The 10 Costs You'll Pay to Bring Your Hardware Product to Market

Apple reportedly spent $150 million to bring the iPhone to market. Hopefully, your costs will be a little less.

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By John Teel


Opinions expressed by Entrepreneur contributors are their own.

The majority of entrepreneurs significantly underestimate the costs of bringing a new product to market. This is especially true for a physical product (versus software) and even more so with electronic/hardware products.

Related: 3 Tips to Save Money When Creating Your New Tech Product

To succeed with a new electronic gadget, it's absolutely essential that you know how much it will cost to accomplish your goal.

Cost #1. Electronics design

Designing the electronics. Estimated cost: $10,000-plus

The heart, or more appropriately the brains, for any hardware gadget is the electronics. From a design standpoint, the electronics will usually be the most expensive step. The majority of design engineers work on an hourly basis, so if things don't go exactly as planned (trust me, they never do), your costs can get out of control quite quickly. One way to avoid run away engineering costs is to use a company like Predictable Designs, which provides fixed, published pricing for electronic design.

Cost #2. Prototyping

Prototyping the electronics. Estimated cost: $1,000-plus per iteration

Once the electronics have been designed, the next step is getting the electronics prototyped. This includes the production of the bare printed circuit board (PCB) that holds and connects all of the electronic components, as well as the assembly of all the components on the PCB.

Cost #3 – Software

Developing the software. Estimated cost: $5,000-plus

Nearly all hardware products include a microcontroller or microprocessor that requires some level of programming (called firmware). If your product communicates with a smartphone, then a mobile app may also be required. In most cases, you'll need separate programmers for the firmware and the mobile app.

Cost #4 – The plastic enclosure

Designing the plastic enclosure. Estimated cost: $5,000-plus

You'll need to hire either a 3D modeler or an industrial designer to develop the plastic enclosure for your product. I suggest starting with a 3D modeler initially because these professionals cost less, but later you may want to hire an industrial engineer to make your product look more aesthetically pleasing. If appearance isn't critical for your product, then a 3D modeling expert will usually be sufficient

Cost #5 – Plastic enclosure prototype

Prototyping the plastic enclosure. Estimated cost: $500-plus per iteration

Once you have a completed 3D model for your enclosure, you'll need to get 3D printed prototypes produced. Because of the popularity of 3D printing, this cost has come down in recent years. Be forewarned that in almost all cases, multiple prototype iterations will be needed to get your enclosure ready for market.

Related: 8 Reasons Why It's Tough to Get Your Small-Brand Product Into Big-Box Stores

Cost #6 – The retail package

Designing the retail package. Estimated cost: $3,000-plus

Unless you plan to sell your product only online or on television, you're going to need a retail package. The retail package can be as important as the product itself. It must not only protect the product during shipping, but more importantly it must sell your product.

Cost #7 – The retail package prototype

Prototyping the retail package. Estimated cost: $750-plus per iteration

Just as occurs with the electronics and the enclosure, you'll need prototypes of the retail package. For a clamshell package, this will include the plastic shell and some artwork printed on an insert card. For a boxed product, it will include custom cut cardboard pieces plus the printed artwork.

Cost #8 – Certifications

Certifications. Estimated cost: $10,000-plus

Most products require certification(s), to be sold in various countries. This is especially true for electronic products, and even more so for wireless products. Certifications can be one of the biggest costs for new electronic products. Some of the various certifications required include:

  • FCC certification, for all electrical products sold in the United States, although this certification is significantly more expensive for wireless products
  • UL certification or CSA certification, for any electrical product sold in the United States and/or Canada that plugs into an electrical outlet
  • CE certification, for most products sold in the European Union. This certification is similar to the FCC and UL certifications required in the United States
  • RoHS certification ensures that the product is free of lead and is required for products sold in the European Union or California.

Cost #9 – Manufacturing

Setting up manufacturing. Estimated cost: $40,000-plus

Setting up manufacturing will likely be your biggest expense. The electronics are relatively low in cost to set up for mass manufacturing, while the major portion of the cost is for the plastic enclosure.

Unlike plastic prototypes produced using 3D printing, mass-manufactured plastic parts use injection molding, which requires the use of expensive steel molds.

Cost #10 – Everything else

Everything else. Estimated cost: $1,000-plus per month

In addition to the major costs listed above, there are expenses such as product liability insurance, general business insurance, warehousing fees, shipping costs, etc. If your product uses Bluetooth, you'll also have to pay a licensing fee to use their trademark.


The cost to advance a new electronic product from concept to mass-manufactured product varies drastically. For highly complex products, the total cost to market may be millions of dollars, although most can be done for $100,000-plus. The first iPhone reportedly cost Apple about $150 million to develop and bring to market.

Related: The 7 Steps of Effective Product Development

Before you dive head first into developing your new gadget, first understand all of the costs required to get it to market. This is true whether you plan to seek outside investor funding, or bootstrap the company yourself.

John Teel

Founder of Predictable Designs LLC

John Teel is president of  Predictable Designs a company which helps entrepreneurs bring new products to market. Teel was formerly a senior design engineer for Texas Instruments where he created electronic designs now used in millions of portable devices (including some from Apple). He is also a successful entrepreneur who developed his own product, had it manufactured in Asia, and sold in over 500 retail locations in three countries. Download his free cheat sheet for developing your new hardware product.

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