The Cost of Prototyping

It is sometimes hard for people who aren’t inventors or prototypers to understand the cost of prototyping.  I often look at a commercial product, quickly add up the cost of parts, and scoff at the outrageous price, but this isn’t really fair.  Of course, different products have different markups and price points.  The Apple iPad, for example, costs far less than what I could build it for, but Apple knows that they will make their money back on apps and licensing fees on most iPads.  Marketing, licensing, manufacturing, shipping, and support are all part of the cost of a commercial product, but many of these costs are offset by volume.

Prototyping works on an entirely different economic model.

The Costs of Prototyping:

1. Time:

Time is perhaps the single largest cost in prototyping.  Think about it, for every hour a prototype specialist works on your project they are eating up their salary, electricity, space in an office, and they are not working on anything else.  This means that the time must be turned into some profit for the company to survive.  Even if your prototype specialist is only paid $20,000 a year (which he/she isn’t…they are expensive!), an hour of his time costs the company approximately double her salary per hour, if not more.

2. Materials:

If a prototype already had all of its materials specified, it likely wouldn’t be a prototype.  Some trial and error is always involved, plus the ordering of materials.  Any special material will likely have at-least 25% waste associated with it.

3. Expendables:

Drill bits, paper, pens, lunches, whatever it takes to get a project done.

That’s what it takes, in a nutshell, to get a project done.  Note that I didn’t even go into the possibility of outsourcing some parts making or contract hiring for special projects.  Also, overhead and business expenses were rolled into time, but in most businesses you can’t do it that simply.

There is one more thing you’re paying for:

Expertise.

Expertise, passion, creativity: these are the things that seasoned prototype specialists bring to the table and that’s why you hire a prototyping house.  There are design firms, there are fabricators, there are machinists, then there are prototype specialists: the people trained by fire to deliver a working product, the first time ever, every single time.

If you’re serious about getting your prototype developed, you’ve probably already realized that you can’t do it alone:  Find yourself a great prototyping team, but be aware that there are very few specialists out there.

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