Product design plays an integral role in the success of any product launch. It determines how attractive, user-friendly, and functional a product is. As a result, companies invest significant resources into designing the best possible product.
But pinpointing the exact product design cost is not that simple, as it depends on multiple internal and external factors.
Aspects like competitive pressure, complexity, and regulatory requirements can all have an impact on the final expenditure, and that’s what we’re about to discuss.
Table of Contents
Internal Factors That Affect the Overall Product Design Cost
The product design process includes a lot of steps, so it’s no wonder product design costs range from being very inexpensive to astronomically high.
These are some of the internal factors that affect the price:
Complexity
The complexity of a product, be it digital or physical, affects its design cost significantly. For example, designing and manufacturing a complex physical product requires a greater investment of resources, time, and money than creating a basic one. The more intricate the product is, the higher its costs.
Complexity also dictates how much labor would be required for upkeep, quality assurance, and, if applicable, assembly. Furthermore, specialized testing may have to be used so that the final product meets customer expectations.
All of this contributes to the overall complexity of the product, making product design costlier when products are complicated in structure and function.
Materials
If the product is to be manufactured, which is something industrial design deals with, materials also come into the equation. Their volume and quality are the most important determining factors. However, if you’re sourcing the materials from abroad, there are also shipping and handling costs to be considered.
Ultimately, you should be aiming to balance cost savings while also ensuring that you won’t compromise product, which requires careful assessment.
Research & Development
Product design costs may also entail research and development (R&D), especially if the product is of technical nature. Moreover, extensive research is needed to understand customer needs and market trends, which may also up the tally.
- Broadly speaking, R&D costs include the cost of:
- Developing and testing new designs, materials, and components
- Prototyping and patenting
- Quality control
- Iteration
- Market and feasibility research
Quality Control
Quality control entails ensuring a product meets certain predefined standards regarding performance, appearance, reliability, and safety.
Quality control typically involves a range of processes, such as inspecting different elements of a product and testing their durability. This will result in additional expenses, such as buying equipment and employing skilled personnel to carry out the tasks necessary for quality control.
However, it’s a step you can’t afford to skip because it directly impacts sales and profitability. For example, if a product does not meet its quality standards, it could lead to customer dissatisfaction and higher return rates.
Labor
Labor costs account for a significant portion of the overall product design cost, as skilled labor that helps bring the initial design idea to fruition usually comes at a price.
These costs increase when more complex or customized designs require specialized skills. Talent and experience contribute to the expense, and rates vary depending on region, skill level, and complexity of work.
If you’re thinking of hiring in-house product designers, other labor-related expenses, like employee benefits, might quickly add up. Outsourcing is a great way to save companies money by acquiring cheaper labor, but we’ll get to that later.
External Factors That Affect the Overall Product Design Cost
Numerous external elements influence the overall product design cost, and it’s important to understand how each can impact your budget.
Market Research
As we mentioned with R&D, market research is an essential part of product design, but apart from its internal significance, it also qualifies as an external factor, e.g., focus groups. Market research allows companies to glean customer preferences and tailor their products accordingly.
The cost of market research includes hiring experts to conduct in-depth customer surveys on focus groups, interviews, and industry analysis, amongst other activities. There are also some costs related to purchasing data from third-party vendors and paying for software licenses if needed.
Fortunately, there are resources available to keep market research costs lower, such as leveraging internal customer databases or utilizing free survey platforms like SurveyMonkey.
By taking into account these factors early in product development stages, companies can avoid costly mistakes in design decisions due to a lack of insights into customer preferences and target markets.
Competitive Pressure
Companies must remain competitive in their market—they have to strive to create higher-quality products than their competitors at a lower cost and continuously review and modify their product designs.
If they fail to do so, they may end up pricing themselves out of the market or worse, be unable to compete with rivals’ offerings. This could mean having to invest more in R&D, leading to higher design costs.
Ultimately, these efforts can put a strain on the design budget and increase the overall cost of product design.
Regulatory & Safety Requirements
Product designers must consider regulatory and safety requirements when designing a product. Depending on the type of product, they can vary significantly.
Companies must adhere to the applicable regulations or suffer costly fines and penalties. Furthermore, products not carefully designed can pose a risk to public safety, resulting in losses for any brand associated with them.
Therefore, regulators and safety requirements should be taken into consideration when designing new products as this will protect both the company and consumers in the long run. Having an expert on board to advise you on all things law-related is costly, but it cannot be overlooked.
Product Design Cost Estimate
With so many factors that affect the price, product design costs can vary greatly. Generally speaking, simpler product designs will cost less than those that are highly intricate.
For instance, basic 3D models could cost anywhere from $40 to a few hundred, while more complex ones may cost several thousand dollars. CAD drawings, on the other hand, are generally in the $2,000-and-up range, and packaging design typically starts at around $500.
Ultimately, the cost of product design is determined by the type of product you want to create and how much detail goes into it.
Depending on the type of product design, it can cost:
Project Type | Hourly Rate | Per Project |
Concept Design | From $45 to $105 per hour | $100 and up |
Product Design | From $45 to $105 per hour | $100 and up |
Mechanical Design | From $45 to $125 | $5,000–$10,000 |
Industrial Design | From $45 to $150 | $5,000–$10,000 |
Prototyping | From $50 to $120 | $2,000 and up |
Source: Cad Crowd
As you can tell, you can choose between flat fees and hourly rates. If you have a simple project at hand, opting for hourly payment will help you save a lot.
However, you need to be extra careful when agreeing to an hourly rate and ensure the designer you hired isn’t clocking in hours without getting any actual work done. Luckily, there are tons of tracking apps to put your mind at ease.
Why You Should Outsource Product Design
The primary reason business managers choose to outsource today is the chance to focus on core functions, with 65% of them agreeing. 24% of businesses outsource to increase efficiency, while others hire third-party providers to increase expertise and flexibility.
Likewise, if you choose to outsource product design, you can streamline the creation process and gain access to a new set of skills, resources, and expertise.
Among its other benefits, outsourcing helps:
- Keep costs down
- Meet tight deadlines
- Open doors for innovation
- Expedite the design process
- Gain insight into new markets
- Reduce time-to-market cycles
- Promote teamwork and collaboration between designers
- Improve operational efficiency
It also allows companies to focus on core competencies while bringing in specialized professionals with new perspectives. Additionally, outsourcing gives businesses access to larger talent pools with diverse backgrounds who can deliver high-quality results in a jiffy.
Product Design Cost: Key Takeaways
Product design is a complex process that requires time, resources, and expertise to ensure an optimal end result. The product design cost can vary greatly depending on the scope and complexity of the project, but it’s important to consider all aspects when making your budget decisions.
FAQs
How do product designers charge?
Product designers typically charge in one of three ways:
- An hourly rate — charging for each hour spent on the project
- A fixed project fee — a single charge for the whole project, regardless of the time spent
- A retainer fee — a pre-agreed sum paid regularly to reserve the designer's services over a certain period
How do I hire a good product designer?
To hire a good product designer:
- Outline your project requirements and expectations
- Conduct a strategic search for reputable designers through platforms like Linkedin, Behance, or other professional networks
- Check their portfolios for quality and style resonance
- Narrow down your options
- Conduct interviews to gauge if they are a good fit for your team
- Discuss their rates
When should you hire a product designer?
You should hire a product designer when you have a clear idea for a product but lack the technical skills to bring it to life. A product designer can also be necessary when your existing product requires improvement or when your team lacks the creativity and proficiency to develop a product that can effectively resonate with your targeted audience.
Hiring a product designer is also important when you want to ensure your product is user-centric and solves a specific problem.
