The Costs of New Product Development

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It happened – you had a light bulb moment – a product idea you know will be big – but how much will it cost to develop? The truth is, it depends on so many factors, it’s hard to say. But in this blog, we will look at the costs associated with developing a specific type of product – a physical, consumer product, made for mass production.

Although this is still an extremely broad category, we will take a look at the typical costs of each step in the product development process. We will dive into what determines the cost and why it varies depending on the type of product. Broadly speaking, the cost of product development will be from $60,000 to $175,000 and that can swing both high and low depending on who you hire, what you do yourself, the complexity of the project, and countless of other considerations.

Why so much? Well, there’s more to product development than meets the eye, and that’s what we’ll dig into today.

Ventrify product development process

Let’s explore each of these potential costs and the factors that influence each cost:


There are also many soft costs, like finding and qualifying contractors, managing communications, timeline delays, etc., but today, we will focus on the more concrete aspects of the product development process. 

Let’s dive in:

Why it’s important to understand product development costs before jumping in

There are many steps to the product development process, and each costs money – but not every step applies to every product in the same way. 

Whether this is your first venture to creating a new product for the market, or you are a serial creator that has launched several products, knowing how much it would cost to develop your product is vital. 

If you start blind, you may run out of funding before your product ever launches, disappoint investors, or show your naivety to strategic partners. In this article, we hope to give you insight into the process so you can start from a place of knowledge.

The Cost of Research and Ideation

[Cost: $2,500 – $5,000]

In planning to launch a new product, the first step is to understand the problem, and how you solve that problem. You want to see how big the problem really is and the greater market opportunity. There are many ways to do this, but the goal is to come up with a product concept with functional elements that serve as a foundation for product development. 

With Research, a holistic and objective perspective of the problem is reached. This is often necessary because the founder of a business is intimately attached to the problem, and doesn’t always experience the problem the same way as everyone else. Although the founder is the one to finds the problem and often the solution, the product design process requires you understand these 2 things objectively so that they can be built not for the founder, but for the greater market need. 

A product requirement document is often built at this stage to define what, exactly, is needed to define success. This works to mitigate scope creep throughout the design process.

Ideation (or idea formation) is the creative process of coming up with of potential ideas and solutions to the problems. There are many ways to go through this process, but generally, the outcome is a set of potential solutions to the problem or problems presented. The solutions can address a specific problem or all the problems. The chosen design is often some combination of multiple ideas. 

What Determines the Cost of Research and Ideation?

It is very difficult to narrow down Research and Ideation as it is highly variable for different products. A few items that affect this range are:

  • complexity of problem and solution
  • background knowledge on the subject area
  • what level of detail you are looking for

The Cost of Industrial Design

[Estimate: $2,500 – $10,000]

Industrial Design addresses how the product will look and feel in the product-human interaction, which determines who this product will sell to on the market. 

Industrial Design considers every aspect of the product from appearance to functionality with the goal of creating a design that resonates with the customer and is intuitive to use. If you have ever picked up a product and it simply “made sense,” without reading the instructions, that is good industrial design.

This work is front heavy with sketching and modeling the product concept – “bringing the concept to life.” However, industrial design is important throughout the whole development process to ensure the design does not change or deviate heavily from the original solution. This is often a challenge during the later stages of development as the initial design must adapt to the functionality, reliability, and manufacturability of the engineering and production stages.

What Determines the Cost of Industrial Design?

This depends on how important design is for your product – many products will focus on function, while others will look to distinguish themselves through market positioning. Sometimes, you can adopt an existing product design that works just fine, but for novel products, this is often not the case. Considerations for this cost will include:

  • the importance and value you put on the industrial design
  • complexity of product
  • number of use cases you are considering for the product
  • whether designers and founder align on design and vision

The Cost of Technical Design

[Estimate: $15,000 – $30,000]

Technical design breaks down the ideas in the industrial design stage into feasible mechanical, electronic, and software systems. These systems are created using low volume, prototype-style design tools as a proof of concept. These designs are then iterated on to solve subsequent design challenges.

The purpose of this step is to make sure the functionality (or the aesthetic) of a product concept is feasible. 

The technical design step happens in cycles with prototyping and testing. Systems are designed, prototyped, and tested. These cycles are repeated to address and overcome design challenges as well as roadblocks that come up throughout the design process.

Technical Design Cost Factors

Depending on the nature of the product, this stage can be extensive or relatively short. Complex projects will require many design iterations, while some products may be purely mechanical and can completely skip the electrical and firmware/software side of things.

It is difficult to estimate the time and cost associated with this stage and it is iterative and new challenges will often arise throughout the design process.

The Cost of Prototyping

[Estimate: $5,000 – $10,000]

Prototyping is about building a design so it can be tested. 

Early on, this happens as part of the technical design cycle (design, prototype, test) where you are able to validate feasibility and address big risks. Later on, this happens as part of the engineering design cycle (engineer, prototype, test) where you validate engineering analysis, reliability concerns, and other more nuanced aspects of the design.

With the emergency of additive manufacturing (mainly 3d printers), prototyping has moved into earlier and earlier stages of the product development process, getting cheaper and cheaper. Learn more in our article, Prototyping in Product Development Today.

Factors Affecting Prototyping Costs

Prototyping starts at the early stages and ends in the late stages of the development process. It can be very cheap and quick for low fidelity functional prototypes and very expensive for high fidelity functional and aesthetic prototypes.

In general costs are also affected by

  • Complexity of the prototype (number of parts, tolerances, mechanical integrity, etc.)
  • Fidelity of the prototype
  • Method of manufacture, materials, etc.

The Cost of Testing

[Estimate: $5,000 – $10,000]

Testing happens throughout the product development process. It happens in conjunction with prototyping as part of the design iterations. 

