Today’s post talks about how much NPD cost and the rates when working with new design firms. You can be confident that no one will dare to blame you if you find yourself swept up in excitement once you experience your own enlightenment toward a fresh idea for a product. Although you might feel tempted to plummet into product development right away, you might want to cool your jets first. Try to take a few steps back and ponder the expenses required for turning your concept into a concrete reality.
Jumping into new product development (NPD) without identifying the costs of developing your new product may cause your budget to quickly spiral out of control. Even those that may seem like minor tweaks, including materials, prototyping methodology, and overall design, can turn into a larger-than-life bill before you know it.
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Average cost of new product development
Stating a definitive figure for the cost of new concept design & product development services is impossible if you don’t consider different factors. Such factors are distinct not just to your product but also to your company in general. The estimated costs of product development may have significant variations depending on several factors, such as:
- The specific number of components or products you’re thinking of producing
- The product design’s intricacy
- The available resources to you and those you lack
- Whether you’re developing the product yourself or you’re working with an expert product developer
- The design, method of manufacturing, or prototyping you use
- The raw materials you use
- Your product development timeline
If you do insist on getting a ballpark figure to help you get started with the development of your product, the average cost of developing most types of modest products today is $30,000. This figure is only applicable to the simple products. This also covers the costs involved in designing, prototype design firms, testing, and launching a new invention. It’s a given that if your product is on the more complex side, it only makes sense that the product development will have bigger figures. It’s true that it’s common for the development of most products to cost hundreds or even thousands of dollars.
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That is why it’s imperative to calculate the individual costs with extra care or try to request a more accurate estimate from your product developer. A reliable product developer is someone who would be willing to give you a walkthrough of the costs related to different stages of the process. They will also give you suggestions or recommendations on how to reduce the costs whenever or wherever possible.
Once you’re informed on what to expect, you will be more equipped to prepare your finances for the procedure, so no unexpected expense may catch you off guard along the way. The costs involved in every activity may differ according to the specific type of product you wish to develop and the 3D design company you hire. Here’s a quick look at the anticipated costs of product development according to category.
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Design category
Products that belong under the design category come with an aesthetic element as well as the blend of varied materials and parts and even a mechanical function in certain instances. It’s worth noting that products of this sort don’t have any smart or electronic features. Here is a quick rundown of the usual costs and activities in developing products under this category:
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- $500 up to $1,500 for the concept design
- $2,500 up to $5,000 for the mechanical design
- $500 up to $1,000 for the technical specifications
- $500 up to $1,500 for every prototype round, with about 3 to 4 rounds
- $1,000 up to $3,000 for testing
- $5,000 up to $20,000 for production tooling
- Approximately $500 for the initial series of production
Adding up all these figures will give you a rough estimate of $12,000 to $35,000 for the primary development activities of products that belong to the design category.
Soft goods category
Soft goods are made up of products that make use of soft materials, including fabrics, leather, and other materials that resemble rubber. These product designers have a unique approach to design and development that is exclusive to them. Coming up with these products is also relatively faster compared to other types. Among the ideal examples of products you can find under this particular category are wallets, carry bags, backpacks, and several sports goods. That’s just naming a few, of course. Whereas most tech products are also integrated with textiles, only pure soft goods with no tech features will be considered in the following overview of costs:
- $500 up to $1,000 for concept design
- $500 up to $2,000 for technical drawings and pattern
- $500 up to $1,000 for technical specifications
- $$500 up to $1,000 for every prototype round, with around three rounds
- $500 up to $1,500 for the testing
- $1,000 up to $5,000 for the production tooling
- Approximately $500 for the initial series of production
The said category has an estimated range of anywhere between $5,000 and $15,000 for the primary activities for product development.
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Technology category
Products belonging to the technology category share almost all of the activities with those in the design category. The only difference is that this group features additional technology and electronics that require several approaches and electronic prototyping and design professionals to put everything together. Technology category products need longer cycles of development because of the demanding certifications and prerequisites.
This category includes products such as consumer electronics, smart products, wearables, hardware, and drones, among many others. Below are the typical costs and activities involved in the development of products under this particular category.
- $500 up to $1,500 for concept design
- $2,500 up to $5,000 for mechanical design
- $2,500 up to $5,000 for electrical design
- $1,000 up to $2,000 for technical specifications
- $1,000 up to $2,000 for every prototype round with around 4 to 5 rounds
- $2,000 up to $5,000 for certifications and testing
- $10,000 up to $30,000 for production tooling
- Roughly $1,000 for the initial series of production
Developing these technology products can go from $25,000 to $60,000 for the key development activities. These figures could blow up further if custom software like an application is needed. The asking price may also spike if you hope to develop highly regulated items, for instance medical device design & development experts in the medical field or those with more complex technologies.
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Based on all the data above, you can already deduce how much investment money is required for building a physical product. The numbers stated above are only the costs of technical new product development services. There might still be a need for you to include other costs for marketing, business, and sales to this amount if your target is to have a full market launch of a physical product.
The main problem here is that most of the time, the prices are also the reason why a lot of people end up leaving their ideas behind and completely abandoning them before they attempt to start something. What’s even worse is that many of them get started without taking into serious consideration the possible costs that the process may need, with most of them realizing this just when it’s already too late for them to do anything.
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How to lower new product development costs
It’s actually irrelevant if you’re running your own small business in your local area or you’re a multinational company with customers all over the globe. You can reap more perks if you try to lower your product development costs as much as you can. After all, why should you bother wasting money when it is possible not to? One of the easiest ways to cut down the costs of developing your new product is to embrace the so-called lean practices.
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Lean product development, loan manufacturing’s offshoot, determine end goals, including waste reduction, developing innovative designs that will be valuable for customers, enhance product quality, and expedite the development cycle. These goals all lead to cutting down your costs after some time. Reducing waste means you’ll be spending less on excess labor or raw materials. Once you’ve pinpointed the needs and wants of your customers, you can already prevent wasting your resources, money, and time on products that won’t even sell a piece and just lead you to a disheartening dead end.
Taking the quality of the product to the next level can also boost your sales. It saves you from the need to make an upfront allotment for more financial resources on quality materials. Your return on investment will be higher as a result, too. A speedy product development cycle also ultimately means that your product will hit the market in the shortest possible time. When this is the case, you could already offset the product development cost almost immediately.
On top of these overarching goals, other concepts that lean product development focuses on include concurrent engineering, engineering expertise, keeping a solid knowledge base, rapid prototyping services, and training. To hit all these objectives, you might want to work with NPD design services, as this is the most cost-effective means of fully embracing this system.
How Cad Crowd can help
Cad Crowd can help you get in touch with the most trustworthy NPD design services. We will save you from fears of incurring additional costs from hiring staff members or paying for their training. Regardless of the size of your product or the stage you are in, Cad Crowd has a large pool of experts who can lend you a hand. Request for a quote today.
