How to Put an LLM in Your Product Without Wrecking Your Costs or Your Latency

Adding an AI feature looks deceptively easy. You sign up for an API key, paste in a prompt, and within an hour you've got a working demo that makes the whole team lean over your shoulder. Then you ship it, traffic arrives, and two things happen at once: your latency graph develops a long, ugly tail, and your monthly bill arrives with a number that makes finance schedule a meeting. The gap between "impressive demo" and "production feature" is almost entirely about cost and latency engineering. The model is the easy part. Here's how to cross that gap. First, understand what you're actually paying for Most LLM APIs bill by tokens — roughly ¾ of a word each — and they bill both directions: the tokens you send (input) and the tokens the model generates (output). Output tokens are usually several times more expensive than input tokens, which has a non-obvious consequence: a verbose prompt is cheaper than a verbose answer. This reframes optimization. People obsess over trimming their prompts while letting the model ramble for 800 tokens when 80 would do. If you want to cut cost, the highest-leverage move is almost always constraining the output : ask for JSON, ask for a single sentence, set a max_tokens ceiling, and tell the model explicitly to be terse. Latency follows the same logic. Generation is sequential — the model produces one token at a time — so output length is the single biggest driver of how long a request takes. A 50-token answer is fast almost regardless of model. A 2,000-token answer is slow even on the fastest infrastructure. Lever 1: Don't call the model when you don't have to The cheapest, fastest LLM call is the one you never make. Two techniques eliminate a startling share of traffic. Caching identical and near-identical requests. Many real-world prompts repeat — the same FAQ-style question, the same document summarized twice, the same classification of similar inputs. A cache keyed on the normalized prompt turns a repeat request into a sub-millisecond