How much does it cost to produce a motocross helmet?

Sleapy
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Sleapy
So I'm in the middle of an online entrepreneurship/economics class and have been dealing a lot with price structure and how much it cost to make a product and it got me thinking, how much does it cost to produce a motocross helmet? I tried googling but couldn't find anything about how much they cost to produce, just how much they are to purchase. Thought I would throw this out there and see if anyone had an idea.
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Question 5/14/2020 2:58am
5/14/2020 2:58am Edited Date/Time 5/14/2020 3:01am
About 350.

But more seriously if you are in price structures, let us say if a helmet cost 200 retail:
count a bit like
10 to 30 in VAT & taxes
10 to 15 in logistics (in total, inbound and outbound)
20 to 80 for national distributors, shops and/or online shops
20 to 60 for marketing/branding/communication/teams/riders
+ 5 in R&D
+ 5 in design
+ 15 in facilities
then it depends how you produce it:
if you outsource
or invest in the tooling

So if we are just talking about raw materials, as most products in any field it range from 10 to 20% if you produce youself, which means + machine, you can count often 10% if relatively high volume + 10% in manufacturing labor, or 40% to 50% if you outsource and manage all the sale.

It is cheaper to look for close out deals if you ask me Wink The mx market is too small unless you have a huge concept to differentiate yourself.
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Sleapy
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Sleapy 5/14/2020 3:01am
5/14/2020 3:01am
Question wrote:
About 350. But more seriously if you are in price structures, let us say if a helmet cost 200 retail: count a bit like 10 to...
About 350.

But more seriously if you are in price structures, let us say if a helmet cost 200 retail:
count a bit like
10 to 30 in VAT & taxes
10 to 15 in logistics (in total, inbound and outbound)
20 to 80 for national distributors, shops and/or online shops
20 to 60 for marketing/branding/communication/teams/riders
+ 5 in R&D
+ 5 in design
+ 15 in facilities
then it depends how you produce it:
if you outsource
or invest in the tooling

So if we are just talking about raw materials, as most products in any field it range from 10 to 20% if you produce youself, which means + machine, you can count often 10% if relatively high volume + 10% in manufacturing labor, or 40% to 50% if you outsource and manage all the sale.

It is cheaper to look for close out deals if you ask me Wink The mx market is too small unless you have a huge concept to differentiate yourself.
Ok, thanks. I did read somewhere that the insurance to cover helmets is pretty expensive, which makes sense. Somebody crashes and KOs themselves and gets a get rich quick idea in the form of a lawsuit.
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Question
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Question 5/14/2020 5:53am
5/14/2020 5:53am
Question wrote:
About 350. But more seriously if you are in price structures, let us say if a helmet cost 200 retail: count a bit like 10 to...
About 350.

But more seriously if you are in price structures, let us say if a helmet cost 200 retail:
count a bit like
10 to 30 in VAT & taxes
10 to 15 in logistics (in total, inbound and outbound)
20 to 80 for national distributors, shops and/or online shops
20 to 60 for marketing/branding/communication/teams/riders
+ 5 in R&D
+ 5 in design
+ 15 in facilities
then it depends how you produce it:
if you outsource
or invest in the tooling

So if we are just talking about raw materials, as most products in any field it range from 10 to 20% if you produce youself, which means + machine, you can count often 10% if relatively high volume + 10% in manufacturing labor, or 40% to 50% if you outsource and manage all the sale.

It is cheaper to look for close out deals if you ask me Wink The mx market is too small unless you have a huge concept to differentiate yourself.
Sleapy wrote:
Ok, thanks. I did read somewhere that the insurance to cover helmets is pretty expensive, which makes sense. Somebody crashes and KOs themselves and gets a...
Ok, thanks. I did read somewhere that the insurance to cover helmets is pretty expensive, which makes sense. Somebody crashes and KOs themselves and gets a get rich quick idea in the form of a lawsuit.

Good point too, financial costs (investors/shareholders, banks and insurers) have also their share, 10 to 20%. All the costs paid by companies to their banks are quite amazing compared to what the general public pays. Selling in a different currency is for instance a good way to get screwed 5% (even big companies get that, they are installed in a country and when bringing back the profit they still pay a different currency rate than what it is currently trading). Good luck !
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DE262
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DE262 5/14/2020 12:22pm
5/14/2020 12:22pm Edited Date/Time 5/14/2020 12:22pm
About $200 a piece if they're outsourced from China. Like almost all helmets are.