Testing allows the design team to gather feedback on your designs. It helps the team to identify potential issues or validate product decisions. Testing also allows you to de-risk the product launch: by testing throughout the development of the product, the design team has constant feedback on what works and what doesn’t. 

Product requirements should be clearly defined at this stage so that a prototype may be effectively evaluated on whether its performance is acceptable or not. Learn more in our article, Your Complete Guide to Product Testing.

Factors Affecting Testing Costs

Product testing costs vary depending on the product concept being tested:

  • Riskier projects may require more testing and iterations to improve confidence and reduce risk
  • If multiple product concepts are to be pursued, this will mean testing multiple concepts in parallel
  • The less uncertainty you are willing to put up within the product testing outcomes, the more thorough your testing needs to be and the more it will cost
  • Specific tests will require specific equipment

The Cost of Engineering

[Estimate: $25,000 – $50,000]

As the product goes through more and more detailed testing and refinements, engineering analysis is done to prepare for reliability, production, and regulatory requirements.  Mechanical, electrical, software and firmware systems are optimized for cost, durability, efficiency, and other product requirements.

The focus at this stage is on getting the product design ready for mass production. 

The product design is engineered to meet the initial specifications. Design requirements are reviewed, and analysis performed. Testing is carried out to validate calculations and ensure certification testing will succeed.

A lot of finer details are taken care of at this stage such as creating the quality control requirements, building the instruction manuals, and setting up for certification.

Cost Factors Affecting Product Engineering

  • Number of parts and assemblies
  • Safety devices, medical devices, 
  • High intensity environmental conditions
  • Electrical and firmware/software systems
  • External device integration
  • Rare or complex materials and manufacturing processes
  • High performance equipment
  • Products requiring electrical hardware and software/firmware integration may cost more to create than the simpler ones

The Cost of Certification

[Estimate: $5,000 – $10,000]

Once the product prototype passes through internal testing to ensure that it is safe, reliable, and can meet its desired product specifications, it then needs to go through 3rd party product testing for certification, before it can proceed to mass production.

Product certification cost and timeframe is based on which certifications you choose to get and where you choose to get them.

Product certification is the process by which your product is tested to meet regulatory standards in a specific market or industry. For example, if you were selling a medical device, a safety device, or a wireless device, you would need to certify your product before selling it to consumers.

Types of product certifications can include:

  • FCC certification, for all electrical products sold in the United States, although this certification is significantly more expensive for wireless products.
  • UL certification or CSA certification, for any electrical product sold in the United States and/or Canada that plugs into an electrical outlet.
  • CE certification, for most electronics sold in the European Union. This certification is like the FCC and UL certifications required in the United States.
  • RoHS certification ensures that the product is free of lead and is required for products sold in the European Union or California.

Learn more about what certifications you need for your product at our blog: What Certifications are Needed for My product.

The Cost of Factory Sourcing and Set-up

[Estimate: $2,500 – $50,000]

Setting up for mass production can be a significant expense when developing a new product. This stage includes finding and qualifying the best manufacturing partner(s) for your product. Then, negotiating contracts (costs, timelines, quality control procedures, etc.)  and setting up the production tooling.

After the final engineering design is complete, the final prototype (sometimes called the Golden Prototype) for production is prepared. The final drawing packages as well as this golden prototype will be used to set up production tooling and run t0, t1, and t2 samples. These samples are the first units created by the mass production tooling and allow you to refine how the end product will turn out. 

Factors Affecting the Cost of Factory Sourcing and Set-up

There’s a lot that can define the cost of this step. 

  • The manufacturing process used (plastic molds are often the big cost at this stage)
  • The complexity of your product and whether you will need to coordinate multiple factories or just one
  • How specific you are with cost
  • The production run quantities you will be making (and minimum order quantities)
  • If the factory has made a similar product or if they have similar capabilities (vs making tooling from scratch)
  • Manufacturing process used (is it manual, highly automated, how long it takes, etc.)
  • Availability of materials 

Learn more in our related articles, A Beginner’s Guide to Incoterms and The Price of Mass Producing Plastic Products.

The Cost of Manufacturing Quality Control

[Estimate: 0.5-2% of production cost. Often about $500 – $1,000 on a first order.]

Ensuring the quality of the product is absolutely essential. Quality control happens throughout the manufacturing process at the component level, the assembly level, and the final package level. 

In the engineering stage, you will have identified a number of likely issues that need to be monitored in a quality defect document. You will work with the factory to roll out quality control checks throughout production line; however, it is important to also have a third party quality control partner to ensure this is done properly.

By checking often and throughout the process, you are able to find and address issues early on, saving considerable time and money.

Cost Factors Affecting Manufacturing QA

The cost of manufacturing quality control is affected by the scale of your order and the acceptable quality limit (AQL) you’ve chosen for your product. Learn more about acceptable quality limits at this article by QualityInspection.org.

Bonus: The Cost of Shipping

Although this article is focused on the product development costs, we will leave this here as an honorable mention as it is a significant cost. (Please note, this list also excludes the cost of the factory production order itself).

[Estimate: $1,500 – $25,000 (pre-pandemic to mid-pandemic for a 40’ container – China to North America)]

After production, it is important to ensure that your product gets to its destination safely.  There are different ways to transport your product – if manufacturing in China, the two options are sea freight or air freight. Although this is the major differentiator, this stage refers to transportation from factory to fulfillment center. 

This includes trucking from factory to port, export management, import management, trucking from port to train station, train transport, and trucking from train to fulfillment center. This is commonly referred to logistics, because there are many moving parts that need to be coordinated to execute this efficiently.

