One of the recurring questions about EPC is, "How much is this going to cost me?"  While every company is different -- and the cost depends on whether you're implementing a one-printer slap-and-ship program or one that reaches further back into the enterprise, one thing is clear: it's not cheap.

First, there's the cost of EPC membership.  EPC fees are determined based on total sales of the parent company and the yearly maintenance fees are reportedly in the neighborhood of 10 percent of the initial fee.

Louis Sirico, an RFID author, puts the cost of a simple slap-and-ship implementation at about $100,000.  This figure includes only one printer, two dock door read points and associated software and integration services.  Sirico estimates hardware costs at about $20,000 and middleware at about $30,000 (although he's been criticized for publishing such a "low" number).  He pegs the cost of additional "external services" at about $50,000.

This figure, however, may be misleading.

According to Mark Brown, Project Manager Systems and Services Smart Packaging at International Paper, companies that might fall under the slap-and-ship model noted in the $100,000 figure above are likely tagging a small percentage (certainly less then 20%) of their SKUs.  In that scenario, tagging just prior to shipping is probably best done by a 3PL (third party logistics provider) or DC (distribution center).  Companies typically have to be tagging 25-30% of their SKUs to justify moving the process back internally.  At 55-65% of SKUs tagged, there's a tipping point where it's more cost-effective to tag everything at the manufacturing level.

This model significantly skews the cost model for implementation in favor of larger implementations -- and significantly higher costs.  However, infrastructure may be a nearly fixed cost for implementation if serialization is taken into account.

According to Stephen Schwartz, RFID Systems Architect for Intermec, the issue for many suppliers is their IT systems.  Most aren't able to accept or utilize serialized carton and pallet information.  He likens the costs to the Y2K issue.  Suppliers that want to go beyond the slap-and-ship model and utilize the information provided by an EPC tag will have to rethink and revamp their systems if only to generate the thousands (or millions) of unique serial numbers required.  Then there's the issue of storing and communicating the information.

One estimate, posted on a discussion board, offered the following proposed starting point for calculating the cost of EPC compliance and includes costs many people overlook.

1. Sending IT people to RFID training and exhibitions

2. RFP preparation

3. EPC Membership

4. 1Sync Membership (formerly UCCnet and Transora)

5. Hardware-startup (readers, printer, applicator, antenna, hardware, cables, installs)

6. Middleware - (Software, integration, customization, mapping to existing ERP, EDI, etc)

7. Initial installation of two dock door portals consulting, business process analysis, site survey, tag optimization, R&D)

8. Network integration and setup

9. Server(s)

Many of these costs are variable, but depending on what percentage of products is tagged, EPCglobal and 1SYNC memberships are, as we understand it, scaled to the size of your company.

Additionally, costs for testing tag selection and placement on each product packaging configuration should also be included.