Going from prototype to product is an exciting—albeit sometimes intimidating—process, one that relies on both standard procedure and innovation. Your course of action and timeline depend on a variety of factors, and there is no one way to develop a prototype. That being said, these three essential steps have been proven to make all the difference.

1) Determine material availability and pricing

The first thing you should do is create a bill of materials (BOM) that includes the total cost of every individual part as well as its assembly. Your BOM should also incorporate expenses for shipping, labor, and import taxes.

Once your BOM is complete, you can determine the product’s retail price. Adding the BOM to the labor and shipping costs for a single unit—or total cost per unit—results in the cost of goods, also referred to as the COGS. To calculate the gross margin, you subtract the COGS from the sale price. The margin depends on the distribution channel. For instance, selling through retail stores requires a higher margin than selling directly to the customer.

It is important to determine these costs before building a product. That way, you don’t run the risk of encountering unexpected costs and needing to raise prices in the future.

2) Hope for the best, but prepare for the worst

It is wise to assume that production, shipping, and regulation will require more time and money than your initial estimates. Finding a contract manufacturer can become a long and expensive process. Communicating your standards early on, however, can make creating a repeatable assembly process more manageable.

In terms of shipping, it’s especially important to pay attention to what needs to be sent overseas. While air shipping is the more expensive option, sea shipping takes up more time. It’s also vital to determine if it makes financial sense to ship a specific item by air.

It is also advisable to set aside extra time for government testing. Remember that a few iterations may be required to pass FCC Certification, UL testing, and CE testing.

3) Conduct a pilot production run

A pilot production run prepares you for the product launch. During this phase of the product development cycle, each item or component will be manufactured in the same way and in the same sequence it will be upon actual launch. Routine inspection procedures and assembly instructions are employed and modified if needed. After the pilot product is tested, packaging, stocking, and distribution should be evaluated for iteration or removal.

At Pivot International, we care about the quality of your product as much as you do. We bring over 40 years of experience ensuring that our clients understand the entirety of the production process, and we take inventory of and address any issues before you commit to production costs. Contact us today to learn more. We look forward to hearing from you.