10 - Tendering for production

Submitted by ehanuise on Sat, 12/10/2013 - 01:50

10 - Tendering for production

Before you place an order for your production run, you should shop around. Contact several manufacturers and ask for quotes so you can compare prices. Do not however fall in the trap of considering price alone in your choice : check the materials used, the processing methods, and ancillary services such as shipping, warehousing, packaging, the payment conditions, etc. Also check out whether the manufacturer is willing to help and guide you in the process or if they expect you to be self-sufficient and to have previous experience.

To get these quotes to match your project and to be able to compare quotes, you first need to put together a quote request document.

The quote request document

Purpose

The quote request document holds all the information your manufacturer will need to accurately price the production of your game.

This document has several purposes. The first is to force you to run through all aspects of your game and make sure each and every component is designed, laid out, accounted for, and technically specified. In fact, to write a proper quote request document, you should have a game that is almost ready to go to print. In some cases, you will prepare a preliminary quote request document and use it to get a rough estimate beforehand and make a short list of possible manufacturers, and later in the process update it to a fully specified quote request and ask the manufacturer for an updated and final quote.

The second purpose is of course to allow the manufacturer to provide an accurate quote for your game.

The third purpose of the document is to act as a check list to make sure the quotes you receive actually match your quote request specification. Producing board games is not a standard process, each game is specific, and the more components your game has, the more chances an error or omission can happen. The manufacturer will double-check your quote request document and his quote, but keep in mind you will be producing several thousand games, so any error will happen that many times. As the saying goes, measure twice, cut once. This also makes the quote request document a communication and reference tool for all parties involved : if your document is complete and includes schematics, measurement, quantities, etc. your manufacturer will cut and paste the relevant bits to his subcontractors as the reference instead of rewriting what they need from that subcontractor and risk errors along the way.

The last purpose of the quote request document is to be the accepted authoritative specification of what needs to be manufactured. Make it clear from the start on with your manufacturer that your quote request document is the reference specification for the game to be produced and that if there is a mismatch between your quote request document, the quote, and/or the final product, the quote request document will be the reference. You need a complete and exact document for that, but most manufacturers will appreciate that way of working, as a detailed specification is a very valuable tool for everyone involved. It also means you will need to keep it updated with any changes agreed upon during the tendering and pre-production process.

When I started as a boardgames publisher, coming from a project management background I was surprised to learn that some established publishers still work with just a bunch of emails and don't have a proper 'quote request specification document' per se. Of course it is time consuming to put together, but the advantages far overweight the costs, IMHO.

The quote request is like the blueprint of a building : you could build it without the blueprint but unless you are a very talented builder and you work alone you really should have one. 

Structure

Your quote request must communicate both the big picture (what you are building) and the minute details (the specification). Also make sure to check out the example actual quote request document at the and of this chapter.

Short description

I usually start with a short description of the game : what the game is about, what the public for the game is, the target age, duration, and some pictures if you already have them.

Then, I state the market (FLGS and chain stores have different requirements, needs and expectations).

This contextual information will help your manufacturer better understand what kind of game you are requesting a quote for. This will allow him to give you relevant advice over some aspects of the production and to spot any 'out of the ordinary' aspects of the game such as unusual box sizes, aspect finishes, materials, case unit count, and so on.

For instance if you state that you're making a family game for 4+ children that will be sold in chain stores and your specification does not include a foil or protective coating on the board and cardboard elements, he should spot it and suggest you do so.

Manufacturers do of course have a commercial interest in their suggestions, and bad counselling and up-selling do sometimes happen, but this the exception rather than the norm as most manufacturers understand that they will see you come back for more units if your game is a success, and that you will eventually leave them for other sources if they play foul. As always, just make sure to ask around, check the quotes with your mentor, and remember this is a small business community where information is gladly shared.

Components summary

The next section lists all components that will make the game. The rulebook, box and shrink wrap are components too! This is a summary list, with the measurements, materials, quantities and colours for each part. Start with the paper and cardboard parts, then all the wooden, plastic, metal and special components.

Components detail

Now for each component comes a detailed specification of that component.

Make sure you have done the layout for all your components and that they match the industry standard requirements; You can look at the excellent layout guide from the Ludofact prepress website for some pointers to these requirements : http://www.prepress.ludofact.de/Dokumente/datasheet_ENG_12-2012.pdf

For rulebooks, state the rulebook size, number of pages (should be a multiple of 4 if it's a stapled booklet), whether it should be stitched or stapled, how many colours to use (usually CMYK on both sides, also known as 4/4. Black and white looks cheap ugly and really isn't worth the price difference), paper weight to use, kind of inks to use (water-based, soy-based, oil-based, …), any finishing  (coating, special techniques to use for the cover such as registered UV coating, …), and whether the covers should be using different weights and finishing. As you can see there's more to a rulebook than just a bunch of paper sheets.

