Developing a new physical product typically costs anywhere from a few thousand dollars for a simple mechanical item to several hundred thousand dollars for a connected electronic device — and more for regulated products like medical devices. The honest answer is a range, because cost is driven by complexity, not ambition: part count, electronics, software, certifications, and how many prototype iterations it takes to get the design right. This guide breaks the number down so you can budget realistically instead of guessing.

Typical cost ranges by product type

  • Simple mechanical or consumer product (a kitchen tool, an organizer, a fixture): roughly $5,000–$50,000 from concept through a production-ready design.
  • Product with basic electronics (sensors, a motor, simple controls): roughly $25,000–$100,000, since circuit design, firmware, and enclosure integration each add engineering time.
  • Connected or IoT device (app, wireless, cloud): commonly $100,000–$500,000 once you include firmware, app development, and wireless certification.
  • Regulated products (medical, safety-critical): often $250,000 to well over $1 million, driven by testing, documentation, and regulatory submissions.

These are development costs — getting to a manufacturable design. Production tooling and inventory come on top, which is why the full journey is mapped in our new product development pillar guide.

Where the money actually goes

Concept and industrial design

Sketches, ergonomics, and the product's look and feel. Usually 5–15% of the budget. Skimping here is false economy — a product that looks like a science project is hard to sell, license, or crowdfund. See what this phase involves in our industrial design guide.

Engineering and CAD

Mechanical design, material selection, tolerance work, and design for manufacturing. Typically the largest single line, 25–40% of the budget. Electronics add schematic capture, PCB layout, and firmware — the disciplines covered under electronics development.

Prototyping and testing

Expect several prototype rounds: a proof-of-concept, one or two engineering prototypes, and a pre-production unit. Each round costs from a few hundred dollars for 3D printed parts to five figures for functional electronic prototypes. We break down this line item in detail in how much a prototype costs.

Certification and compliance

Wireless products need FCC authorization; products plugged into the wall usually need UL or equivalent safety testing; children's products fall under CPSC rules. Certification commonly runs from a few thousand to tens of thousands of dollars — and a design that ignored compliance early can force an expensive redesign late.

Tooling for production

Injection mold tooling is the classic budget shock: even a modest part can require a five-figure mold. Understand this number before you promise a retail price — our guide to injection molding costs shows what drives it and the lower-cost alternatives for early runs.

What makes costs blow up

  • Changing requirements mid-project. Every pivot after engineering starts multiplies rework. Validate the idea first — the process in from idea to product exists to prevent exactly this.
  • Too many features in version one. Each feature adds parts, firmware, failure modes, and test time.
  • Choosing the cheapest quote. An underpriced development bid usually means the hard problems were not understood; you pay for them later, twice.
  • Ignoring manufacturability. A beautiful prototype that cannot be molded or assembled economically is a redesign in disguise.

How to keep the budget under control

Work in stages with a defined deliverable and kill-decision at each gate: concept study, proof-of-concept, engineering prototype, pre-production. Spend small amounts to answer the riskiest questions first. Use off-the-shelf modules and standard components wherever a custom part is not a genuine differentiator. And explore non-dilutive money — government funding programs like SBIR can cover a meaningful share of development for innovative products.

Get a real number for your product

Generic ranges only go so far — your product has a specific bill of materials, risk list, and regulatory path, and those determine the real budget. Projects House scopes development in defined stages with fixed deliverables, so you always know what the next dollar buys. Reach out through the contact form and get a grounded estimate for your idea.