Factors Affecting the Costs of Shipping and Logistics

Air freight is a good option for small, low weight, high value products or when time is critical, but we will focus on sea freight as that is the more common path. The quantity of your order will determine the size and number of shipping containers you will use, but there are many nuances to this cost. 

  • The size of your package determines how many units will fit in a container and the corresponding cost/unit.
  • Location of factory with respect to the port
  • Palletizing your product (fit less product, pay for pallets, pay for forklift)
  • Not palletizing your product (fit more product, pay more for manual loading and unloading, unloading delays and storage)
  • Whether your shipping route is well travelled (lower cost, higher chance of delays)
  • The type of product you are shipping (export and import duties)
  • Additional shipping services like tracking and insurance

Estimate the cost of your freight with this FreightOS calculator. 

Estimate the cost of import duties with this FreightOS calculator.

When diving deep, don’t trust the calculator, look for yourself using this US government database. 

Conclusion

As you now know, product development is a complex process that is different for every project.

There are many steps and costs associated with the product development process. A ball park range for consumer products made for mass manufacture is $75,000 – $100,000 for professional, relatively simple product designs, plus extra for production and logistics.

However, these projects can quickly run over budget because from design issues, scope creep, and improper planning. Product development requires a great deal of communication and timeline management which is why full service product design firms are so convenient.

If you want to know more about product development and how to bring your product from concept to market, learn more about The Ventrify Design Process Here or check out our other insights.

About the Author

Ventrify is a product design and manufacturing firm that helps entrepreneurs bring product ideas from concept to market. We take in fledgling ideas and bring them through our iterative design process to create products our clients can be proud of. Then, we work with manufacturing facilities worldwide to bring our clients the highest quality products at competitive prices.

If you have questions about estimating the cost of your product development or need help, reach out to us through our Website, Facebook, or LinkedIn.

Everything About Funding: How to Finance Your Product Idea

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Perhaps the most common hurdle that aspiring entrepreneurs and inventors have to overcome is funding.

After you’ve come up with a stellar idea that solves a real-world problem, you’ve got to find a way to pay for the product development and design process—as well as everything that comes after. And it’s not easy. We’ve seen firsthand how hard it is to get your product idea off the ground.

But, with a bit of research and hard work, you can get funding for your product. And in today’s day and age, you have more options than ever before.

In today’s article, we’re going to cover everything you need to know about funding, the 9 different types of funding, and how you can leverage it to bring your product idea to life.

Before You Look for Funding…

Oftentimes, first-time entrepreneurs jump the gun. What you might think is the next best product idea to be featured on a show like Shark Tank—might not be.

And so, before you spend too much time on your product idea, you need to make sure it’s worth pursuing. If you rush ahead you could make the same mistake the infamous Fyre Festival made back in 2017.

For those of you who don’t know, the Fyre Festival, which was planned and executed by Billy MacFarland, bombed catastrophically just a few years ago. And with its downfall went $3 million dollars of investment opportunities. MacFarland also went on to serve time in prison for committing fraud, receiving several lawsuits after the fact.

While that’s certainly the worst—and most unlikely—scenario, there are steps you should take to give your idea the best outcome possible.

Before you invest too much time and effort in your product idea, you need to make sure it’s viable. Because you’re not just creating a product—you’re starting a small business. And when you have a business-focused mindset, you’ll make smarter decisions in the short and long term.

Here are the 4 steps you should do first:

1. Research the market

Before you get too far, you need to see if there is a need for your product. This is one of the key steps in Product Validation. By finding a need or a gap in the market that your product can fill, you’re ensuring your idea is not just viable—but also profitable.

And if you’re going to convince someone to provide you with funding, you need to prove to them that you’ll be able to make that money back. Otherwise, they have no reason to invest in your idea at all.

Now, we’re not saying you need to prove you can sell your product to everyone on the planet. Instead, you need to prove there is a niche market out there that will purchase your product. If you’re trying to sell the next best razor and compete with massive companies like Gillette—you’re not going to get very far.

However, if you’re going to sell a subscription service to busy workers as Dollar Shave Club did, then you have a much smaller and highly-targeted niche. That makes it easier to stand out and own a small segment of the market.

Brian Chesky, one of the founders of Airbnb, phrased it best, saying to “build something 100 people love, not something 1 million people kind of like.”

2. Create a business plan

According to research from the Journal of Small Business Management, 71% of fast-growing companies have a business plan for their company.

When you clearly outline the next steps for your business, you’re going to be more prepared than other entrepreneurs out there. You’ll have a more defined structure, be able to clearly define your goals and account for future obstacles. Plus, it allows you to track your progress as you scale your business.

And most importantly—you can more easily secure external finances or loans.

When you can outline your financial projections and show clear marketing strategies, not only will you feel more organized and prepared, others will too.

3. Gather feedback about your product

After you’ve done some preliminary research and drafted a solid business plan, you can start actually designing the product. This is the product design and development phase. And let’s be real, it’s the most fun part.

Here you get to put the pieces together—literally—to create a prototype. After several versions, you should end up with a Minimum Viable Product (MVP). This is still part of the early stage of the final product, but it’s useful in helping you get feedback.

At this point, you want to send the product to some early beta testers and critique. Most likely, this will consist of yourself and close family or friends. However, it’s also a good idea to find potential customers in your target market to test it out as well. Their feedback is the key to once again confirming your product is something consumers will want and use.

4. Hire some professional help

Finally, the last step you need to take is to get help from experts who have done it before. Whether you’re hiring a business consultant or a product design firm, it’s a good idea to reach out for professional advice.

Not only will they help you make sure you are following all necessary regulations, like patent application requirements or getting product certification, they will also help you with things like packaging design and prototyping.

