The cost of developing a sunglasses collection

A sunglasses collection needs a budget for the work before production, the products themselves and the cost of getting them ready to sell. A price per frame answers only part of the question.

There is no useful single figure without a specification. The development route, number of styles, materials, lenses, order quantities and packaging all change the calculation. So do the delivery destination and your sales model.

For an established fashion brand or retailer, the practical starting point is a cost structure you can fill with actual quotations. It should show both the cash needed to launch and the economics of selling each pair.

Separate development from repeat production

Start with costs incurred to create and approve the product. Depending on the scope, these can include design development, technical drawings, prototypes and production tooling or set-up.

Ask which charges are non-recurring, which apply to each style and which would return if the specification changed. Establish what the fee includes, who owns any tooling and whether it can be used for subsequent orders.

Treat sampling as a visible budget line. A proposal should explain the samples included, the number of revisions covered and how additional work is charged. Confirm whether sample courier costs are included and whether any charges are credited against production. Do not build a budget around a credit until it is agreed.

Testing, inspection and quality-control work also need an explicit place in the quotation. Ask what is included for your product and intended markets, and what requires a separate allowance.

Build up the cost of a saleable pair

For production, request a complete product specification alongside the price. It should identify the frame material and finish, hardware, lenses, branding and assembly included.

List the supporting components separately: case, cloth, box, inserts and any retail labelling. A packaged pair may have a different cost from the frame shown in an initial quotation.

Check the quantities as well as the prices. Minimums may apply by style, colour or component. If you order more cases than frames, the surplus still uses cash, even if you expect to use it on a later run.

Keep launch costs such as photography, ecommerce content, displays and staff training visible in the overall project budget. They should not disappear simply because the production partner is not supplying them.

Get from factory price to landed cost

For budgeting, landed cost means the cost of getting the goods to your chosen receiving location. Agree that location and what your calculation includes.

Depending on the delivery arrangement, you may need to add freight, insurance, clearance, duties and handling to the product and packaging costs. These depend on the shipment and destination; a quote for one market cannot simply be assumed to cover another.

Ask who arranges each stage and which charges remain yours. Avoid adding freight twice if it is already included. Obtain destination-specific figures from the relevant logistics provider, and have your finance team check the treatment of applicable taxes.

A simple worked budget

The following figures are invented solely to demonstrate the calculation. They are not Emsley prices, market benchmarks or a suggested minimum order.

Imagine a first run of 300 saleable pairs:

• Finished sunglasses: 300 × US$24 = US$7,200
• Case and packaging: 300 × US$4 = US$1,200
• Combined inbound freight, duty and handling allowance: US$1,200
• Total landed inventory cost: US$9,600, or US$32 per pair
• Separate development, tooling and samples: US$2,400
• Total product investment for the first run: US$12,000

Allocating that development spend across all 300 pairs adds US$8 per pair. The first-run product investment is therefore US$40 per pair, before launch and selling costs.

If only 150 pairs sell initially, the remaining stock still ties up cash. You have not recovered the whole project outlay simply because those first sales show a positive margin. Model a slower sales case as well as the planned one.

Test retail and wholesale separately

Use the revenue your business actually receives when checking the economics. A recommended retail price is not the revenue a brand receives on a wholesale sale.

Continuing the invented example, assume US$80 revenue per direct sale, excluding sales taxes, with no discount. Against US$32 landed inventory cost, that leaves US$48 before development and selling expenses: a simplified product gross margin of 60%.

At an assumed US$45 wholesale revenue, the same product leaves US$13, or about 29%, on the same basis. Allocating the US$8 development cost reduces those balances to US$40 and US$5 respectively, before other expenses.

For direct sales, allow for payment fees, fulfilment, customer delivery, returns and customer acquisition. For wholesale, include the commercial costs and terms of that channel. Neither of the margins above is a net profit figure.

Check the cash schedule before committing

A workable total budget can still create pressure if payments fall before sales. Map development fees, sample charges, production deposits, balances and delivery expenses against expected receipts. Use the actual payment terms offered.

Before comparing proposals, ask:

• Is every quote based on the same specification and quantities?
• Which development and sampling charges are separate?
• Are cases, packaging, testing and inspection included?
• Where are the goods delivered, and which costs remain payable?
• What triggers extra charges or a revised price?
• What would a repeat order include and cost?
• When does each payment become due?

Keep an explicit contingency for unresolved items, sized to the uncertainties in your project. Reducing the number of styles or variants may be worth examining before cutting a detail customers will notice.

Emsley brings frame, lens, case, packaging and logistics development into one team. To discuss the scope of a collection, send us a note with your intended range, retail positioning and budget, or explore the development process.