If you’re new to the robotics industry, it may surprise you to learn that many robotics companies do not build their robots. We build many robots, chassis, and other components that are white-labeled for other robotics companies to sell under their brand. Some robotics companies focus purely on the software aspect of robots, particularly autonomous robots. Other companies specialize in robot design because that is their team’s expertise, the company’s goals, or because the cost to build robotics hardware internally is costly. (We’ll dive into this aspect more in a bit.)
We’ve helped many robotics companies to figure out their ROI of either building out their manufacturing capabilities or outsourcing various aspects of their production to us. We’ve also done internal exercises comparing the feasibility of expanding our current facility or setting up other facilities that would focus on specific product lines.
Determining Factors in Building Robots Yourself or Outsource Production
Ultimately, the decision to produce a robot comes down to price, control, and speed. This blog post will focus on cost because that is the driving metric of most business cases and the aspect with the most data.
In practical terms, your price per part will be less expensive if you make it yourself compared to outsourcing it, but you must consider what it will cost you to have the facility, tools, and people to achieve that cheaper price per piece.
What It Takes to Build Robots Yourself
Before you build anything, you need a place to work. While a lot of well-known tech companies got their start in a garage, we’re looking at that next step. You’ll need a minimum of 3,000 to 5,000 square feet of light industrial space with a receiving area for crates. (Bonus if it has a loading dock.) Keep in mind you can’t put large pieces of equipment up against each other! You need space around each one of them to maneuver raw materials.
This space needs to be divided into separate spaces for fabrication and assembly (and probably office space) because you don’t want shards of metal getting into your final assembly. Your fabrication space needs proper ventilation, and your assembly side should be climate controlled so you’re not sweating on electronics. You’ll also need room for workbenches, a place for raw and scrap materials, and a place to store assembly tools, hardware, robot parts, and completed robots.
To run most of the larger machines, you’ll need 3-phase power as well.
You can skip some of these machines and outsource those specific tasks or parts. We created this list based on what we need to build our robots, which vary in size and capabilities.
|Low End||High End|
|– Milling Machine||$10,000||$95,000|
|– Lathe Machine||$10,000||$90,000|
|– Plasma Cutter Machine||$25,000||$70,000|
|– Laser Cutter Machine||$50,000||$200,000|
|– Press Brake/Bending Machine||$5,000||$25,000|
|– Welding Machine||$2,500||$10,000|
|– CNC Router||$2,500||$30,000|
|– 3D Printer||$500||$5,000|
|– Spray Booth for Paint or Powder Coating||$15,000||$20,000|
|– Assembly Tools (Drills, Pliers, Wrenches, etc.)||$2,500|
|– Stock Room of Hardware||$2,500|
|– Plasma Tips & Lathe/Milling Tooling||$2,000|
|– Electrical Meters||$500||$1,000|
|Workstations (per employee)|
|– Work Benches||$500|
|– Software – SolidWorks||$15,000||$25,000|
|– Software – ROS||$0|
|– Air Gas Nitrogen, Oxygen, and CO2 for Plasma||$250/month|
|– Plasma Tips & Lathe/Milling Tooling (ongoing)||$250/month|
Not including the consumables, you’re looking at over $150,000 on the low end to nearly $600,000 on the high end just for equipment. You can spend less on used, off-brand equipment that will probably give you more headaches later or you can spend even more than our higher estimates on state-of-the-art equipment with more features, functionality, and speed.
Much like we looked at the physical space to work being outside someone’s garage, we’re looking at the team you need outside of the founder(s). You can get away with hiring 1 or 2 experienced jack-of-all-trade roboticists, but those higher-end individuals will cost you more than what the entry to mid-level professionals we’re proposing and you’ll spend top dollar for them to do lesser-skilled work like assembly and procurement.
|Role (Entry to Mid-Level)||Low End||High End|
|Procurement & Inventory Specialist||$30,000||$55,000|
These estimated salaries vary widely based on your location. For example, a software engineer in San Francisco may earn 3x that salary due to that area’s high cost of living and competition in the market.
Additionally, you need to budget much more than the $290,000-445,000 in salaries that we estimated. We recommend multiplying these figures by 1.5 to 2.0 to include your burden for taxes, health insurance, 401k, & other employee benefits. With the multiplier, your budget for personnel ranges between $435,000 to $890,000.
Please note that these estimates only cover the production costs of robotics. We did not include salaries for leadership, marketing, sales, IT, HR, etc.
Even if you fabricate much of your robot yourself, you’ll still need to get numerous robot-specific components that would require even more specialized equipment and expertise to create including:
- Motor Controllers
- Remote Control
- LiDAR Sensors
Building Your Business Case
Another aspect you need to consider is your product and business maturity. If you’re a start-up with a concept, you’ll have more bumps in the road figuring out what works and what doesn’t, not just in production but with what buyers want and what the market will pay for your robots.
Unless your volume can save you approximately $1 million in your first 2 years, it probably makes sense to outsource the production of your robots or specific components. If it takes you less than 2 years to break even, you may still consider outsourcing because of the challenges of scaling production.
As your volume increases, you may need to move production to an outsourced manufacturing company anyway, which would negate your investment in your equipment and facility. Additionally, an outsourced partner will probably have higher quality control standards because of the lessons they’ve learned over the years.
If you have any questions about our white labeling capabilities (also known as OEM/ODM) and if they make sense for your robotic company, please do not hesitate to contact us.