After you’ve followed these 4 steps, you’re ready to go out there and get funding for your product idea.

How To Get Funding for a New Product Idea

It’s the most common question we get from our clients—and we understand why. One of the number one reasons small businesses fail is due to a lack of funding or working capital, according to Investopedia.

And when it comes to finding someone who will invest in your product idea, that’s harder than you might expect—especially if it’s your first time launching a product.

Why Getting Funding is Difficult for Startups:

When it comes to investing, there are a lot more people out there pitching ideas to VC firms than there are investors willing to take on the risk of a startup. And that’s not likely to change anytime soon.

In fact, according to a survey from Gallup, 77% of founders cited personal savings as their main source of funding for their startup. And an article from Entrepreneur reported that only 0.05% of startups actually manage to raise any venture capital. After reading those statistics, it’s easy to be disheartened.

On a positive note, there are a lot more ways to get your small business off the ground than there were in the past. And, if you play your cards right—your product could take off.

What Are the Different Types of Funding?

There’s no one “right way” to fund a business, but some methods are easier than others. So, you need to evaluate all the options available and find one that is best for you. While you can rely on one type on rare occasions, most businesses acquire funding from a variety of different sources. The type of funding you go for will also depend on what stage you are in your business because some are only relevant for startups.

Thankfully, when it comes to acquiring funding or working capital, you have a lot more options today than you might have had 10 years ago.

Here are 9 different ways to fund your product idea:

Funding MethodHow It Works
Personal InvestmentAlso called “bootstrapping,” this is money out of your own pocket you invest.
Patient CapitalPatient capital or “love money” is loaned to you by a friend or family member.
CrowdfundingThis involves using online platforms that help you raise small sums of money from a large number of people interested in your future finished product.
Pitching CompetitionsThese are competitions that give you a chance at funding your product idea as well as feedback on your pitch.
Bank LoansThis is money from a business loan provided by a bank. A bank won’t require shares in your business, but you’ll have to follow a repayment plan.
Startup Accelerators & IncubatorsThese organizations offer a full range of resources to new startups, including office space, mentorship, and connections to potential investors.
Angel InvestorsAn “angel” is a single wealthy individual, often a retired executive, who invests in exchange for a share in your business.
Venture CapitalVenture capital firms are companies that actively look for startups to invest in, and they will often invest greater amounts than angel investors.
Government GrantsThis refers to types of government funding, which will vary depending on your region.

Let’s explore each of these a little bit further.

  1. Personal Investment

Funding it yourself is a choice that many first-time business owners make when starting their foray into entrepreneurship. The advantage is that you’ll be the sole owner of your enterprise, wielding full control.

However, an obvious downside is that this is all your money we’re talking about. Dipping into your personal savings does come with its own risks. That may have been money for your kid’s college education or for the mortgage on your house. So, if you go this route make sure you’re still leaving yourself with some savings and not going into major debt.

Take Yvon Chouinard, the founder of Patagonia, as a shining example. In the 1970s, he simply started selling a variety of pitons (small metal spikes used by mountain climbers). Eventually, he would go on to sell clothing as well—and Patagonia was born and funded solely by its annual profits.

  1. Patient Capital

Colloquially, you may have heard of this referred to as “love money.” Patient capital is loaned to you by a friend, parent, spouse, or other family members, and it is quite common for first-time business owners.

However, keep in mind that this will often provide only a small source of needed funding. Additionally, getting a loan from relatives changes your dynamic and you now have a business relationship that needs to be navigated with care. Often, the person providing funds is given a share in the company or repaid later.

When done correctly, patient capital can be a great help in getting your business off the ground. Jeff Bezos famously started Amazon with $300,000 from his parents—and we both know how well that worked out.

  1. Bank Loans

While the first two funding methods are very common, not everyone has thousands of dollars in their savings accounts or relatives willing to invest in your idea. Because of this, a large number of entrepreneurs turn to banks for assistance.

Bank loans are the most common type of business loan—and you can approach different banks to see which one meets your needs. A major obstacle with securing a bank loan is that banks may want to see historical evidence that you can run a lucrative business. Excellent credit is also expected.

On the positive side, you only have to worry about making the repayments, and you are still in full control of how you run your own business.

  1. Crowdfunding

While some of the more traditional funding options involve loans, there are more recent options like crowdfunding. When the first crowdfunding platform, ArtistShare, launched in 2001, it set off a huge trend for funding projects digitally.

Crowdfunding involves raising funds by collecting a small amount of money from a large number of individuals, usually through an online platform. Today, there are plenty of options like Kickstarter, GoFundMe, and IndieGoGo.

Some of the key benefits of crowdfunding are that you aren’t required to give any of the finances back or give up any control in your business. However, when you use a crowdfunding platform, the individuals contributing are doing so under the pretense that they will receive a finished version of your product. If you don’t follow through, then you could face lawsuits and a huge media backlash—like the “Coolest Cooler” failure back in 2014.

As you can imagine, crowdfunding is hard. Instead of trying to convince a handful of people to support you—you need to convince thousands. Thankfully, there are full-service marketing agencies available out there that can help.

One option we often recommend to our clients is Launchboom; they’re one of the leading crowdfunding companies out there, specializing in getting funding even on the first day of your campaign.

  1. Pitching Competitions

A more uncommon way to fund your product idea is by entering a pitching competition. This can be anything from a TV show, like SharkTank, to a local competition in your city. Sometimes, companies even host their own pitching competitions like Cards Against Humanity did with their web show, Tabletop Deathmatch.

Typically, the investors will ask for a stake in the company, but in some competitions, the winners get the prize money and they don’t have to repay it. However, there are usually entry fees to compete in these to pay for the cost of the event.

