A refrigerator is considered to be a large home appliance and usually costs a lot of money; however, it is rarely known that what is the true cost of producing a refrigerator. This article aims to provide an answer to how much does it cost to manufacture a refrigerator.

First of all, since the manufacture of a refrigerator requires a series of working procedures, including equipment, labor, technology, and so on, the costs of manufacture a refrigerator will vary from company to company. For example, the relevant experience of the company’s employees will influence the cost. The less experienced the development group, the more costly development becomes as mistakes are made and shortcuts were taken. There are simply three stages including design, development, and production. The production of a refrigerator may involve the purchase of patents which can cost from $10k to $100k.

At the first stage – design, you need to design the whole refrigerator.

To produce a popular refrigerator, appearance is very important. A good design appearance can make your product more attractive, hence your designer should pay attention to this process. Besides, choosing the materials, designing the mechanisms, conceptualizing the possible failure point (FMEA), choosing assembly methods for all components are included in the first stage.

The second stage- development

The development stage will involve choosing the feasibility of molding and assembly if an uncommon material or geometry is required, buying injection molding tools, automation equipment, assembly equipment. In addition, you need to develop the testing process and determine the most relevant testing methods. When it is necessary, you also need to validate the design and apply for any necessary certifications.

The third stage - production

The production stage will include organizing the production facility, finalizing all processes needed, then advertising, distributing, monitoring sales, and troubleshooting the inevitable series of issues with manufacturing.

Another important job is to hire people you need in the manufacturing process. Engineers are the most important employees for your company. For instance, you will need an experienced design engineer (specializing in refrigerator and home appliances products), an experienced manufacturing engineer, and an experienced electrical engineer. You will also need some employees to keep track of finances and boost sales. These are just a part of the employees you will need. You may need more staff when it is required. And I cannot guarantee the salary of these people because it will largely depend on where you are and what level of people you want to hire.

Next, I will talk about raw materials and the manufacturing process in detail.

Raw materials:

With the development of technology, refrigerators today become more complicated, hence requires more raw materials. A typical refrigerator nowadays needs several basic components: the refrigerant, the fixtures, the exterior cabinet and door, the insulation inserted between the two, the inner cabinet or liner, the cooling system, and so on. The materials that are used to produce cabinets and doors include aluminum or steel sheet metal and usually, these materials need to be prepainted. The metal is usually purchased in a coil that is either fed directly into the manufacturing process or cut to size and fed sheet by sheet. The inner cabinet requires sheet metal or plastic. The insulation that fills the gap between outer cabinets and inner includes polyfoam or fiberglass. The components of the cooling system include a condenser, compressor, coils, and fins. The tubing is generally made of copper because of its ductility – the ability to bend without breaking. Freon is still the most commonly used refrigerant. But there are many harmless refrigerants in the market recently. Besides, most large interior fixtures such as door and cabinet liners are made of vacuum-formed plastic while smaller fixtures such as butter compartments, egg trays are made of small plastic blanks. Other materials can be used to make fixtures and the prices will be different. Based on the raw materials that a refrigerator needs, it is easy to roughly calculate the cost according to local market prices.

The Manufacturing Process：

The composition of a refrigerator is relatively simple. It can be roughly divided into four parts – outer cabinet and door; inner cabinet; cooling system; testing and adding accessories. 

Outer Cabinet and Door

The outer cabinet is made of pieces of sheet metal that are either welded or clinched together. If the sheet metal was not purchased in pre-coated form, it is now painted. Some factories use spray equipment to lay a uniform coat of paint on the metal sheet.

Inner Cabinet

The inner cabinet is usually made from sheet metal that is quite similar to the outer cabinet. In order to improve insulation and looks, any seams should be caulked. For the inner liners, some manufacturers and models use plastic, and these plastic liners are vacuum formed. Then the inner cabinet will be inserted into the outer cabinet, and the two are snapped together before the fixtures are inserted.

Cooling System

The refrigeration components are attached to the cabinet using screws and clips. The seal on the refrigerator door is created utilizing magnet-laden gaskets that are attached to the doors with screws.

Testing and adding accessories

Most manufacturers mix testing with manufacturing from this point on. The unit is leak tested with nitrogen, and if. It passes, is charged with refrigerant, and is subjected to further testing. After that, the accessories are added and taped down for shipping. The unit is given a final look and then packaged for shipping.

The above are basic costs that may occur in the process of manufacturing a refrigerator. However, there are other costs that may occur sometimes. These costs include quality control, waste of materials, and also environmental concerns.

Overall, the industry barrier of the refrigerator and other household appliances manufacturing is relatively high, so if you want to invest in this industry, it will be a long-time project and will take a lot of time and energy. After you successfully establish your refrigerator factory, you have to decide to sell products yourself or find resellers or distributors. Therefore, you may need the marketing team.

It is a good idea to be a distributor rather than manufacture a refrigerator yourself. By doing so, you will take fewer risks and the overall profits would be higher.  If you’re eager to gain a deeper understanding of the industry, we invite you to reach out to us through our convenient one-line chatting system or by filling out a simple form. By doing so, you can effortlessly request the necessary file that contains a wealth of industry information. We understand that knowledge is power, and we are committed to equipping you with the insights you need to navigate and excel in the electric appliance industry.