What does it cost to make a bike helmet?
Summary: We discuss the factors affecting helmet costs and offer a guess at the cost of manufacturing a bicycle
helmet.
This is a best guess page! The estimates below are guesses. We don't make helmets, and no manufacturer has ever shared
their proprietary cost information with us.
We will follow the steps to see what producing an ordinary helmet might cost--not Lance Armstrong's Giro, but a cheap
discount store helmet.
For starters, you need a design. That's probably a substantial part of the cost, since it involves a design staff or
consultants, other development costs including prototypes, lab testing, some market research, use of focus groups,
tooling for the design etc. That's a fixed cost that is spread over the number of helmets of that design to be
manufactured. Assuming you can sell 250,000 of a design, that might be 50 cents. But if you knock off somebody else's
design, perhaps much less.
Materials would be a tiny fraction: some EPS bead for the liner, a small sheet of PET plastic for the shell, tape or glue
to attach the shell, some plastic fittings for the straps including the buckle. Then there is the strap material, perhaps
nylon or polypro. The total of all that is maybe in the range of 40 cents. Add another 25 cents for internal pads or
somewhat more for a ring fit system.
But you need machinery, or you need to have a company do all that for you and all the assembly work. Probably another 30
cents there, doing it in China.
You need a box and packaging, including tags and stickers and a manual and lots of lawyer-proof warnings, maybe another
40 cents.
Then you need to ship the helmet from China to the market where it will be sold. That involves shipping a lot of air
along with the helmets, and it gets expensive. Call that 50 cents, maybe more.
Then here in the US you have mandatory quality control program costs and third party lab certification costs. For 250,000
helmets that might add 20 cents per helmet.
On the back end you have marketing costs: advertising, distribution costs, sales people to call on bike stores or big box
store buyers, a booth at Interbike. If you don't have your own sales apparatus you pay a middleman markup to a
distributor who does. That might add 30 to 40 cents per helmet, but again we are just guessing.
So that's about $2.85. Then you have to estimate how much in miscellaneous business overhead costs to assign to that
helmet. You have to buy legal insurance, run a headquarters office staff, website, all that other stuff. That adds
probably another dollar. Allow for some spoilage, returns, etc, another 25 cents. You're up to $4.10.
You have to ship the helmets to Wal-Mart or the Bike store. Another 25 cents.
Now your shareholders expect you to make a profit. Every year, even if sales drop. So add in, say, another 50 cents per
helmet. Now you are up to $4.85.
The cheapest helmets in Wal-Mart or Target stores sell for $10. That's about the markup you would expect. Bike dealers
normally have to double the cost of their products to get to the retail price, a markup required to cover their fitting
help, their overhead costs and the small profit a bike dealer can make.
Note that the cheapest
bulk purchase helmets for helmet promotion campaigns can be as little
as $3. That is the rock bottom price we have heard of for a 1,000 helmet purchase during 2008. That would indicate that
our $4.85 estimate is way too high for that particular helmet.
And that is about as close as we can come for a very basic helmet. If you add things like rear stabilizers, better strap
fittings that don't slip, reflective trim, sexy graphics or visors, the cost goes up. Those sell at Wal-Mart for about
$25, indicating that the store gets a bigger markup when you get out of the basic helmets. If you want to mold the EPS in
the shell to allow opening up larger vents, the shell has to be more expensive polycarbonate, since PET will melt in the
mold, and those retail for $25 to $35 and up. If you have to add internal reinforcing in the foam to open up extreme
vents, that adds a lot more in design, testing and manufacturing costs. Then there is the advertising, promotional fees
to athletes, and all the premium extras that make it appear worth paying up to twenty times more for equal or perhaps
even less impact protection.
Again, the above numbers are only guesses.