Similar to VC funding, you need an epic product idea to impress the judges. If you think you have a good chance, then it’s a no-brainer. But even if you don’t, entering the competition can still provide you with other benefits. When you submit your idea, you will get valuable feedback on your product which is useful even if you lose.

  1. Incubators & Accelerators 

A startup incubator helps startups by providing early funding and they don’t typically seek any equity. Their goal is to help you get to what’s called the MVP stage so that you can then apply to a startup accelerator program.

After you’ve got a product in hand, you can apply to a business accelerator. These organizations will provide office space, management training, and a range of other services to startups. However, unlike incubators, accelerators do usually ask for equity in exchange for their help and funding.

In both cases, incubators and accelerators support a business through its early stages and provide a lot of mentorship and support. Another benefit is that they can connect you with other funding sources, such as VC firms, angel investors, and banks.

The downside is that you can’t rely on them in the long term. They’re designed to help businesses in the startup phase specifically. And while they provide you with ample opportunities, they do often still require a share in the company. Because they have so many resources, they tend to be quite competitive and difficult to get into as well.

  1. Angel Investors

Angel investment describes when a wealthy or high-net-worth individual decides to fund your business. Typically they will do so under a few conditions—namely a share in your company and a seat on the board of directors. You may also hear them referred to as a private investor, seed investor or angel funder.

While you will no longer be 100% in charge of everything, an upside here is that your angel investor can bring relevant business experience that goes a long way in aiding your success. And as a first-time entrepreneur—that business guidance gives you a huge leg up.

That being said, in most cases angel investors are usually connected to the startup in some way, like through friends or family. However, you can also find them through angel-specific organizations and websites. Generally, they keep a low profile and will need to be sought out.

  1. Venture Capital

In addition to individual investors, some corporations also exist just to invest in startups. These venture capital firms want to fund businesses that have high growth potential, and they usually go for those in sectors such as biotech and IT.

If you can present them with a killer business plan and convince them it will pay off, then you have a better chance of getting VC funding. Plus, a venture capitalist can also provide additional expertise and resources.

The downside is that you will have to give up some control of your business. Since they’re fully invested in making sure your company grows and turns a profit, the VC firm will have strong opinions on what’s best. Facebook is one famous example of a company that benefited from VC funding, and it was partially due to the fact the company had a valuation of $100 million (USD) in 2005.

  1. Government Grants 

Finally, the last way to fund your business idea is with grants offered by your government. A grant is a contribution that is not expected to be repaid, but you will have to follow certain terms as to how the money is to be utilized. For example, a business that is developing technology that helps deaf people could be allocated money for research and equipment.

In the United States, the government only awards grants to nonprofits and educational institutions. That being said, they do still give out loans to businesses. Many other countries also provide business grants, so make sure to research what’s available in your country.

Key Takeaways

At the end of the day, it’s important to remember you’re not just creating a product—you’re starting a business. And with that comes a lot of challenges. From creating a viable prototype to securing funding, there are a lot of steps involved when creating a product that succeeds.

Whether you’re a first-time entrepreneur or an inventor with years of experience, it’s still overwhelming to do it by yourself. Luckily, there are ways to make it easier and find the support you need. One way to make the process easier is to work with a product design firm that’s done it before—and can help you get through the hardest parts.

We’ve helped our clients bring their product ideas to life, and we can help you do the same. Reach out today and we’ll help you with everything from product validation to prototyping.

About the Author:

Ventrify is a product design and manufacturing firm that helps entrepreneurs bring product ideas from concept to market. We take in fledgling ideas and bring them through our iterative design process to create products our clients can be proud of. Then, we work with manufacturing facilities worldwide to bring our clients the highest quality products at competitive prices.

If you have questions about using prototypes in your product development journey or need help, reach out to us through our Website, Facebook, or LinkedIn.

Article by Victoria Fraser

A Beginner’s Guide to Incoterms

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When you think of product design, shipping might be the last thing on your mind. However, it’s still a crucial part of the process and can affect your profits if done poorly. One aspect of shipping and logistics is incoterms.

Incoterms might seem confusing, but they’re actually not all that complicated. If you’re shipping a product from one location to another, then it’s crucial you understand what they are and how they work.

When it comes to freight shipping, the history is fascinating. From horses pulling carts to container ships transporting literally—tonnes—of goods, we’ve come a long way. Now, the interconnectedness of our supply chains allows us to buy all kinds of products and goods, like pineapples from Hawaii and saffron from Spain.

Logistics management is an entire field of study in itself, and many people dedicate themselves to understanding all the different stages of transportation. While we don’t expect you to be a supply chain manager, you can still benefit from understanding the overview of Incoterms when designing your products.

Fun fact: The first shipping container was only invented in 1956 by American entrepreneur Malcom McLean.

A key part of international shipping is the incoterms, which can be intimidating to a lot of people. Thankfully, we’re diving deep into the topic in today’s guide on incoterms.

What are Incoterms?

In the world of shipping and logistics, Incoterms is an abbreviation of the words: “International Commercial Terms.” These are the terms agreed to by the buyer and seller, which reduces confusion in the shipping process.

They are written as three-letter abbreviated trade terms and were formally established by the International Chamber of Commerce (ICC). As a result, the logistics of international trade are simplified since they clearly communicate different aspects of cross-border trade.

In general, there are a few things major areas that incoterms address:

  • Point of delivery: This defines the point of change of hands from seller to buyer.
  • Transportation costs: This defines who pays for whichever transportation is required.
  • Export and import formalities: This defines which party arranges for import and export formalities.
  • Insurance cost: This defines who takes charge of the insurance cost.

What are the different types of Incoterms?

