The first time developing a product, engineering looks like the biggest expense but it is not. Engineering and other non-recurring expenses are things you pay for one time and make you money on every unit you sell. Your big expense is going to be your first order. It is a new invention so selling price is constant.
Your first order is 1000 units
- Your $5K developed product cost $20/unit to make + $30K Startup = $55K for 1st 1K of product
- Your $20K developed product cost $10/unit to make + $20K Startup = $50K for 1st 1K of product
(2) saves $5000.
If you get lucky and next order is 10K units
(2) saves $10/unit and $100,000 on your 10K order.
Plan for Success not failure.