Manufacturing
What a bill of materials records, how it changes during development, and why prototype component prices do not establish production costs.
The quick take
A bill of materials, or BOM, supports purchasing, assembly, and consistent manufacturing. It changes as prototypes are tested and components are added, replaced, or removed.
At AVA Labs, founders can access project BOMs in real time through the client portal and follow changes throughout development.
One AVA Labs project
During prototyping
About $400
Sourced for production
About $20
A twentyfold difference in this example. The difference varies by component; this is not a universal production discount. Using prototype prices to judge production feasibility can lead to unnecessary design changes or abandoning the project.
AVA Labs frequently uses McMaster-Carr and DigiKey for individual components, technical specifications, and downloadable CAD models for many components. Accurate models help engineers check physical fit and integrate parts into assemblies.
Production pricing
A prototype BOM is not a reliable estimate of mass-production cost. Establish production pricing using the actual manufacturing methods, expected quantities, and supplier quotations. The BOM also doesn’t capture every manufacturing expense:
A bill of materials, commonly called a BOM, is a detailed list of the components needed to build a product.
For example, a handheld electronic device might contain a circuit board, battery, switches, connectors, screws, and a plastic enclosure.
The BOM identifies these components, their quantities, part numbers, specifications, suppliers, and costs.
This information is essential for purchasing, assembly, and ensuring that products are manufactured consistently.
BOMs also change throughout development. As prototypes are tested and refined, components are added, replaced, or removed.
At AVA Labs, founders can access their project BOMs in real time through our client portal, allowing them to follow these changes throughout development.
During prototyping, AVA Labs frequently purchases components from suppliers like McMaster-Carr and DigiKey.
These suppliers are valuable not just because we can purchase individual components quickly, but because they provide detailed technical specifications and, for many components, downloadable CAD models.
This is critical to the engineering process. Having accurate CAD models allows us to design around the actual physical dimensions of components, verify fit, and integrate them into larger assemblies.
However, there’s an important trap founders need to avoid.
These components can be dramatically more expensive than their mass-manufactured equivalents.
Depending on the component, prototype sourcing can cost tens of times more than production sourcing, and occasionally even hundreds of times more.
For example, on one AVA Labs project, a component costing approximately $400 during prototyping was later sourced for around $20 for production.
That’s a twentyfold difference.
A founder using that original $400 price to estimate production costs might conclude that the product is too expensive to manufacture, potentially leading to unnecessary design changes or even abandoning the project.
This is why a prototype BOM should never be treated as a reliable estimate of mass-production costs.
Production pricing needs to be established using actual manufacturing methods, expected quantities, and supplier quotations.
And even then, the BOM doesn’t include every manufacturing expense, such as tooling, assembly, inspection, and shipping.
A BOM tells you what goes into your product. But the prices you pay for prototype components do not necessarily reflect what your finished product will cost to manufacture.