New Product Engineering Complete Costs for Design Services, Company Rates, and Company Pricing

Every task related to new product development is an essential part of most companies’ activities, and the investment associated with the endeavor can be substantial but difficult to estimate accurately. There is always a high degree of uncertainty due to market volatility and constant changes in consumer trends.

Table of contents

Product engineering is an inseparable element of new product development. The “engineering” portion primarily revolves around designing, prototyping, testing, and evaluating a product. It won’t be entirely wrong to say that a product engineer is a key figure in overseeing the entire product development process.

The involvement begins at early market research and continues beyond market launch to provide input regarding maintenance and support. Much of a product engineer’s work involves a detailed assessment of a product’s design, quality, performance, reliability, lifespan, cost, usability, and serviceability.

Product engineering services rates

All the fees and costs related to product engineering services mentioned below are based on the pay rate of mechanical engineers. As detailed by the BLS, the estimated income of mechanical engineers is:

The industry categories also affect the pay rate to some extent. For example, mechanical engineers in computer and electronic products manufacturing earn a median salary of $101,100 per year or a slightly higher-than-average rate of $48.61 per hour. The engineering services industry falls slightly behind, with a median salary of $98,280 per year or an income of $47.25 per hour.

Rates per project

It is almost impossible to tell the exact amount you need to develop a new product from scratch. Every new product is unique, and the development process comes with its unique challenges. Many factors are at play, such as the specific product type, design complexity, the number of prototyping iterations you need, and the tooling requirements for mass production. As mentioned earlier, the degree of uncertainty is likely high.

RELATED: How to calculate a product development cost estimate for new products

Although comparable data is scarce, this doesn’t mean you have no points of reference. Below are some examples of the development costs of products already on the market.

If CouchCoaster represented simplicity, the R1 Push trolley was a good example of how a simple mechanical product could still introduce complex challenges to a design team. The market data provided a sense of direction to make sure that the product was right for the target consumers. While it was never supposed to further complicate the development process, having a specific direction could sometimes limit design experimentation.

None of the examples above are electronic products requiring the engineering team to develop hardware and software. The printed circuit board (PCB), as does the firmware or mobile app, calls for its own separate design process. An enclosure must also be created to accommodate the PCB’s shape and dimensions. The development team needs the involvement of mechanical, electronics, and software engineers to materialize the ideas. A product engineer best manages collaboration, oversees progress, and bridges communication with investors/clients.

RELATED: Turning ideas into reality: A guide to bring your invention to life with design firms

What are the roles of product engineers

A product engineer specializes in designing and testing prototypes of a fabricated product and is a decision-maker responsible for subsequent changes in construction and materials. The Bureau of Labor Statistics doesn’t list “product engineer” as an occupation. BLS uses the term “occupation” to define the collective description of various yet similar individual jobs. An occupation is, therefore, regarded as a classification in which jobs or professions with analogous qualities are listed under the same group.

According to BLS, one of the main duties of mechanical engineers is to design and oversee the development of products in a broad range of industries, including but not limited to electronics, home appliances, HVAC systems, medical devices, internal combustion engines, gas or steam turbines, and building services equipment. They develop and test prototypes, investigate failures and recommend solutions, analyze test results, oversee the manufacturing process of products, and make changes to the design as needed. 

As Merriam-Webster describes them, product engineers have qualifications and duties comparable to those of mechanical engineers, as defined by the BLS.

The primary roles associated with the profession are as follows:

• Oversee the entire development process of a product, from the concept phase to the end of its life cycle. In many cases, a product engineer also is responsible for providing maintenance support for products already in the market.
• Design and develop products, including electronics. A product engineer must understand both hardware and software components, as well as how to implement them into a functional product.
• Identify cost-saving opportunities in product development and analyze the financial implications of every design approach or choice the engineering team makes.
• Develop and test product prototypes for safety, reliability, and performance. A product engineer is involved in the prototype manufacturing process to ensure that everything is built according to the predetermined standards and specifications. The same applies during mass production.
• Ensure that every product designed by the team is properly certified by authoritative bodies and is in compliance with industry standards.
• Maintain technical documentation about design plans, manufacturing specifications, prototype evaluations, and instruction manuals.

RELATED: How to hire a product design engineer: Top 3 considerations for your business

The scope of responsibilities of product engineers may vary depending on the companies (or the types of services provided), the products being developed, and the industries in which they work. Examples of product engineering use cases in various industries are listed in the table below.

Regardless of the industries they serve, the biggest impact of product engineers is how they strive to establish as much work structure and management as possible for the product development process. Cost management is one of their unique specialties beyond the scope of technical engineering fields. Integrating technical expertise, market insights, and cost management can propel productivity to its fullest extent while minimizing unpleasant surprises to the core product development processes.

Finding the right company

Once a company has an idea for a new product, it is essential to determine its technical and financial feasibility. The next important step is to determine whether there is indeed a market demand for the product and whether the demand can justify the cost of its subsequent development. At the end of the day, companies want to avoid making products that cannot turn a profit.

A product engineer is an inseparable figure in the development team and works closely with other engineers to streamline all relevant processes, including market research and technical evaluations. Such a close collaboration also helps detect potential issues early on and determine viable solutions to mitigate challenges. Support from a capable product engineer allows for more thorough technical evaluation and validation tests performed in conformity with safety regulations and industry standards. Continuous involvement after product launch, with maintenance and troubleshooting supports, can also deliver a higher likelihood of achieving improved customer satisfaction.