a graduated stick, like a long cocktail stick/drink stirrer, for each player, you pull the stick across a line (eg from under the box) to indicate the score. Another way would be to have a stack of counters, like tiddlywinks, you could upsell different counter sets then (half marbles, cut stones, metal, different designs). Counters might work for tie-ins - planets of the Starfleet federation, planets named for houses of GoT or such. Or yes d10's as a sibling comment mentions.
Doesn't mean you couldn't have an app too, but then why not simulate the dice, etc., if you're going to need an app to play the game?
Why did the author write a rails app to run statistical experiments on what are easy to calculate probabilities? It seems that if you want to make a probability based game you ought to have at least a working knowledge of the basics.
Or better yet you could write a script to compute exact probabilities!
The real question is why write a rails app? How does a web application framework help you roll dice?
Many games also include an online component. This can easily just be the start of a new product...
Perhaps it's along the same lines as the physical prototype he made prior to that.
"It really helped to make a prototype, as I could actually play the game rather than everything being hypothetical."
Building the app seems like perfectly logical extension of that.
>It seems that if you want to make a probability based game you ought to have at least a working knowledge of the basics.
Yet here he is with a fully finished product in spite of that notion. He wanted to make a game, he made a game using the tools he was aware of and comfortable with.
People have been making games of chance since long before advanced mathematics. Being a statistician doesn't necessarily mean you can design a great game - the opposite holds as well.
Ouch, two errors:
"noone" -> "no one"
"hands, as" -> "hands as"
"The first to player is whoever..."
I think that should say "first to play".
I'd consider a bag.
It's also empowering to know that he did this with ~$5000 USD. I have no doubt that small-scale production like this would have been prohibitively difficult (read: annoying/costly) even five years ago.
> Can I keep a planet if I didn't roll a sun with it?
No - suns make planets habitable (see the Sun section); you can only keep habitable planets and black holes.
>What's the difference between orange and yellow space debris?
There is no difference between red and orange space debris (there are no yellow -- the colors in the instructions are slightly off from what the dice actually show). There's also no difference between yellow and green planets/suns -- take a look at the image in the article that shows all the dice laid out. I think it'll clear that question up.
>but don't I also keep stars so that my planets stay habitable?
That makes logical sense, but since the instructions specifically state to keep only planets and black holes, no, suns go back in the tube. I think the logic behind this is two-fold: One, since planets and black holes are the only metric for score, any planet that you keep has a star in its imaginary galaxy, so a planet that is by a player actually represents not just a planet but also "at least one star." Two, a green/orange die going back into the tube helps keep the game points flowing.
I'm not too surprised at how much the costs ended up turning out to be, but I am curious as to how long it took to assemble everything together, from prototype to finish? I guess the main difference for a physical product is really the time it takes to get from prototype to sellable product, rather than just hacking something out in a weekend and getting it out there immediately.
I did manage to do a test run of 100 custom cellphones there though and it worked out fine. I had a friend who speaks Mandarin actually call the place directly though and didn't deal through Alibaba
I tried to make a wi-fi kettle with a wifi module in that had a API, the prototype alone was a huge expense (£25k+) and to get it into production was around £200k (CE certified etc). In the end I just wrote up the blog post (here http://www.mobileinc.co.uk/2010/03/introducing-the-twettle-p...)
Props to anyone who makes something physical, it's dedication, passion and investment
We didn't spend money on the prototype in the end, we just couldn't get the backing, it would probably be a lot easier these days tho (it was 3/4 years ago)
Congratulations! Can't wait to play!
I'm still really in the planning stages, as I haven't got any experience on this front at all. But I do have some of the digital backbone in place already. And I have my ideas stirring in a pot now. All that's needed is for me to start cooking.
Anyway, I would just like to say that I am inspired by what I'm seeing here. I'll work as hard as I possibly can. Wish me luck!
I think it's safe to assume that very close to 100% of users will have an internet connection available when playing this game, unless they're on a vacation abroad. I would opt for:
1. Full manual + videos on spacedice.com, aimed for use before the first time one plays the game.
2. Abridged version of manual printed on the tube, mainly meant for recalling some specifics of the game.
But hey, it looks awesome. Great Design.
If you come over to the largest game fair in Essen (Germany) this year, I may grab one ;)
Happy to help anyone who needs guidance on sourcing and manufacturing in China. I've become pretty savvy over the years.
To get the real total cost (which must be estimated), we should know how many hours he spent on it, and what his expected hourly rate might be if he were an independent contractor.
You can't really decide whether or not the endeavor was a net gain unless you also take your own time into account.
And besides, if profits are not a motive, why analyze them to begin with?
I'd love to check it out, but I don't think I'd enjoy it very much due to my being color blind. Have you given any thought to designing the images to not be dependent on color?
Can't people do the math anymore, they have to simulate everything?! And they have to do it with a mtf web framework?! A spreadsheet and some pen and paper to figure out the formulas would've sufficed...
Also, arranging distribution with them is very problematic. (Source: I had delusions of running one, once.)
You mention Walmart. The OP has an initial run of 5,000 units. He doesn't have nearly enough to get taken up by Walmart and they'll stiff him on profits.
Toys and games are a vicious market. Getting into Walmart is a mixed blessing.
Speciality shops is a good idea though.
Is this good for kids?
I'll play it later with my kids and see what they think (my opinion rarely counts these days).
But pretty inspiring! Good looking game!