There are 11 main terms to know when it comes to Incoterms, but we’ll break them down for you. Use these to help the buyers and sellers communicate the provisions of a contract clearly.

Here is a quick table with the different terms and what they entail:

CodeAcronymWhat’s Involved
EXWEx WorksThe seller ensures the goods are at the seller’s premises or another specific location where the buyer loads and clears the goods for export.
FCAFree CarrierThe seller delivers goods either to the carrier, a specific person at the seller’s premises, or another specific location. Any risks passed onto the buyer must be clearly stated.
FASFree Alongside ShipThe seller delivers goods alongside a vessel chosen by the buyer. The responsibility lies with buyers after goods are alongside the vessel.
FOBFree Onboard VesselWhen the seller delivers goods on-board a vessel chosen by buyers. The responsibility lies with the buyer once goods are on the vessel.
CFRCost & FreightLike FOB, except that the seller must pay for the costs and freight to deliver goods to their destination.
CIFCost, Insurance, & FreightSimilar to CFR, except the seller arranges insurance cover against the buyer’s risk of loss or damage.
CPTCarriage Paid ToThe seller must arrange the transportation of the goods to a specific destination, but doesn’t insure them.
CIPCarriage & Insurance Paid ToLike CPT, but the seller is also in charge of insuring the goods.
DAPDelivered At PlaceThe seller delivers the goods to a specific destination, after the goods have been unloaded. The seller has full control of up until the named place of destination.
DPUDelivered At Place UnloadedThe seller delivers the goods ready for unloading at the specific destination. The seller has full control up to the named place of destination.
DDPDelivered Duty PaidThe seller is in charge of all costs and risks relating to the delivery of goods to the buyer’s named place of destination, including clearing goods for export and import, paying duties and any customs formalities.

This list is also organized from the most obligation to the seller (ECW) to the least obligation to the seller (DDP). When choosing, you’ll need to carefully weigh the pros and cons of each one.

How do I choose the right Incoterms?

With so many choices, it’s difficult to know what to choose. While there are a lot of factors to help you decide, here are some general tips to help you.

One common practice in the industry is that you should “buy” FOB and “sell” CIF. That is because there are different benefits and costs with each pricing term, especially as they relate to an importer or exporter.

All that aside, FOB (Free on Board) is, generally, the most popular Incoterm since it provides equal benefits and risks to the buyer and seller.

If you have more experience importing goods and want full control over the process, then EXW (Ex Works) may be the way you decide to go. It does, however, mean that you take on the most risk and responsibility, so we would advise against that if you’re still learning the ropes.

When choosing the right incoterms, you want to get it right. Shipments can face all sorts of problems without the correct incoterm so it’s crucial to think carefully to decide which one is appropriate.

For example, logistics costs could increase, affecting your profits later on. Alternatively, the buyer or seller may not be able to comply with the incoterm causing issues when you go to pick up your goods and they never arrive.

Summary

Not every business uses the same incoterm, so you have to choose based on what’s best for you. Hopefully, this guide expanded your knowledge and boosted your confidence when it comes to understanding incoterms.

At the end of the day, we recommend working with professionals who know what they’re doing so your logistics and shipping processes run smoothly. It might not be the first stage of product development, but it’s an important one!

If you found this article helpful, don’t forget to share it and subscribe to our newsletter for more useful content like this.

About the Author:

Ventrify is a product design and manufacturing firm that helps entrepreneurs bring product ideas from concept to market. We take in fledgling ideas and bring them through our iterative design process to create products our clients can be proud of. Then, we work with manufacturing facilities worldwide to bring our clients the highest quality products at competitive prices.

If you have questions about using prototypes in your product development journey or need help, reach out to us through our Website, Facebook, or LinkedIn.

Article by Victoria Fraser

How to Design Packaging for Your Product that Stands Out

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An often overlooked step in product design is packaging; yet it’s crucial. In the same way we all judge a book by its cover before reading it, we also judge a product by its packaging before using it.

Many inventors or entrepreneurs start with the design of a product itself, but the packaging still needs to be enticing to your customers. And so today we’ll dive into the psychology of packaging design. We will also cover some classic examples to take inspiration from in recent years and decades ago.

There is a lot more to consider than just cardboard and tape.

Different Elements of Packaging Design 

When it comes to making the packaging design decisions for your product, there is an overwhelming number of things to consider—colour, logo, font, material, and so on. While it would be nice if there was a one-size-fits-all approach, there, unfortunately, is not.

Let’s take a quick look at some of the different factors to consider.

Colour 

Colour is a crucial part of packaging design. Many researchers and marketers have studied this for decades. In fact, according to one study the four most eye-catching colours that pique our interest subconsciously are red, yellow, green, and pink.

Some other ways in which colour affects us is how black is considered more expensive and browns are considered more natural.

Famed German writer, Johann Wolfgang von Goethe, even published his book on the Theory of Colour in 1810. In it, he talks about how colours can invoke certain emotions in our bodies. By appealing to people emotionally, brands can influence their customers’ purchasing decisions directly. It’s also a great way to create brand recognition. We can all recognize a can of red Coca Cola from far away.

When thinking about colour, it’s overwhelming. Try to reflect on your company values and who you want to attract. Targeting your customer avatar is crucial when making these decisions.

Visual Design

Products that look more aesthetically pleasing are rated as easier to use than their less attractive counterparts. This phenomenon has been noted in design since the first study discovered it in 1996.

While this is often in regards to things like websites or user interfaces, it is still something to keep in mind when designing your packaging. People don’t want to be confused. Minimalism was even one of the top trends in 2020 for product design. Knowing this, it’s important your packaging looks appealing and is not overwhelming visually.

