The Cost of Launching a New Product.

 If you keep your eye on Kickstarter, or Indigogo, you'll see companies trying to raise money for various products they want to bring to fruition.  Yes, I've invested in quite a few things ranging from electronics to clothing.  I bought a pair of shoes that I can wear in water, or in the city, or in the country without a problem.  They are comfortable and I don't need more than one pair when I travel but I've often wondered about the cost involved in bringing the product from conception to the market.

The cost all depends on what the product is being developed.  For instance, the cost of developing a new shampoo from scratch can be upwards of $25,000. Here is a breakdown of the costs.

1. $4000 to $8000 to develop and test the formula for shampoo.

2.  The minimum order for the manufacturer is 400 kg of product which will have a unit cost of $0.80 to $1.20 or a total cost of $8000 to $12,000 for the inventory.

3.  The manufacturer has to make a few samples to be sent to a laboratory to be checked out for stability and testing for microbes for $1100.  It would be more if you want the laboratory to conduct patch testing for allergies.

4. Then the person has to set up an e-commerce or fulfillment site which probably run about $2.40 per order filled only. This cost does not include shipping.

5.  Then add to this the cost of branding and registering your trademark is going to run between $1500 and $2500.

6. There is also the cost of incorporating the company, advertising, sales cost, etc.

What if you prefer to develop something with electronics, how would that change the cost?

The Electronic Development Stage covers the design of the printed board circuits from the preliminary stage to the test and documentation and costs between $15,000 and  $45,000.

The Software Development Stage covers firmware, mobile apps, and P.C. software which will set you back between $15,000 and $100,000.

The Industrial Design where the enclosures are created and runs between $6,000 and $24,000.

The Package Development Stage is where the packaging for the product is created and it can cost between $1,500 and $4,500.

Finally is the Project Management or the person or persons who keep the whole thing together and this costs between $4,000 and $10,000.

So overall you are looking at a cost of between $35,000 to $180,000 for just one products with electronics involved.

So this is another application for real world mathematics.  Let me now what you think, I'd love to hear.  Have a great day.