How Much Does it Cost to Develop a New Product?

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How much does it cost to develop a new product?

How Much Does it Cost to Develop a New Product?

Jul 7, 2016

How much will it cost to develop a new product in Asia?” or How much does it cost to manufacture a product? that’s a question we get rather frequently. The short answer? It depends.



Some clients require the full range of our service, while others may have already had some of these done in their own country, for instance, the industrial design work.


Regardless of what stage your project is at, one thing is sure: you can expect significant savings by having your device manufactured in China or Taiwan and developed here.


Costs will, of course, be heavily dependent on the complexity and size of the product. Some products may incur $120,000 of Non-Recurring Expenses (NRE), including engineering, mold making (for the housing of the device), prototyping, and certifications.


More complex products with a lot of programming can run over $500,000.


If you haven’t already heard, volume is king in China, and few factories in China are willing to take orders below 5,000 pieces.


At Titoma we realize that especially on shorter run products, the NRE investment weighs heaviest, so we also help our clients do lower quantity projects, as long as the first order is worth at least US$150,000.


But, despite the savings of having development and manufacturing done in Asia, the capital needed to develop a new product can still be significant, considering it may involve most or all the following product development expenses:

  • Industrial Design
  • Mechanical Engineering
  • Electronics Engineering
  • Firmware Programming
  • Software Programming
  • Prototyping
  • Certifications
  • Tooling/Mold Making
  • Manufacturing
  • Packaging


develop a new product in Asia

Besides development and manufacturing costs, you also must consider the cost of shipping the goods (generally about 5% of value), VAT tax in your home country, trade shows, and marketing, etc.


With all these costs, it’s a wonder why anyone would want to develop their product!


But they do.


Develop a New Product – The Silver Lining


We’ve been in this business long enough to know that a product’s success doesn’t depend entirely on a single good idea.


Product development is about fitting all the pieces of a puzzle in just the right way. If one piece doesn’t quite fit, the whole project fails.


But once everything fits into place–and at just the right time, mind you, especially since the market window in electronics can close quickly–then the rewards are frequently considerable.


Please contact a Titoma representative for more information, a quote, or other inquiries.

Other articles you may also enjoy reading:

1: 9 Design for Manufacturing Rules Crucial to Remain Competitive 
2: Kickstarting electronic products: How Crowdfunding Works

Case Engelen

I'm the CEO of Titoma and I've been working in electronic product development in Taiwan & China since 1994. What I've discovered is that to get to market FAST you need to take time to prevent delays. And the most important way to do that is with early supplier involvement. With us doing both Design AND Manufacturing, we save our clients time, aggravation and a quite a bit of money. If you're an established B2B company needing a Reliable Custom Device, on Time and on Target, we should talk!

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