Sustainability

More and more companies are incorporating more sustainable business practices—especially in packaging design. In fact, 66% of people will pay more if a product is more environmentally friendly. Millennials are also a key reason that brands want to embrace more sustainability.

As a result, some companies have created clever packaging solutions for businesses to choose from instead of traditional plastic packaging. Take the company Bloomin as an example. They’ve designed packaging that is biodegradable and plants wildflowers where it is discarded.

Now it’s important to be genuine in your marketing if you do this as some companies have seen this backfire and been accused of “greenwashing.”

“Greenwashing is used to describe the practice of companies launching adverts, campaigns, products etc. under the pretense that they are environmentally beneficial. But they’re often in contradiction to their environmental and sustainability record in general.”

—Ethical Consumer

Authenticity is crucial in the modern era we live in, so make sure your brand is intentional with its decisions and accurate, or else it will backfire. Not all press is good press after all.

Copywriting 

Not only is the logo important, the writing (or copy) on your packaging is also crucial. If your writing is snazzy, then often you’ll get free advertising through amused customers who share it on social media. Using humour is just one example of a great way to stand out among the other brands.

The writing on the packaging is also a direct connection with your customer. It’s the perfect palace to convey your voice and showcase your brand identity. We all remember those sticks of pink Dubble Bubble gum that had comics tucked inside right? Maybe you didn’t even like the gum, but you probably liked the comic.

Of course, your writing should always be clear, but don’t be afraid to add personality if it suits your audience. In the case of the comics in the gum, it was a genius way to connect to kids at a candy store while hiding a special message under the wrapper.

Practicality

Yet another aspect to consider is how the packaging might improve the use of your products as well. Sometimes, the packaging itself can become the product!

One you might not have noticed is that the Classico pasta sauce jars have measurements on the side of them for you to use while cooking. They also launched a social media campaign encouraging people to reuse the jars instead of simply recycling them.

And this isn’t a new idea, brands have been doing things like this for decades.

In the 1930s, flour companies learned that parents were using the fabric from their packaging to sew clothing for their children. Brands responded by packaging their products with more colourful and fun patterns as a result.

Doing something clever like this is a great way to stand out among the other brands.

Certifications

A final key aspect to include on your packaging is any certifications for your product. Depending on the products and industry, there are a variety of markings or stamps that would be required on your packaging.

Without these, your product can’t legally be sold in some countries. For example, in the U.S.,  you need to comply with The Fair Packaging and Labeling Act (FPLA) and Uniform Packaging and Labeling Regulation (UPLR). Imported goods also have to follow certain packaging requirements like Title 19.

It might seem overwhelming, but thankfully there are packaging specialists who make sure these different requirements met.

Here are the most important things often required:

  • Product Identity Declaration: This just explains what the product is and how it functions.
  • Net Quantity Declaration: This covers the size of the production in weight if it’s liquid or solid or in a numerical quantity.
  • Dealer’s Name and Principal Place of Business: As in most places, it’s required that the location the product was manufactured is listed.

When it comes to Canada, there are also a few unique packaging requirements. Since the official languages are English and French, all products must have bilingual packaging to be sold across the country.

Summary

While this is just a handful of different elements to consider, there are plenty more ways to create standout packaging that appeals to your customers. At the end of the day, we recommend thinking strategically about the demographics of your customer to make sure it resonates with them.

Not every brand will have the same packaging solutions (and if they did we would all be disappointed!) Hopefully, this article opened your eyes to the ways to freshen up the look of your products once they hit the shelf.

If you found this article helpful, don’t forget to share it and follow us on social media for more useful content like this.

About the Author

Ventrify is a product design and manufacturing firm that helps entrepreneurs bring product ideas from concept to market. We take in fledgling ideas and bring them through our iterative design process to create products our clients can be proud of. Then, we work with manufacturing facilities worldwide to bring our clients the highest quality products at competitive prices.

If you have questions about using prototypes in your product development journey or need help, reach out to us through our Website, Facebook, or LinkedIn.

Article by Victoria Fraser

5 Common Mistakes in Product Development

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We’ve all heard – many start-ups fail, let alone hardware start-ups, which are harder yet. So why even try? Well, if you are addressing a real problem – someone has to do it. Well, that and taking a product to market can be extremely lucrative.

So why do people give generic advice like “passion will get you through the hard times” and “persevere in the face of hardship” – well, it’s because tangible advice is long-winded, boring, and often relegated to libraries and university courses.

But today, we will talk about some tangible and focused advice for product development. Let us look at five common hardware product development mistakes, along with strategies that could help you in the development process.

1.     Unforeseen Product Development Costs – Sometimes, it so happens that despite having a good projection plan with a well-defined scope and set of requirements, product design & engineering teams face deviations, roadblocks, or unforeseen challenges that lead to additional development expenses. This could result from decisions made along the development process so far or design issues that were overlooked.

These are easier (read: cheaper) to deal with when they arise earlier in the development cycle; however, early changes can lead to significant deviations in the end product – make sure to check how this affects your original scope and don’t lose track of your target. However, don’t be too stringent with your initial plan – things change. Dealing with challenges effectively early on can mean some added costs but often far less than putting off issues or leaning on a band aid solution until later in the process.

Having a strong product development team is a blessing as they will be able to forecast unique and uncommon issues – and plan/budget for them.

2.     Over Designing a Product – Having an unclear end-goal for your product can mean either too many features or an ever-improving design. Yes, your product could probably be better – most, if not all, products can be.

Don’t let this happen to you – create a clear set of requirements and scope. With a clear target, you will know when your product is ready for launch. There will always be time for future versions; if it is a good product, customers will expect a version 2.0!

