Designing a brand-new consumer electronic product design from scratch costs an average of $50,000 to $500,000. The money covers all the development stages from PCB design to mass production, including hiring the product development company or freelancers. The cost can reach millions if the product is a medical device, which requires FDA approval in the United States.
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Design stages and cost
The following list of development stages can be used as a generalized guideline to determine a rough cost estimation of consumer electronic product design services.
PCB design – $10,000
It might sound like too much money as a starter, but it is the minimum you should spend to get quality electronic components and programming. The electronics will be the beating heart, the brain, and the most crucial part of the design, so it makes good sense if they account for the product’ most expensive building blocks. Electronics design consists of the hardware—in this case, PCB—and the firmware settings.
Most electronics and freelance electrical engineers work on a contract basis with an hourly rate of around $44 in the United States. Setting up a good contract with a “do-not-exceed” clause prevents you from overpaying, and the clause sets the maximum amount you will pay even if the project takes longer than expected.
Hiring a freelance electronic engineer with per-project pricing helps avoid the issue of overpaying even if the timeline doesn’t go exactly as planned (and in most cases, there is always something wrong that pushes back the completion date).
PCB prototyping – $1,000 per iteration
Some electronics engineers prefer working on two different PCB designs to compare performance and functionality. After PCB design experts approve the designs, the next step is to prototype them. It involves the bare manufacturing PCB and assembling all components required, and each must be prototyped for real-world testing. Explore the benefits of utilizing electronic prototyping services to facilitate the process.
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Software – $5,000
All electronics require firmware or programming to govern the features and functions. There are microprocessors and microcontrollers to determine how the components communicate. In case the product must offer compatibility or pairing with other devices, such as computers or speakers, the programming task is a step higher in complexity.
Enclosure – $5,000
Yes, you can use other materials like aluminum or metal alloys, but the cost will go through the roof. Remember that most metals are heavy, corrosive (except the precious types like gold, silver, and titanium), and harder to manipulate than plastics. It is also possible to sell the product without enclosure, especially if you plan to sell it as a “component” in the DIY market.
You should spend less than $5,000 on a single design. Hiring a product designer is a good bet; working with a professional industrial engineer is almost guaranteed quality. If aesthetics are your priority, a freelance 3D modeler will be suitable. Consider leveraging freelance electronic enclosure design services for an optimal expertise.
Enclosure prototype – $500 per iteration
An estimated $500 per prototype unit cost should be sufficient if the product is handheld. More oversized products can be expensive. The easiest method to prototype a plastic enclosure is to have it 3D-printed, and the advent of additive manufacturing services makes the process quicker. If you allow the prototype to be rough around the edges, you can use a consumer-grade 3D printer.
Retail package design – $3,000
The significance of packaging is nearly on par with that of the product itself. Refrain from falling into the same trap of thinking that packaging doesn’t affect buyers’ decisions much. You probably have the most outstanding product in the aisle, but it won’t sell if the retail package fails to convince consumers.
In addition to protecting the product during shipping and providing general instructions, the retail box is where the brand name sits. It is the first thing buyers see and the best media to shape their minds into purchasing. Designing the retail package is a job best left to a graphics designer.
Retail package prototype – $750 per iteration
To prototype the retail packaging design, choose from clamshell and boxed products or consider leveraging freelance packaging concept design services for innovative ideas. Each has its upsides and downsides, but they are equally effective. Regardless of type, use high-quality materials and eye-catching printed artwork. Printing a separate instruction manual for each retail unit might be necessary.
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Certifications – $10,000
Most, if not all, electronic products require multiple certifications before they can be sold. Certifications can cost more than PCB and firmware programming. Common certifications include:
- FCC: since most electronic products generate RF emissions, they might interfere with wireless communications. FCC certification makes sure the interference complies with the approved standards. The process costs at least $10,000.
- SDoC: unlike full FCC certification, an SDoC is a self-issued declaration by the manufacturer that an electronic product may emit unintentional RF emissions. The average cost is $5,000, and FCC and SDoC apply to products sold in the United States.
- CE: in many respects, the standards set by FCC are similar to those enforced by its European counterpart, CE. If a company has the facility to conduct the testing required, the CE certification cost is around $300. The price is around $5,000 or more when an independent party performs the testing.
- UL: the average cost to conduct UL testing for product safety is between $5,000 and $15,000. Manufacturers can hire a consultant from the UL to guide them during the procedures.
