So you have an excellent consumer electronics product development and want to manufacture and ship it worldwide?
You might be thrilled to take it to the last person on this earth.
But don’t make the mistake that most entrepreneurs and business owners do. Some enthusiasts forget the cost of new product development, from putting the idea on paper to shipping the product to the end-user.
If you miss out on considering the estimated cost for development, you may get surprised when the capital gets emptied quickly, or you get into heated discussions with your suppliers due to continuously thinking about the cost being too high.
The development cost estimation helps the new product development companies look into the stages and costs they must go through. As you determine the steps, design the process flow, and understand what the product’s ideation, design, and manufacturing will cost, you may optimize expenses by proactively planning them.
Let’s explore the hardware product development stages and factors you need to consider for estimating the cost of a working prototype.
What Factors Affect Product Development Cost?
Depending on your product type, there are various considerations you must make while determining the product development cost. The following factors affect and determine the direction of product manufacturing costs:
Try to see whether your product needs to be as complex as it is. Pre-assessing the complexity may take some time and cost you a little, but a complex product structure will break your spine as it will demand more screws, joints, circuits, etc. Later, the cost of these accessories will make it tough for you to optimize other costs. Also, why simply give away more money while you can save product manufacturing costs via simpler design?
The nature of the product derives from the type of material to be used. The product’s nature also plays a vital role in cost estimation and full product development. For example, the cost of development increases while moving from high-grade plastic to aluminum and steel. Some of the considerations to make are: What is the product going to be used for? Will it have excessive wear and tear? Ask these questions to yourself and then make a decisive choice.
The cost estimated for 3 / 5-axis CNC and indexed 5-axis CNC machines will differ from each other. Hence, you will need to ask yourself if your product really needs a specialized complex machine for production.
When delivering it to your customers, dealers, or suppliers, you will need to pack the product in new product packaging. Also, you must take care of the accessories and documents such as manuals, if you will provide any. The cost of the material used in the packaging design also helps determine the entire cost of production.
The cost estimation of production depends on the minimum amount of products you want to manufacture. This means that the larger the number of units, the higher the cost.
Let’s say you import some material or equipment from other countries. You will now have to pay the price of the imported goods and their duties. Therefore, the more you import, the more you will have to pay for materials and duties.
Now that we have discussed the factors that help product development cost estimation let’s discuss how much it costs for full product development on average.
What’s the Average Estimated Product Development Cost?
The given number implies the product’s cost of designing, testing, prototyping, and launching. It is very likely for a product to develop after an expenditure of several hundred thousand dollars. Therefore, hiring experienced product developers will help you have accurate product development cost breakdowns. But how much does it cost to manufacture a product? We will see estimated costs for all the stages.
Stages of New Product Design, Development, and Costs Involved
Now that you have the factors to consider while estimating the cost and the average cost. So let’s see through the production stages from the NPD product’s ideation stage to the packaging and shipping.
The preliminary design includes the working system’s functional block diagram and the components that play a crucial role in the product we will be producing.
It is advisable to generate a BOM (Bill Of Materials) preliminarily for the premature estimation of the cost that will go into manufacturing the product.
Generating a BOM early will help you get an idea of the cost of the remaining development costs since it will reveal the complexity of those steps.
Preliminary Product Design costs around: $1,000 – $5,000
After drawing the preliminary design, when you put the data in the PCB Design Software, you get the detailed structure that gives you an understanding and the map of not just the components you listed but also the low or negligible-cost items such as resistors.
When you generate a BOM through the PCB design software, you get a more accurate cost list since it will provide you with the BOM for each component on this schematic diagram of your product.
Schematic Product Design costs around: $2,000 – $8,000
In this stage, the Printed Circuit Board design is done in the same software where you made the schematic product design by yourself or you can ask for the help of an agency that provides PCB design services to save time.
The PCB design for the product helps the user check out the components and structure that are to be used in the ready product. Therefore, this software will affirm that your PCB structure matches the design rules you have put with the schematic design.