3.     Missing Deadlines – Failure to stay on your project schedule can happen for many different reasons: underestimating project complexity (overestimating the team), over-ambitious timelines, scope changes, unexpected results (analysis, testing, etc.), and a slew of uncontrollable reasons (Covid-19 being a perfect example).

An experienced development team will include time for review and iterations in the project plan. Hurdles in the product development process are to be expected but should not catch you off-guard.

4.     Not Using Feedback Effectively – This is a significant topic and has been discussed from many perspectives, including minimum viable product (MVP), iterating quickly, lean product development, fail fast and often fail, launching early, having an embarrassing MVP, etc. Yes – your idea might be great, but you need to make data-driven decisions in transforming your idea into a market-ready solution.

Put your product in the hands of real people (ideally people you don’t know, so they don’t give you a biased response) and get their feedback. The feedback is your data; use it to make your product better.

5.     Trying to Do Everything Yourself – Consider how much learning and time it takes for a team to be confident at what they do. Is learning something new the best use of their time? This happens to founders and entrepreneurs that are hyper focused on getting things done. They are often effective, but at what price – could it have been done faster/better/cheaper by someone else? Whether it is someone on your team, a freelancer, or a design firm, it is important to be realistic. Just because you can, does not mean you should.

Keep in Mind

There are many hurdles in the product development process – these are five common mistakes anyone taking a product to market should be aware of. Depending on the product, these challenges will change in significance and priority.

If you aren’t confident identifying and addressing these issues, reach out to someone that is.

About the Author

Ventrify is a product design and manufacturing firm that helps entrepreneurs bring product ideas from concept to market. We take in fledgling ideas and bring them through our iterative design process to create products our clients can be proud of. Then, we work with manufacturing facilities worldwide to bring our clients the highest quality products at competitive prices.

If you have questions or unsure about addressing these issues, reach out to us through our Website, Facebook, or LinkedIn.

Founder Mindset: Lean Startup VS Field of Dreams

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How Did You Get Here?

Whether you intentionally made the decision or simply had a great idea and now find yourself on the journey, starting a company is a big step.

You may be excited about the flexibility it will bring. Or answering to no one but yourself. There are many reasons why you should, or shouldn’t proceed, but the mentality you have going into this journey is critical.

Intro

There are many challenges to overcome, but today we are going to discuss the mindset – the mental framework you have – when setting out on this journey. We will look at 2 sides of a scale – The Lean Startup and The Field of Dreams. Depending on who you talk to, you are going to have very different answers on how to pursue your adventure. But first – what are they?

Field of Dreams

The Field of Dreams mentality says, “if you build it, they will come.” If you have an idea to solve a problem, there are other people out there experiencing this same problem and they are going to want your solution. Whether you are a programmer coming up with a genius piece of code, a tradesperson that has put together a game-changing prototype, or a researcher that has found ground-breaking formula – if you have a good product, there are people out there that will find you.

Why & Who

This approach is often taken on by the most innovative people – they believe in what they are doing and are consumed by their solution. It is often someone doing groundbreaking research or someone that is truly passionate about a solution. The Field of Dreams mentality helps these people leave their jobs, and pursue an amazing opportunity.

The logic behind this mentality makes sense, to a degree. If you have something interesting, people will naturally hear about it and be, well, interested. If you have the cure to cancer, the people will find you. If you have the solution to procrastination, you will be rich. In marketing, this refers to a product-focused market and simplified greatly, comes down to what is “interesting.” Does interesting mean it’s different? Does it mean it’s better?

Lean Startup

The Lean startup is another approach, and caters to a customer-focused market. The Lean Startup mentality says, our assumptions about our solution are often wrong. And the way to deal with this is to take an iterative, experiment-based approach to validate these ideas. Rather than focusing on the product, the lean startup methodology looks to test the market as quickly as possible.

Why & Who

This mentality is held by a lot of entrepreneurial minded individuals. Testing assumptions as a scientific hypothesis, they gather data, analyze, and make decisions based on the conclusions. This type of person is often seen as opportunistic, but often needs to recognize opportunities far before they are acknowledged by the early majority.

The logic behind this consumer-focused market makes sense as well. There are a lot of products/services out there, so for yours to succeed, it needs to fill a gap in the marketplace. This type of person claims that if you have the cure to cancer, people will not come to you “because you have discovered and created a fantastic product,” they will come to you because “they have cancer and no one else has the cure for cancer.”

So Which is Better?

This is a polarized argument, and the truth is people must understand the necessity for both sides. You need market pull regardless of how great your product is – but if your product is truly great, the people will come!

It comes down to the market you are servicing. With early stage markets that are still developing, the Field of Dreams approach makes sense. Think medications to terminal diseases: Chemotherapy has a mediocre chance of cancer mitigation but comes with a slew of terrible side effects on top of being extremely expensive – people still line up to do it.

What about over serviced or mature markets like T-shirt sales. If you make a T-shirt that is not unique and servicing a very specific need, it is extremely difficult to beat out the market leaders in price and quality.

Our Recommendation

Both approaches have their space, but with globalization making products and services available across larger geographical areas, we are moving towards a consumer-focused market. If consumers don’t like what is available locally, they’ll often find something online that is better suited to their needs. As markets mature, and the world becomes ever more connected, the Lean Startup methodology becomes more prevalent.

As such it is important to understand the market you are entering before you found your business.

About the Author

Ventrify is a product design and manufacture firm that helps entrepreneurs bring product ideas from concept to market. We take in fledgling ideas and bring them through our iterative design process to create products our clients can be proud of. Then, we work with manufacturing facilities across the world to bring our clients the highest quality products at competitive prices.

If you have questions about taking your product through the manufacture phase, connect with us through Facebook, LinkedIn, or our Website.