Don't ask me how I know- I just know.
Cool
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spimx 5/14/2020 3:11pm
5/14/2020 3:11pm
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EngIceDave
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EngIceDave 5/14/2020 4:19pm
5/14/2020 4:19pm
I was told by a manufacturer once that the largest expense is liability insurance.
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Sleapy
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Sleapy 5/14/2020 4:28pm
5/14/2020 4:28pm
EngIceDave wrote:
I was told by a manufacturer once that the largest expense is liability insurance.
Yea, that makes total sense. I can understand that. It's gotta be a risky business producing protective gear for high-impact action sports like motocross.
kkawboy14
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kkawboy14 5/14/2020 6:21pm
5/14/2020 6:21pm Edited Date/Time 5/14/2020 6:21pm
1 helmet, $300,000

1,000,000 of the same helmet $23 each

I would think liability and sponsorships/marketing would determine the overall costs
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Roger@Arroyo 5/14/2020 6:45pm
5/14/2020 6:45pm
I talked to someone that had a reporter do some digging on pretty much that same issue. You can have a helmet made in china, with any label you want on it for about $6 a helmet when dealing in bulk of 100 minimum. So, that's going to be a fairly cheap helmet by US standards, but it would even have a DOT sticker with whatever you wanted as a brand. Of course that's probably a pretty bad example as far as quality. But I'd bet it's under $50 for a fairly high end one.
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DE262
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DE262 5/15/2020 11:21am
5/15/2020 11:21am
Luke_Richards wrote:
JT$ would know. If I were to guess for a $500 helmet, $100-125$?
You are very close.
For straight up production only cost- not tooling, not R&D, nothing else but straight up Chinese production of a single shipped helmet.
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mister2dt
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mister2dt 5/15/2020 11:54am
5/15/2020 11:54am
EngIceDave wrote:
I was told by a manufacturer once that the largest expense is liability insurance.
Around 9-10 years ago there was a change in insurance requirements and that is the reason so many brands stopped producing their own helmets and either dropped them all together, or had them produced for them by another brand. AXO dropped theirs, i still have the email from the president breaking the news they were out of the helmet business due to the requirement of a minimum $25 million liability policy. Just for the liability, still had to have the other required coverages as well. This is why Bell produces so many brands now
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Question 5/15/2020 12:21pm
5/15/2020 12:21pm Edited Date/Time 5/15/2020 12:23pm
EngIceDave wrote:
I was told by a manufacturer once that the largest expense is liability insurance.
mister2dt wrote:
Around 9-10 years ago there was a change in insurance requirements and that is the reason so many brands stopped producing their own helmets and either...
Around 9-10 years ago there was a change in insurance requirements and that is the reason so many brands stopped producing their own helmets and either dropped them all together, or had them produced for them by another brand. AXO dropped theirs, i still have the email from the president breaking the news they were out of the helmet business due to the requirement of a minimum $25 million liability policy. Just for the liability, still had to have the other required coverages as well. This is why Bell produces so many brands now
Maybe they bailed out too quickly. They could have set up a subsidiairy, if it gets smashed, they don't lose the whole company.

Between brackets, I have no clue in the helmet world but I also know that many corporate contracts have unlimited liability. I was in charge to audit and/or negotiate about a thousand contracts, and surprisingly it was far to be the most discussed clauses. From what i know it was also not applied, just a "what if" clause kind of like in case of a major breach.
SupercrossCircuit 5/15/2020 9:53pm
5/15/2020 9:53pm
Landed cost to the US on any of the top tier carbon helmets with advanced safety is just north of a $100 bucks. An injection molded helmet with a top level of finish and safety lands in the US at roughly $24 bucks. Tooling costs on that top tier carbon helmet with multiple shell sizes is going to set you back $300K. Tooling costs on your injection molded helmet is still expensive, but because the volumes are higher your vendor is going to offer you a much lower price . Pretty much divide your retail cost by 5 and you will discover what the manufacturer is paying for the item. The manufacturer - to distributor - to dealer - to consumer - chain is what mandates this pricing structure.
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