{"id":14893,"date":"2026-07-02T16:51:38","date_gmt":"2026-07-02T14:51:38","guid":{"rendered":"https:\/\/boldfactory.it\/?p=14893"},"modified":"2026-07-02T17:04:01","modified_gmt":"2026-07-02T15:04:01","slug":"launch-economics-are-not-manufacturing-economics-because-they-focus-on-different-stages-and-aspects-of-a-products-lifecycle-launch-economics-are-concerned-with-the-costs-and-revenues-associated","status":"publish","type":"post","link":"https:\/\/boldfactory.it\/en\/why-launch-economics-are-not-manufacturing-economics\/","title":{"rendered":"Why are the financial rules of a launch very different from those of industrial production"},"content":{"rendered":"

The comparison with an Indian client explains one of the most common mistakes in launching a perfume brand.<\/b><\/span><\/h2>\n

A few days ago, we received an email from a potential client from India. They weren't asking for a discount.
\nHe was showing us the financial model with which he builds his projects.<\/p>\n

With great transparency, he explained to us that, for a fragrance sold at 90 dollars<\/b><\/span>, its economic structure is as follows:<\/p>\n

    \n
  • Retailer margin 30%<\/b><\/span><\/li>\n
  • Distributor margin: 10%<\/b><\/span><\/li>\n
  • GST (Indian VAT): 18%<\/b><\/span><\/li>\n<\/ul>\n

    At the end of the supply chain, the company is left with approximately 42% (Retail Price)<\/b><\/span>.<\/p>\n

    In other words, Retail Price:<\/b> 90 $<\/span><\/p>\n

    Company Landing Price<\/b> 37,80 $<\/span><\/p>\n

    Of these $37.80, their model projects allocating approximately 10%<\/b><\/span> at the production cost.<\/p>\n

    The objective was therefore a $4 FOB<\/b><\/span>, which, once transport, insurance, and duties were added, would become a cost of approximately 6 dollars<\/b><\/span> upon arrival in India.<\/p>\n

    From their point of view, the reasoning was perfectly logical. But it was built on one assumption: that the economics of a startup should be the same as that of an established industrial production. And this is precisely where the misunderstanding arises.<\/p>\n

    The error that we see most often<\/b><\/span><\/h2>\n

    Many entrepreneurs build the business plan for their first launch as if the brand had already entered the industrial maturity phase. The reasoning is simple:<\/p>\n

    Selling price, Gross margin, Production cost, Company profit<\/p>\n

    This model works. But it works when the business already exists. Not when you are building it.<\/p>\n

    The first production not only buys products<\/b><\/span><\/h2>\n

    When a brand produces its first batch, it's not simply buying bottles and perfume.<\/p>\n

    It is financing the construction of the entire industrial infrastructure of the project.<\/p>\n

    This includes:<\/p>\n

      \n
    • fragrance development;<\/li>\n
    • packaging design;<\/li>\n
    • supplier search and qualification;<\/li>\n
    • samples and prototypes;<\/li>\n
    • Stability and compatibility testing;<\/li>\n
    • regulatory compliance;<\/li>\n
    • Product industrialization;<\/li>\n
    • Optimization of production processes;<\/li>\n
    • qualitative validation;<\/li>\n
    • Supply chain construction.<\/li>\n<\/ul>\n

      These are activities that will continue to generate value for years. Yet they are often considered mere production costs. This is what completely alters the economic reading of the project.<\/p>\n

      Investment and industrial cost are not the same thing.<\/b><\/span><\/h2>\n

      During the discussion with the client, we shared a reflection that we consider fundamental. There are two completely different economic categories.<\/p>\n

      The first is the\u2019launch investment<\/b><\/span>. <\/span>The second is the Recurring industrial cost<\/b><\/span>.<\/span><\/p>\n

      The first is for building the business. The second is for making it work.<\/p>\n

      Confusing these two components inevitably leads to setting unattainable cost objectives, especially when you want to develop a completely customized product made in Italy.<\/p>\n

      Industrial economics comes after<\/b><\/span><\/h2>\n

      Let's imagine two scenarios.<\/p>\n

      Phase 1<\/b><\/span><\/h3>\n

      Brand launch: 5-10,000 pieces.<\/p>\n

      Custom packaging, Bespoke fragrance, New suppliers, New processes, High development effort, Low production efficiency.<\/p>\n

      It's absolutely normal.<\/p>\n

      Phase 2<\/b><\/span><\/h3>\n

      Industrial production: 100,000 pieces.<\/p>\n

      Consolidated suppliers, Optimized supply chain, More efficient purchasing, Validated processes, Economies of scale.<\/p>\n