As a human eye cannot do the verification, the same software helps you verify your PCB design. Therefore, the cost of the PCB Design Layout will be almost the same as the former design process.
PCB Design Layout costs around: $2,000 – $9,500
The first stage of successful product testing is prototype product development. Then, components are soldered on the PCB, and the included cost counts for the soldering of components, PCB (designed and empty), shipping, and buying cost of the components.
You must get at least but not more than 3-5 boards for prototypes in major cases. Then, once you are sure that your product is functioning well, you can add more. So how much do prototypes cost around?
PCB Prototypes cost estimation: $3,000 – $9,500
Now you need to make the software using which your circuit board and the controller will do the desired functioning. Mobile apps and Computer Software are also included in this.
Software Production costs around: $7,500 – $50,000 (depending on the complexity level of the product)
This is the part where your PCB meets its showrunner, the software. The embedded software on your product shows you the result of the hardware simulation & analysis of your product design. It may be through an app or other means of testing the results.
Integrating costs around: $3,000 – $9,500
Here, extensive tests are done on the product to check if it gives the desired results.
Debugging takes a lot of time, and you never know what difficulties may arise in the future, so the cost is harder to revise.
Testing/Debugging costs around: $3,000 – $9,500
Document everything about the product research, PCB design, and the difficulties you face from start to end. You must tell freelancers about documenting since most don’t do it by default.
Documentation costs around: $1,500 – $5,000
The enclosure is the part that holds the electronics. Of course, they are an exception, but when produced, the major function is for the enclosure of the end product.
They consist of the 3D Model Design – Photorealistic 3D Design – Enclosure Prototyping.
Enclosure Design and Prototyping collectively cost around: $6,500 – $24,000 (for all three designs)
Once the product is ready, you will have to put the manuals, the accessories that come with it, and the product itself in a package to ship it easily and not separately.
Packaging Design costs around: $1,500 – $4,500.
When you hire a hardware product development company or freelancers, they will give you a bill for their provided services, you will have to consider this cost.
Without the integration of the work of all these engineers, product development wouldn’t be possible.
Project Management costs around: $3,500 – $10,500.
Let’s put all the costs here in a concise table to understand it better.
|Preliminary Product Design||$1,000 – $5,000|
|Schematic Product Design||$2,000 – $8,000|
|PCB Design Layout||$2,000 – $9,500|
|PCB Prototype||$3,000 – $9,500|
|Software Production||$7,500 – $50,000|
|Integrating Hardware and Software||$3,000 – $9,500|
|Testing Debugging||$3,000 – $9,500|
|Documentation||$1,500 – $5,000|
|Enclosure Design (For 3D & Photorealistic 3D Model + Enclosure Prototyping)||$6,500 – $24,000|
|Packaging Design||$1,500 – $4,500|
|Project Management||$3,500 – $10,500|
All these are estimated average costs for major products and can also be regarded as product development costs examples. The final cost may vary from product to product. There is always a chance of improvement in the system to save some costs.
Let us see how?
How to Keep Development Costs Low?
No one wants to spend money when it isn’t necessary. However, no matter how big a business is, the costs are always a concern. Therefore, to keep costs lower, you need a manufacturing system that is lean enough for the categories of the new products to save you the cost.
A lean manufacturing system will:
Several other factors like having the project’s documentation on hand, training all the team members, efficiently doing more functions simultaneously, hiring expert engineers, and rapid prototyping can help if considered thoughtfully.
Now can you get done all the integration of these factors, stages, and methods? Simply hire a product development project manager that looks out for your efficient development process.
All the costs that we have shared with you today are ranges that are estimated for product development. They may vary depending on the product but they will surely help you get an idea of what to expect while getting into the consumer electronics product development process.
Let us know if this post has been useful to you. We can be the bridge between you and your end product. Our product engineering services with experience will speak for themselves.
The most effective way to develop a product is to make every stage that is constituted in the development process:
These processes are: