Let’s be clear - bringing a product to market is not cheap. Think in the tens of thousands or hundreds of thousands of dollars. But successful businesses know that product development and innovation are key to continued growth, and that the investment is well worth it once sales begin.
With design being the first step, let’s discuss some of the costs involved in hiring a professional product design firm. Although the process is highly variable, we’ll try to include real numbers to give you a sense of what you can expect, but every project will be different.
What does a professional product design firm do?
First, let’s look at what a product designer will do for you.
Most professional product design firms offer many services that help ensure new products have the best possible chance at success in the market. For more detail, check out our article on what product design firms actually do. You might not need all of these, but almost every project requires most of these tasks to be done:
- Concept development: The first step in any product design is concept development. The initial design idea is expanded upon to develop a range of concepts that meet the spirit of the initial idea but solve it in several different ways. One way to reduce cost is to come to the designer with a well thought out concept for the product. They can then help refine the concept together with you. This step involves lots of sketching, research, preliminary calculations, and communication.
- Product planning: This process involves finalizing the product specification, calculating cost estimates, and performing competitive analyses on existing products. Here, we really get specific and create a product specifications document, which lists many important details about the project and serves as a guide for the next steps.
- Design: Product design is far more than just a CAD model and a rendering. It’s a multi-step process that could consist of mechanical design, design for manufacture, electronics design, software development, industrial design, and more. Advanced computer-aided simulations may also be needed to ensure that the design will behave as expected when exposed to real-world loading conditions. Finally, drawings are made so that manufacturers can quote on and produce the product. This is the bulk of the work in product development, and mistakes here can incur significant costs later on.
- Visualizations: The CAD model is used to create detailed visualizations to show how the product will work, as well as to preview its overall appearance.
- Prototyping: Once the first iteration of the design is complete, a prototype is created to test out the manufacturing and assembly process as well as evaluate the functionality of the product. This is a critical step, as it is very unwise to send a fresh design directly into production. Even the best designers and manufacturers can’t predict everything that can happen, so a prototype is essential.
- Certification: A third party certification provider like CSA, ETL, UL, or others may need to test your product and ensure it complies with relevant standards. Your product design firm can assist with this process.
- Documentation: User manuals, maintenance manuals, catalogs, and more can be created to provide an excellent customer experience and to comply with regulations.
- Manufacturing support: Dealing with manufacturers is a daunting task. Design firms can liaise with the manufacturer to get them up to speed with a new product, and ensure that the products are being made according to specifications.
How much does product design cost?
Of course, product design costs depend on the scope of the design, regulatory requirements, design time, prototyping, and the level of project management required. Complexity is a huge cost driver, so keep things as simple as possible. Larger companies also have more risk in bringing a product to market, and will pay more for additional testing, functionality, and support staff to make sure the product is well supported. Let’s first have a look at some real world product development costs:
In the table above, development cost is an approximate cost to go from idea to marketable product, and production investment represents an up front cost to start manufacturing the product.
Many people are surprised to see how expensive it can be to develop a product, even something as simple as an ice cream scoop! The good news is, today product development is more approachable than ever.
Let’s assume your small company wants to hire a firm to design a new type of outdoor grill. You have 5-50 employees fabricating and selling high end barbecues and grills, so you know the market and the products, but you have no in-house design capability. Let’s also assume the new BBQ is fairly simple with no electronics, and needs an attractive, industrial look.
You can expect to hire a firm for somewhere between $30-$60k to turn your idea into a fully functioning, manufacturable, attractive product design. With that, you’ll get a professional drawing package, manufacturing files like 3D models and flat pattern DXFs, renders to see what the product will look like, and other reports or assets depending on what is required.
For a third party certification agency like CSA to inspect and certify your product, you’ll pay from $10-$20k.
To start manufacturing your product, you might spend $100k to produce the first batch of 200 grills. If you have in-house manufacturing, this might be less; if not, you’d hire a fabricator to make the product for you.
Then, marketing and other costs are highly variable. But the above costs should give a (very) rough idea of what it takes to get started on a product with some level of complexity.
Risks of poorly designed products
It is tempting to cut costs as much as possible during product development, and for extremely simple products (think 1-2 parts), you may be able to do so. But for products of any complexity, trying to manufacture and sell a poor design will quickly drain your time, money, and sanity. Let’s have a look at some of the issues that could come up:
The product is not designed for manufacturing
Once a product has been designed and tested, the next step is to prepare for manufacturing. However, this is often where reality catches up with poorly designed products. Injection molded plastic parts offer the clearest examples of poor design driving costs sky high. Injection molded parts are cheap, but the molds themselves are extremely expensive, especially if the part was not designed per DFM (design for manufacture) principles. Overly complex moulds drastically reduce the product’s profitability or can even make the part too expensive to bother manufacturing in the first place. The same idea holds true with any type of design, from sheet metal to CNC machining, even custom electronics and PCBs.
A similar common scenario is designing the product without creating proper drawings in the first place. You can read about the importance of professional manufacturing drawings here, but needless to say, if you don’t have good drawings you won’t have a good end product.
The product does not meet regulatory requirements
Even a well-designed and expertly manufactured product runs the risk of falling afoul of regulatory and certification standards. This can result in significant financial loss. An entire production run and all the associated tooling may need to be scrapped if the relevant regulatory bodies do not certify the products. To minimize risk, a prototype should be submitted for testing before an investment into production runs should be made.
In most cases, products must be designed in accordance with manufacturing standards and safety regulations. Professional product design firms have access to the most recent versions of these standards and regulations and know how to meet the requirements as cost effectively as possible.
No direction
Creating a new product is exciting, but if you run at it without a plan, you’ll stumble or miss something critical along the way. Inexperienced companies might constantly change their minds about what they want, or not know what they want in the first place, drifting around and wasting time and money.
Spending time developing the concept, doing market research, and other proper product planning will go a long way towards the success of the project. A good product design firm will come equipped with tried-and-tested processes and guidelines to ensure the development goes smoothly, and the final product is a winner.
It’s true that bringing a product to market is expensive. For an established company or new startup, it’s a serious investment with many associated risks. It’s also a necessary part of growth and critical to remaining relevant in any industry. The key to success is to have a solid plan, and a team with experience navigating the complex product development process. If you’re ready to take your business to the next level, reach out to Riganelli Design to see how we can help - we’ll also be happy to help you determine costs for your specific project.
