Article Technical Rating: 6 out of 10
One of the first steps on the road to developing and marketing a new product is the creation of a prototype. The cost of a prototype can be broken into two parts: the engineering cost to design it, and the actual cost to produce it.
The total cost of the prototype (assuming an electronic product) usually includes the cost to manufacture the custom Printed Circuit Board (PCB), plus the cost of assembly, plus the cost of the components, plus the cost of the enclosure prototype.
Engineering costs vary greatly depending on the product complexity, engineering specialty required, product size desired (smaller usually takes longer and thus costs more), location, etc.
For more details on all the costs be sure to read my really in-depth article on the costs to develop, scale, and manufacture a new electronic product.
Most engineers work on an hourly basis especially on larger projects. Be warned though that it’s impossible to quote the development time for a complex product exactly down to the hour. So you should expect your costs to exceed what is initially estimated.
The hourly rate charged by design engineers varies depending on years of experience, education level, area of specialty, success with previous projects, etc. According to the Institute of Electrical and Electronic Engineers (IEEE) the national average rate for an independent contract engineer is $125/hr.
Roughly, hourly rates for an engineer can vary from $100-$300/hr. This is a big variance but once again it all depends on the experience level of the engineer, and you usually get what you pay for in this case.
For example, a more expensive engineer may be able to work twice as fast and produce a higher quality of work, both of which will lower your overall cost.
Although it may be tempting to use cheaper offshore engineers that is usually a mistake. With lots of experience you can safely outsource small, well-defined tasks to offshore engineers, but never the entire development. And never unless you actually have the skills necessary to do the job yourself, otherwise you have no way to confirm the quality.
PCB Production Costs
The cost to produce a few blank PCB boards usually runs about $750. This assumes their most basic manufacturing process, and if you want a super small board then more advanced, more costly processes have to be used.
To produce a prototype PCB I use a company called Sunstone Circuits.
If you are familiar with the basics of PCB design then you can use Sunstone’s PCB Instant Quote tool to estimate the cost.
Most boards require 4 layers. Adding more layers can help reduce the board size but at a higher cost. Although the cost decreases as the board size decreases, the number of layers has a much greater impact on cost. So bigger boards with few layers are cheaper than smaller boards with more layers.
Advanced PCB technologies, like blind and buried vias, can also be used to decrease board size even further. But these technologies will add thousands to your prototyping costs so only use them if absolutely necessary.
Wearable tech, for example, is extremely size sensitive and must be as small as absolutely possible. So with wearable tech I normally start with a larger than desired board size for the first prototype version.
Starting with a larger board accomplishes three things. First, it lowers the production cost of the boards. Second, it lowers engineering costs to develop the boards, because a bigger board is quicker to design and easier to debug. This means less engineering hours.
After the basic functionality has been confirmed then you can squeeze the board size down, if you really need it super duper small.
PCB Assembly Costs
For a couple of boards with say 30-50 different components the cost is approximately another $750 – $1,000.
For assembly (which means soldering all of the electronic components onto PCB) I use a company called Screaming Circuits.
Cost of the Electronic Components
In addition to the board production and assembly costs, there is the cost for the electronic components.
But for most products the cost of the components is minimal and usually totals less than about hundred dollars for a few boards.
Enclosure Prototyping Costs
As for the enclosure (a.k.a. the case) the cost depends if you want a custom design or if you can get by with a stock enclosure.
A stock enclosure will usually only cost a few dollars. A custom enclosure will cost several hundred dollars depending on the size, complexity and number of pieces needed.
For prototyping any custom plastic or metal parts I highly recommend Proto Labs. They offer various prototyping services as well as creating low volume injection molds that allow you to produce a few thousand parts.
Try to get by with a stock enclosure as long as possible to save money and complication. However, most products eventually require a custom designed case so you can’t delay that complication indefinitely.
Keep in mind that all of these costs will reduce significantly as your production volume increases. Even going from 2 units to 20 units has a huge impact on the unit price.
What costs you a thousand dollars for a single prototype may only cost a couple of dollars once you purchase much higher volumes.
If you need engineering technical support, coaching, training, connections, referrals, and resources to help bring your new electronic hardware product to market then be sure to check out the Hardware Academy.
The key to success is knowledge of the obstacles that lie in your path and a realistic plan on how to overcome those obstacles. Helping you accomplish this is the goal of the Predictable Hardware Report.