      At this point, the unit cost naturally decreases because the initial investments have already been absorbed. This is where the financial model truly begins to take the form every entrepreneur desires.<\/p>\n

      Why didn't we negotiate the price<\/b><\/span><\/h2>\n

      Our response was not: \u201cWe cannot reach that cost.\u201d<\/i><\/p>\n

      And not even: \u201cThis is our best price.\u201d<\/i><\/p>\n

      We proposed something different. A working session. The goal was not to discuss a price list.<\/p>\n

      The correct financial model for this project phase has been built together.<\/p>\n

      During the call we worked on four aspects:<\/p>\n

        \n
      • distinguish initial investments from recurring industrial costs;<\/li>\n
      • develop an economic model consistent with a launch plan;<\/li>\n
      • Define the industrial roadmap needed to achieve medium-term cost targets;<\/li>\n
      • Identify the production volumes that will allow full exploitation of economies of scale.<\/li>\n<\/ul>\n

        Because creating a fragrance is only part of the job.<\/p>\n

        This is where you see the difference between a manufacturer and a platform.<\/b><\/span><\/h2>\n

        A manufacturer receives a specification and returns a quote. An industrial platform starts much earlier.<\/p>\n

        Help the customer answer questions like:<\/p>\n

          \n
        • Is the economic model sustainable?<\/li>\n
        • Which part of the costs represents an investment and which part represents a recurring cost?<\/li>\n
        • When will the real economies of scale begin?<\/li>\n
        • What sales volumes will ensure the business's long-term sustainability?<\/li>\n
        • How to design the brand's industrial path and not just its first order?<\/li>\n<\/ul>\n

          These questions are not about production. They are about project success.<\/p>\n

          Is this the value of a platform<\/b><\/span><\/h2>\n

          At BOLD, we don't believe that our job is simply to make perfumes.<\/p>\n

          We believe our task is to design the industrial, economic, and operational architecture that will allow a brand to grow over the years. Because the success of a launch rarely stems from the lowest production cost.<\/p>\n

          It is almost always born from a well-built economic model from day one.<\/p>\n

          And that's exactly the meaning of End-to-End Manufacturing Platform<\/b><\/span>.<\/p>","protected":false},"excerpt":{"rendered":"

          Il confronto con un cliente indiano ci spiega uno degli errori pi\u00f9 comuni nel lancio di un brand di profumeria. Qualche giorno fa abbiamo ricevuto una mail da un potenziale cliente indiano. Non ci stava chiedendo uno sconto. Ci stava mostrando il modello finanziario con cui costruisce i propri progetti. Con grande trasparenza ci ha […]<\/p>\n","protected":false},"author":1,"featured_media":14896,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[],"class_list":["post-14893","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articoli"],"yoast_head":"\nBOLD: Articoli | Perch\u00e9 le regole finanziarie di un lancio sono molto diverse da quelle della produzione industriale<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/boldfactory.it\/en\/launch-economics-are-not-manufacturing-economics-because-they-focus-on-different-stages-and-aspects-of-a-products-lifecycle-launch-economics-are-concerned-with-the-costs-and-revenues-associated\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"BOLD: Articoli | Perch\u00e9 le regole finanziarie di un lancio sono molto diverse da quelle della produzione industriale\" \/>\n<meta property=\"og:description\" content=\"Il confronto con un cliente indiano ci spiega uno degli errori pi\u00f9 comuni nel lancio di un brand di profumeria. 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Qualche giorno fa abbiamo ricevuto una mail da un potenziale cliente indiano. Non ci stava chiedendo uno sconto. Ci stava mostrando il modello finanziario con cui costruisce i propri progetti. Con grande trasparenza ci ha […]","og_url":"https:\/\/boldfactory.it\/en\/launch-economics-are-not-manufacturing-economics-because-they-focus-on-different-stages-and-aspects-of-a-products-lifecycle-launch-economics-are-concerned-with-the-costs-and-revenues-associated\/","og_site_name":"BOLD Factory","article_published_time":"2026-07-02T14:51:38+00:00","article_modified_time":"2026-07-02T15:04:01+00:00","og_image":[{"width":1440,"height":743,"url":"https:\/\/boldfactory.it\/wp-content\/uploads\/2026\/07\/born-to-stand-out.webp","type":"image\/jpeg"}],"author":"BFactory","twitter_card":"summary_large_image","twitter_image":"https:\/\/boldfactory.it\/wp-content\/uploads\/2026\/07\/bold-why-launch-economics-are-not-manufacturing-economics-open-graph.webp?last_updated=1783003909","twitter_misc":{"Written by":"BFactory","Est. reading time":"5 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