How Much Will It Cost to Develop a New Product in Asia?

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How Much Will It Cost to Develop a New Product in Asia?

How much will it cost to develop a new product in Asia?” is another 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, like for instance the industrial design work. Regardless of what stage your project is at, one thing is certain: you can expect significant savings having your device not only manufactured in China or Taiwan but also 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), which includes engineering, mold making (for the housing of the device), prototyping, and certifications. More complex products with a lot of programming can run in excess of $500,000. And, 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:

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

 

And of course, aside from development and manufacturing costs you also must take in consideration 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 own product!

But they do.

The Silver Lining

We’ve been in this business long enough to know that the success of a product doesn’t depend fully on a single good idea. Product development is about fitting all the pieces of a puzzle in just 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: 10 Ways to Lower the Cost of Your Electronic Product
2: Kickstarting electronic products: How Crowdfunding Works

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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!

3 Comments
  • Posted at 8:20 am, January 11, 2019

    Dear Sir/madam,

    We have a great idea: a diaper pail that vacumize the smelly diaper so the nursery stais clear of diaper odor.

    The most idealic solution would be to a lit which opens via a sensor. You put the diaper in a compartment and the vacumizer in the lit vacumizes and seals the diaper automatically.

    Thereafter it falls in the bin with a plastic bag which holds a great load of vacumized diapers.

    Is this something you can design for us?

    Looking forward to your reply.

    Kind regards,

    Yvonne Visscher
    InfantBay

  • George
    Reply
    Posted at 8:50 pm, February 14, 2019

    Sorry to intervene but you should really reconsider putting your idea in public like this. Just saying.

  • Posted at 1:59 am, February 15, 2019

    Hi George, thanks for your kind words. I’m trying to publicize them a bit on LinkedIn, you can connect with me there:: https://www.linkedin.com/in/keesjanengelen/
    I’m also open to guest blogs etc.or other ideas?

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