For the box and all cardboard parts (punch boards, player mats, …) the same information as for the rulebook, along with the kind of chipboard you expect, thickness, and a schematic of the punch boards as their complexity will affect the quote (the punch tools are hand made).

For all other components, be as exhaustive and thorough as you can. Feel free to add pictures of similar components from other games (and name the game for reference), as this will help your manufacturer decide whether they can source that part from an external supplier or if they have to make it from scratch for your game.

Whenever possible, make sure you state what alternatives are acceptable, if any. For instance you can specify your game will have wooden cubes of 8mm in 8 colours, but that plastic cubes can be an acceptable alternative. This will help your manufacturer offer you the best price for your game.

Important aspects

Make sure to emphasize the important aspects of this production run. Anything out of the ordinary, as well as key aspects should be highlighted. You want to use plastic stock instead of card stock for your cards ? Need a transparent piece of plastic glued to a hole in your game board ? A specific set of colors for your game pawns ? This should be very visible in your quote request document.

Quantities

This section details the size of your print run. How many copies do you intend to print ? Common print run sizes are 1.000 , 3.000 for a first print run of a new game, and 5.000 and 10.000 for reprints of a very successful game.

The math behind print run size is quite simple actually : the more units you print, the less each unit costs. This is because your manufacturer has big set-up costs when producing a game (printing plates, press setup, die cuts, set up of the assembly line and machines for your production run, time used to source all the components and manage your commercial relationship with them, and so on). These fixed costs are divided by the amount of copies printed, and added to the time and material costs of the production, along with the manufacturer's margin.

So a small game that costs $4/piece for a 1.000 print run might cost $3.5 for 3.000 (3k) units, $3 for 5.000 (5k) and $2.5 for 10.000 (10k) as these fixed costs even out on more copies.

It is perfectly OK to ask your manufacturer to quote a few different print run sizes, like 3K, 5k and 10k units.

However, there is an important aspect to keep in mind here : it makes no sense at all to print 10k units of a game that has no chance to sell more than 3k units.

Even if the per game cost for 3k are $3.5 and for 10k they go down to $2.5, it means a 3k print run totals at $10.500 and a 10k print run totals at $25.000. Do never let the per unit cost blind you from the total cost of your print run, and never ever order a print run you cannot afford.

Also, it is better to go for a small first print run and reprint if it is a hit than to have to deal with unsold inventory eating up your garage, house, and office space.

For a game is reasonably well thought out, that has professional and good looking lay-out (meaning you have shown a mock-up of your final packaging and components it to several retailers and distributors and they told you they can sell that), a first print run of 1k units is conservative enough. If your retailers and distributors are very enthusiastic, you might want to consider 3k. Until you have several produced games and a couple years of experience actually publishing and selling boardgames, do not even consider 5 or 10k. Keep in mind you can always reprint more when these are sold. The lost opportunity of sales because you're sold out and need to reprint is a rich man's problem most of us would love to have.

UPDATE : Frank Jäger from Ludofact kindly provided me with this update :

For a production in Europe, I think your price decrease by volume is not entirely accurate. They may be for China, though, where more manual labour is apparent, but here it is usually like this:  

Let’s take the price for 1000 games as 100%. Now, I have a few quotes here for which I will give you the breakdown:

Quote 1: 1000 games = 100%; 2000 games = 64%; 3000 games = 53%
Quote 2: 1000 games = 100%; 2000 games = 67%; 3000 games = 56%
Quote 3: 1000 games = 100%; 2000 games = 68%; 3000 games = 57%
Quote 4: 1000 games = 100%; 2000 games = 62%; 3000 games = 49%; 5000 games = 38%; 10000 games = 32%
Quote 5: 1000 games = 100%; 2000 games = 61%; 3000 games = 48%; 5000 games = 38%; 10000 games = 30%
Quote 6 (small card game)= 1000 games = 100%; 2000 games = 61%; 3000 games = 49%; 5000 games = 39%; 10000 games = 31%

So your $4 game would cost you, worst case:

2000 games: $2.72
3000 games: $2.28
5000 games: $1.56
10000games: $1.28

It may also be a good idea to mention tooling costs. China likes to include those, so they really make a great cut on reprints. We always quote those separately, so the costs do not appear in reprints. But: tool costs can be substantial, so those should not be overlooked.

 

Over- and under-runs

When you order 3k units of a game to be produced, you will not actually receive 3.000 units. The industry standard is a 10% margin, meaning you can receive anywhere between 2850 and 3150 units (-5% to +5%, a 10% variation.)

