Electronic Product Reliability and Revenue: Are Your Profits at Risk?
Electronic Products that Create Sustainable Profit are Made by Design
Across industries, the most successful electronic companies share one common denominator: great device design. The best product design doesn’t just focus on products that look good and are easy to use, it takes reliability into account. Still, when businesses seek to fulfill market needs, reliability can be viewed as a “feature” rather than a non-negotiable.
One reason why electronic product reliability is imperative is that it prevents premature and unexpected failure that could put your profits in jeopardy. As a reliability solutions provider, we have seen our customers experience the following benefits when they use our coatings to protect electronics from harsh environments.
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Cost Containment and Avoidance
No matter how great your product may be or how many sales you have initially made, when your product breaks as a result of exposure to common variables in the environment, it can affect your bottom line. A need for repairs can quickly erode profits, with individual costs that range from $100s-$1000s, depending on the product. Diagnostic fees can also range from $30-$350, compounding expenses.
Warranty claims present similar challenges when your product fails earlier than it should due to corrosion, electrical activity, humidity, chemicals, and more. All told, warranty as a percentage of sales varies from 0.5% to 5% of sales for different industries, a substantial sum of money that, with proper planning, often didn’t have to be lost.
Refunds due to unmet expectations can represent a source of lost revenue, particularly for consumer and medical device industries that use e-commerce as a source of sales. In fact, at least 30% of all products ordered online are returned. Meanwhile, within industrial and IoT markets, service calls can drain profit, costing around $200 per call or more, and a common reason for these calls is to address corrosion-related failure.
Download our Guardian Series Coating Datasheet to See How Our Coatings Help Your Product Withstand all Types of Environments
By definition, unexpected failure is unplanned, and it presents a serious threat to businesses. Consider the potential costs associated with product liability and product recalls. In cases of product liability, the median award was $1.5 million, and the average award is $5.1 million. Some of the highest awards are in the area of medical devices with a median greater than $4M. Sadly, many of these product reliability issues (such as failure upon liquid ingress) could have been prevented with HZO coatings, which, by comparison, would have been an inexpensive insurance policy.
Recalls are another example of how unreliable products can erode profits: the average cost of a product recall is $12M, and this is just upfront. After a product recall, 55% of customers/businesses would temporarily use a different brand, and almost 15% wouldn’t buy that particular recalled product again. Meanwhile, 21% wouldn’t buy any brand associated with the manufacturer.
Build Your Business with HZO
A quick review of the numbers suggests that testing products for the lab is not enough, businesses need products that can work in the real world, on life’s terms. HZO provides coatings that allow your products to function as expected, integrating our processes with yours from within your factory or from within our own. If you would like to learn more about how we can help your business succeed, contact us today for a consultation.
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