“Can We Make It Cheaper?”

“Can We Make It Cheaper?”

If you’ve ever developed a product — or run a product business — you’ve asked this question.

It sounds simple. It never is.

Because it’s not really a question about cost. It’s a question about change. What are you willing to change — and does the product still work when you change it?

Let me walk you through what that looks like.

The mug

A ceramic mug. Stoneware, hand-dipped glaze, branded gift box. The kind of product you would find in a museum gift shop or a lifestyle store — a premium product, a step above the high street, not quite luxury.

Retail price: £18

Unit cost: £7.80

Margin after everything: roughly £1.40

That’s thin. Not unworkable, but thin enough that someone — a buyer, a founder, a sales team — will look at the cost sheet and ask: Can we make it cheaper?

The answer is yes. Of course it is. It’s almost always yes.

The useful question is: how — and what changes as a result?

So let’s break this mug apart.

Where the cost actually lives

A unit cost looks like a single number. It isn’t.

It’s a sum of decisions — and each one has a different level of flexibility.

The clay body and firing: £2.10. Stoneware fired at 1220°C. Dense, heavy, durable. The weight is part of the product’s appeal. Switching to earthenware would save roughly £0.60 per unit, but the body would be lighter, more porous, and less durable. It would chip more easily. It would feel different.

The glaze: £1.80. Hand-dipped, which creates the slight variation that gives each mug a handmade character. A machine-sprayed glaze would save around £0.70 per unit and produce a more consistent finish — but consistent is exactly what this product isn’t trying to be. The irregularity and handmade finish is the point.

Labour and handling: £1.40. The hand-dipping, the quality inspection, the individual wrapping before packing. Automating parts of this process could save £0.40–£0.60, depending on the factory’s setup.

The gift box: £1.50. Custom-printed rigid board, tissue paper, and branded sticker. This is where it gets interesting — because the box costs nearly as much as the glaze. A simple kraft box with a printed sleeve would cost £0.50. That’s a £1.00 saving per unit without touching the mug itself.

Shipping to warehouse: £1.00. Ceramic is heavy and fragile. Each mug needs individual protection inside the carton. Lighter products ship cheaper. This cost is largely fixed unless you change the product’s weight or dimensions.

Now the question becomes more interesting — because you can see where the trade-offs actually sit.

Four ways to answer the question

Here’s where cost decisions stop being about numbers and start being about strategy. The same mug, the same cost sheet — but the answer to “can we make it cheaper?” depends entirely on what the product is supposed to do.

1. The margin doesn’t work

The product is right. The development was spot on. But at £1.40 margin per unit, it doesn’t make commercial sense at the current volume. Something has to move.

The packaging is the obvious first lever — £1.00 saving by switching from rigid gift box to kraft box. That alone nearly doubles the margin. The mug doesn’t change. The unboxing experience does.

But if this mug is sold as a gift — and the box is part of the buying decision — then the packaging isn’t decoration. It’s part of the product. A kraft box might work for a mug someone buys for their own kitchen. It might not work for a mug someone buys as a gift.

The cost saving is straightforward. Whether it’s the right saving depends on how the product is sold and who’s buying it.

2. The price needs to come down

The retail buyer wants it at £14.99 instead of £18. For the margin to work at that price, the unit cost needs to drop from £7.80 to roughly £5.50. That’s a £2.30 reduction — which means the mug itself has to change, not just the packaging.

Switch from stoneware to earthenware: saves £0.60. Switch from hand-dipped to machine-sprayed glaze: saves £0.70. Simplify the packaging: saves £1.00. Total saving: £2.30.

The mug is now lighter, more uniform, and arrives in a simpler box. It’s still a ceramic mug. It’s still functional. But it’s a different product — the hand-finished character that justified the £18 price point is gone, and the £14.99 price point needs to work for a product that now competes with a high street mug half its price.

That’s not necessarily wrong. But it’s a different commercial proposition. And the decision to pursue it should be conscious — not something that happens bit by bit because nobody stepped back to look at what all those small changes did to the product..

3. It doesn’t feel worth the price

The product is solid. The cost structure makes sense. But someone picks it up and it doesn’t feel like an £18 mug. Maybe the glaze colour reads cheaper in person than it looked in the sample. Maybe the weight isn’t quite there. Maybe the box feels generic despite the custom print.

This is a perceived value problem, not a cost problem. The answer might not be to make the mug cheaper — it might be to make it feel more expensive. A heavier base. A glaze with more depth. A custom embossed gift box with a magnectic closure . Small specification changes that shift the product’s feel without fundamentally changing its cost structure.

Sometimes “can we make it cheaper?” is actually “can we make it better at the same price?” — and those are very different briefs.

4. There’s a cheaper version on the market

A competitor sells a similar-looking mug for £12. The assumption is: we should be able to match that price.

Maybe. But the competitor’s mug might be earthenware, not stoneware. Machine-finished, not hand-dipped. Shipped in a polybag, not a gift box. Made in a factory running three times your volume.

If your product is specified to a higher standard, it will cost more. That’s a positioning decision, not a cost problem. The useful response is to map the differences — here’s what our product includes that theirs doesn’t, here’s what we’d need to change to close the gap, here’s what that does to the product. Then let the business decide whether they’re competing on price or on quality — because trying to do both usually means you do neither well.

The levers most people don’t consider

Changing the product itself is the obvious route to a lower cost — but it’s not the only one. Before you touch a single detail in the product, there are structural decisions worth revisiting.

Volume and shared components. The gift box costs £1.50 for 500 units. At 2,000 units, it might cost £0.80. That’s not because the box is different — it’s because the setup cost is spread across more units. If you’re producing multiple products that could share the same box format, tissue paper, or sticker, consolidating those components into a single larger order can reduce costs across your whole range without changing anything about the product inside.

Packaging as a choice. Does every mug need a gift box? You might offer the mug fully gift-boxed at £18, or in simple packaging at £15. The product is identical. The customer chooses whether they’re paying for the unboxing gift experience. The margin on the non-gift version improves significantly, and you’re not making a blanket cost decision that affects every unit.

Supplier conversations with context. Going back to a factory and saying “can you do it cheaper?” without context is unlikely to get you anywhere useful. Going back saying “Here’s the breakdown. Here’s the target. What would need to change?” That gets a useful answer. They might suggest a different application method. They might offer a price break at a higher quantity. They might tell you it’s not possible without changing a specific design detail — which is useful information too.

These aren’t dramatic changes. They’re the kind of decisions that improve a cost sheet by £0.50–£1.50 per unit without altering what the customer actually holds in their hand.

The practical takeaway

“Can we make it cheaper?” is a valid question.

But it’s only useful if it’s answered properly.

Start with the cost sheet. Identify three key components. For each one, map:

• what you can change.

• what it saves

• what changes beyond the cost

Because a product is never just its cost.

It’s a set of decisions — materials, finish, packaging, positioning and margin— all working together.

And the real question isn’t whether it can be cheaper.

It’s which of those decisions are you willing to change — and what happens to the product when you do?