- RoHS: applicable in Europe and the State of California, RoHS verifies that the product does not contain hazardous materials in quantity more than the allowed limit. The certification can be self-issued if the manufacturer can conduct the necessary testing. Otherwise, hiring a third-party laboratory can cost $1,000.
- REACH: applicable for electronic products to be sold across the European Union, REACH is almost like RoHS because they limit the amount of potentially dangerous substances in every product. The cost for the certification is in the range of $100 per substance.
The total cost of certifications ranges from several thousand to $50,000, depending on the product’s functionality, materials, and market country. Certification for electronic design experts is only required once the product is ready to hit store shelves. Completing the process before initiating mass production is advisable.
Cost of designing
| Design Stage | Average Cost | Notes |
|---|---|---|
| PCB Design | $10,000 | Hardware and firmware settings; a crucial part of the design |
| PCB Prototyping | $1,000 per iteration | Real-world testing of PCB designs |
| Software | $5,000 | Firmware or programming for electronics; microprocessors and microcontrollers |
| Enclosure | $5,000 | Material options: plastics, aluminum, metal alloys; can also sell without an enclosure |
| Enclosure Prototype | $500 per iteration | Prototyping a plastic enclosure, e.g., via 3D-printing |
| Retail Package Design | $3,000 | Packaging design for the product; important for buyers’ decisions |
| Retail Package Prototype | $750 per iteration | Prototyping of retail packaging design |
| Certifications | Varies, up to $50,000+ | Includes FCC, SDoC, CE, UL, RoHS, REACH; mandatory and voluntary certifications |
| Manufacturing | Depends on MOQ & unit cost | Cost based on price per unit and minimum order quantity (MOQ); transition from prototype to mass production |
| Additional Cost | Varies | Includes warehousing fees, business insurance, overhead expenses, trademark licensing fees, designer hiring |
The cost of designing and launching a new consumer electronic product can vary significantly based on product complexity, certifications required, manufacturing volume, and additional expenses. The estimated cost for designing a brand-new consumer electronic product from scratch is between $50,000 to $500,000 and can reach millions for medical devices.
These costs cover all stages, from PCB design services to mass production, including hiring freelancers or a product development company. The development cost for non-medical products is likely one million dollars, except for highly complex robotic applications.
It’s important to note that the retail price per unit is determined based on production cost, which includes manufacturing and shipping fees. As products make sales, the profits will gradually cover the initial investment, and production cost will remain a factor.
RELATED: Guide to new electronics prototyping for hardware startups & design companies
Manufacturing
Many design services lend their expertise to the point of mass production to oversee the manufacturing process on behalf of the client. The transition between the final prototype and mass production is likely a complex process. Just because you have the final prototype, it does not mean any factory will take a production order without some changes to the original design. Working with a prototype manufacturing designer can facilitate this transition, which may take about 12 months.
The manufacturing cost depends on the price per unit and the minimum order quantity (MOQ). Let us say a unit of your electronic product costs $50 with an MOQ of 500 units. The first production batch already requires a budget of $25,000. Collaborating with a local factory partner first is advisable to keep communication accessible. You can work with an overseas factory (with a smaller price per unit), where the cost is smaller as the manufacturing volume grows.
Additional Cost
Apart from everything else mentioned above, there will be additional costs such as warehousing fees, business insurance, and overhead expenses. If the product comes with Bluetooth, you must pay a licensing fee for using the trademark. An amount of $2,000 per month should be more than enough. The cost of hiring a freelance electronic product designer is not optional, and you have to hire one to help streamline the process and save money.
The cost of designing and launching a new consumer electronic product, often leveraging electronic design experts, can be overwhelming, especially for small businesses and startups. It is indeed the development cost that becomes the first major obstacle along the way.
Another important thing is that you cannot determine the sales price per unit based on the entire product development fee. You set the retail price based on production cost, the sum of all the expenses for manufacturing and shipping the products to buyers. As the products continue to make sales, the profits will eventually cover the initial investment; that said, the production cost will always remain a factor.
How Cad Crowd can assist
Whether launching an innovative gadget or refining an existing electronic product, Cad Crowd is here to connect you with the design talent you need. Our platform boasts a vast network of experienced freelancers specializing in consumer electronic product design services.
With Cad Crowd, you have the opportunity to work with top-tier designers, all while staying within your budget. Don’t let costs hold you back—our freelancers offer competitive rates and personalized pricing to meet your project’s unique needs.
Ready to take your electronic product to new heights? Let Cad Crowd be your trusted partner in design excellence. Begin your journey by getting a free quote today, and let’s make your project a reality!
