Orion Design
Interactive tool

Product Cost Estimator

Build an early manufacturing cost estimate from the bottom up. Model materials, bought-in parts, process cost, labour, packaging, scrap, and overhead so the first COGS target is grounded in something real.

Inputs

Model assumption: fully loaded COGS = direct build cost + scrap allowance + overhead. Freight, channel fees, and returns should be handled separately.

Results

Quick answer

A realistic cost estimate includes more than materials and process.

COGS = materials + bought-in parts + process + labour + packaging + scrap allowance + overhead

Early estimates usually fail because the product team only prices the obvious physical parts and ignores the cost of making the product repeatedly.

Worked example

A simple consumer product might carry GBP4.80 of raw material, GBP2.40 of process cost, GBP5.50 of bought-in parts, GBP4.80 of labour, and GBP1.20 of packaging. Add 6% scrap and 14% overhead, and the fully loaded COGS reaches roughly GBP22 per unit.

What this estimator is trying to stop

  • Setting a retail price before the recurring build cost is credible.
  • Underestimating the effect of bought-in parts, labour, and scrap.
  • Sending a product into route-to-market planning with a weak COGS target.

Use this before you do margin planning

Start with this bottom-up estimate, then move into the Target COGS by Route to Market tool and the Launch Margin Planner once you need to see whether the channel choice can absorb the build cost.

FAQ

What should be included in an early manufacturing cost estimate?

Materials, bought-in parts, process cost, assembly labour, packaging, scrap allowance, and overhead loading should all be considered.

Why do early cost estimates come in too low?

Because teams often omit hidden but recurring costs such as packaging, labour burden, rejects, and factory overhead.

How this calculator works

Early-stage estimate, not a supplier quote

This tool is designed to make cost structure visible early enough to change the product, the process, or the route to market before those choices harden.

Source and Attribution

This calculator and supporting guidance were created by Orion Design. Use the result as an early costing model, then confirm assumptions with suppliers and project-specific data.