Your quote request should specify the variation acceptable to you, and if you have an absolute minimum or maximum that has to be accounted for. For example if your Kickstarter campaign has sold 2900 units, you can specify here that the production run must include at the very minimum 2900 copies.  (Actually I'd specify 3000 as a minimum to account for damaged boxes during transport and any misprints of errors.)

You will be invoiced according to the actual number of units produced, so your invoice will also be -5% to +5% of the quoted amount. Don't budget too tightly of you're in for a bad surprise. (Actually when producing goods, all surprises are bad ones.)

This might be surprising, but in fact it does make sense because of the production process : the first step is printing, and a printing press that can spew out thousands of copies per hour is nothing like an office copier where you specify an exact amount of copies. The printing press driver estimates the time requires for your print run, lets the machine roll for that long with some leeway for start-up and stop, and then counts the number of actual copies printed. These printed sheets will then be glued and mounted on cardboard, die cut, packaged and assembled and at each step some losses will occur. Only at the end of the production run can the manufacturer tell you exactly how many units have been produced. If you demand to have an exact amount, what will happen is that they will print more, discard the excess units, and charge you for the total costs anyway.

Packing and packaging

This section details how the manufacturer should package the finished games before he hands them over to shipment.

The first thing is shrink-wrap. You need it, don't even consider doing without one. Shrink wrap protects your game boxes from stains, dust and scratches, makes it look shiny and pristine on the retailer's shelves, and tells the customer that this box has not been tampered. It also protects the game from humidity during shipping and handling.

Just tell a retailer you are considering producing a game without shrink-wrap and look at his face. Now you know how important shrink-wrap is.

Then comes the bundling and the shipping cartons. Your distributor will sell games to retailers in bundles. Bundle size varies according to the game, its box size and its price. By setting the number of units per case, you pretty much specify the bundle size for retailers. For a small game, 10 or 12 units per bundle can make sense, but for a bigger and more expensive game 5 or 6 units can be a better choice. Make sure you discuss this bundle size with your distributor and with retailers beforehand.

This will be brown cardboard, double or triple walled (meaning two or three layers of flat cardboard with wavy cardboard between each layer).

Tip : you can ask the manufacturer to print information on these boxes. Printing the game name, the batch number, your company logo and contact info on the boxes is a good idea.

In some cases, several of these bundle boxes are put together in a bigger box for transportation. This is a good idea if your produce in China as your shipping cartons will be handled by many workers and moved to a shipping container so extra protection will help you reduce the amount of damaged boxes loss. (yes, you should expect some boxes to get crunched and damaged.) It's also needed if you ship the games in display cases, which will need to be protected during transportation. Again it's a good idea to have these cardboard boxes printed with information. 

Logistic hubs manage hundreds of thousands of cartons stacked on pallets, and they all very much look alike. Lost pallets happen and it can take days or even weeks before they are located. Printing information on the cartons could mitigate this issue.

Side note : Storage

Again, you need to plan this carefully beforehand. First is the size and volume of your print run : If your game is 30Cmx30Cmx7Cm, a carton of 6 games will be about 33x33x45Cm. You will fit 24 of these on a 120x80Cm europallet (for a 180Cm height) for a total of 144 units per pallet. This means 3k units is 21 pallets, something which will not fit in your garage, and will require more than one truck to transport!

You need to arrange for a storage facility before you place your order. And you need to know its location so you can specify the shipping destination in your quote request.

Some manufacturers offer warehousing services, such as Ludopackt in Jettingen, Germany. They are a sister company to Ludofact and only provide logistics and warehousing services. Many publisher also arrange with their distributors for warehousing the games at the distributor's facilities. Some have their own warehouses, other rent warehouse space at logistics providers.

Shipping

Logistics is a complex matter, involving the coordination of your manufacturer, the whole transportation chain between their facilities and your warehouse (factory-truck-boat-truck-warehouse for an asian manufacturer for example), insurance providers (goods get lost, stolen, destroyed in accidents, and you should have insurance and understand how goods insurance works), and customs clearance if you cross borders with the goods. All have very specialized workflows, vocabulary (incoterms such as DAP, CIF, FOB, … are gribberish to the layman but have very important meanings), and expectations.

My view on this is that I'm not a logistics expert and don't want to become one. It's one of these areas where I would rather pay someone specialized to do a good job rather than deal with it myself. My job is to make great games, not to play transport tycoon.

Your quote request should specify your expectations with regard to shipping : will you arrange for a transporter to pick up the finished goods at the factory, or do you expect your manufacturer to provide you a quote that includes shipping to your storage place ?

