Breaking Down Product Development Costs
Product development is the process of designing, planning and developing salable products for your brand’s target consumer. It is a necessary part of the overall manufacturing process and doing it right the first time with proper planning will set you up for success. Unfortunately there are many pitfalls to the product development process which can potentially cost you a ton of time and money.
The main deliverables created during the product development process include:
Creative and Technical Designs
Fabrics and Trims Selected
Sample/s Reviewed and Approved for Production
Paper and/or Digital Patterns
Although the steps to the product development process are generally the same, the way factories charge for them is not. Some offer á la carte services for you to pick and choose what you need while others package the fees by style.
The product development process can be confusing for any new brand entering into apparel production for the first time. If you’re not familiar with the process or steps your specific brand needs you could end up overpaying by thousands of dollars before you even get started with production.
Here is some advice on how to maximize your investment and minimize your costs.
Many domestic manufacturers like to package their fees by style. I have seen the packages range from $500-$2500 per style with the average being $1,000. The more complex the design, the longer it takes to develop which increases the cost.
What’s included in these per style packages can vary greatly by factory. Be very clear on what is included so you can fully understand the total investment. Ask questions about additional fees or steps in the process to become production ready with their factory.
Also, understand how many prototype samples are included in the packaged fees. You will need to approve the fit, construction and design of each style before starting production. This process usually takes at least two rounds of sampling to get the products just right. Some factories only include 1 round of sampling in their packaged fees so you end up paying more just to get the product right. Knowing their process up front can avoid these costly hidden fees.
À la Carte Fees
This fee structure offers you the most cost efficient structure for choosing specific services you may need to create your product. It can also be the most overwhelming if you’re unsure about the process and what your specific product development needs may be.
I suggest asking the factory to outline what steps you’ll need for your specific products. Compare the fees and selected services with other factories to make sure you feel confident in the outlined process and pricing. Review the selected fees in detail to make sure you aren’t paying for things you may not need.
If you have worked with an outside vendor for some of the product development steps, make sure the factory will use the materials you’ve already paid for. For instance, some factories will need to create their own patterns regardless of if you’ve already had them created. Knowing these required development steps will keep you from paying for the same services twice.
International Product Development
It can be surprising to many launching brands that the fees for product development with international partners is significantly less than in the US. Some of our international partners charge NOTHING for product development because they view it as the cost of doing business and their investment of building the relationship.
One of the biggest challenges in developing products with overseas partners can be communication. It can seem intimidating at first and it’s easy to feel like the process will be hard to communicate exactly how you want your product.
Having developed products with global vendor partners for over 15 years, I can confidently say it’s not as hard as it may seem. The key is being thorough with your information, sending physical samples for them to reference and scheduling regular meetings with free online chat services like Zoom or Google Hangouts.
Like any successful factory relationship, communicating your vision and providing feedback is the key to getting the product you envision. Since you don’t have to invest as much money into the product development process with these partners, it can be worth the investment of your time to maintain the solid communication.
Product development can get expensive very quickly. Knowing how you’ll be charged and what’s included will help you from paying too much before you even get your brand off the ground.
Ask questions, be informed and compare costs between resources to validate your investment.