I usually ask for a quote including shipment to my warehouse, with insurance for the full value of the goods in case it's lost. ('standard' transport insurance will in fact only cover up a small percentage of your goods actual cost. Always specify you need insurance for the actual cost of goods transported.)

Guarantees

Most manufacturers will offer you no guarantees whatsoever on production quality or production schedules. This shouldn't prevent you from requiring them however. If there is a production problem that is clearly on the manufacturer's fault they will usually correct it at their cost. A complete and detailed specification document should help a lot in determining on which side the error occurred, you or the manufacturer's. If your manufacturer does not hold up to his mistakes, never work with them again and let other publishers know about the incident.

I have been lucky to have no major production errors in my games so far. I had some minor errors with some games, which were always corrected by the manufacturer. In one instance plastic tokens of the wrong color were used in producing a game. This was a minor problem that did not affect gameplay, and it was only detected after the games shipped, so we agreed with the manufacturer that they'd provide us a batch of components with the specified colors and we made them available on request to our customers through our distributors and retailers. My specification document was very clear on this requirement, so the manufacturer immediately agreed to bear the responsibility for that mistake.

On another instance with another game and manufacturer, a printing mistake was detected on some of the die-cut flats before the games left the factory. The manufacturer reprinted these and replaced them in all of the boxes, at their cost.

The best way to mitigate mistakes however is to carefully plan and provide detailed specifications. Also make sure to ask for Quality Assurance (QA) checks at the factory, as errors are infinitely more complex and costly to address once the games have shipped.

I now usually request to see pictures of the produced games or to have a skype video-chat session where they unbox one of the produced games before they get shipped. It's easy to set up, fast to do, allows real-time communication, and helps you spot any issues before the goods leave the factory.

You will need to test your games against toys and games regulations in US or Europe, so you should specify to the manufacturer that you will need to have the games tested and fully expect them to provide goods that are compliant to these regulations. They might be able to offer you testing services along with production.

So far I had no luck in getting a written commitment from any manufacturer to be held liable for production errors, delays, or non compliance with US or EU regulations. Any tips from more experienced publishers are welcome! This was a surprise as in other industries you can negociate liability agreements, and contractually set up fines for late production, production errors, etc.

Annexes

I usually place an annex at the end of the document with all schematics for the punch boards, bespoke components, and board or play mats die cuts. You will provide accurate to-scale documents with all the details about the die cuts when you place your order, but at this stage you only need low resolution pictures, to scale with some measurements, of the die cut patterns and of the components.

The manufacturer will use these pictures to gauge the complexity of your die cuts and components as well as the required materials and provide an accurate quote. (Die cut tools especially can vary a lot in complexity and handiwork required. A sheet of round tokens is easy to make, but a sheet of bespoke silhouette counters can be orders of magnitude more complex to make.)

Asking for quotes

This wraps up the quote request document. Once you have submitted that document to several manufacturers, and received their quotes in return you will be able to place your order. Always let manufacturers know you are requesting quotes from several suppliers.

Expect a 1-4 weeks delay to get your quote, according to the complexity of your components and the time of the year you make your request. The few months before the major conventions (Gencon and Origins in the US, Essen and Nuremberg in Europe) are very busy at manufacturers so they need more time to process requests at these times.

Most quotes will give you a price per thousand items. This means if you produce 3k or 5k units, you have to multiply that price by 3 or 5 to know the total amount. Always make sure you check out the offer structure before you compare them, the numbers can sometimes be deceptively presented.

Something not covered in the specification document, which is technical in nature, is the commercial aspect. Expect to pay a large portion of the print run at order time, and the rest when the goods are produced, before they leave the factory. As your company grows and your commercial relationship with the manufacturer strengthens, you will be able to negotiate better terms.

Placing your order 

When placing your order, make sure to include a copy of your quote request document, updated and renamed 'detailed production specification document', and state in the order that this document will be the authoritative reference you and the manufacturers should use for all aspects of the production. This will save you a lot of trouble and should be appreciated by your manufacturer as well.

Feel free to request pictures of the various steps of the production process as the project advances. It allows you to spot errors early, and provides a valuable communication tool to keep your customers engaged with the forthcoming games. This is especially important with crowdfunded projects as you must provide frequent updates to your backers once the project has succeeded.

Production schedule

The manufacturer should also give you a tentative production schedule, it usually takes 6-8 weeks between the moment your files are transferred to the printer and the moment the games leave the factory. Do not forget that after production your games will need to be shipped and cleared through customs , which can add another 6-8 weeks to the schedule.

Example quote request document

You can download here a slightly redacted example of an actual quote request document : quote_request_redacted_rith.pdf

I submitted to several manufacturers for a reprint of Rumble in the House. This should illustrate all of the above topics with a complete example.