How much does it cost to manufacture a working prototype?

Determining how much a functional prototype costs is a key piece of information before launching the development of an innovative project or product.

Prototyping is an intensive process in terms of money, energy, and time. These are also the three scarcest resources available to an entrepreneur or inventor. 

Key premises before defining the manufacturing cost of a functional prototype.

  1. The budget of a functional prototype has NO direct relation to the cost of materials needed to build it.
  2. The budget for designing and manufacturing a functional prototype has no direct relation to the final market price of the product. 

These assumptions likely reflect the initial thinking of over 90% of first-time inventors. Most tend to estimate approximate prototype costs based on material needs or the price of competing products. Nothing could be further from reality.

The cost of materials needed to 3D print parts of the prototype, the cost of enclosures or product housings, the cost of manufacturing a PCB, the cost of motors, peripheral components, battery, and sensors, do not even add up to 1% of the cost of manufacturing a functional prototype.

The prices of existing products have no influence whatsoever on the cost of creating a prototype.

For example, if we want to create a drone with unique geometric features, the existence of other drones on the market has no impact on the prototype cost.

  • Changes in geometry will require the mechanical team to perform analyses to ensure the device’s airworthiness. 
  • The electronics team will have to select components and design the drone’s electronics from scratch. 
  • The programming team will have to develop software from scratch to control the drone’s electronics.

The existence of similar products on the market only confirms the technical feasibility of the invention, but it does not reduce the cost of manufacturing the functional prototype.

What determines the cost of a functional prototype?

The cost of a functional prototype is determined primarily by the level of technical uncertainty associated with the main objective functions of the prototype.

The functional prototype creation process generally involves two types of work: research and execution.

The research work in prototyping is extremely expensive. It involves the invention creation process, where innovative ways are determined to fulfill functions in extraordinary and novel ways.

The execution tasks may vary in complexity within the prototyping process, but they do not involve uncertainty. These are time-intensive tasks, but they are not the most expensive part of a prototype.

Technical uncertainty is the most decisive factor in the cost of a functional prototype.

Formula to determine the cost of manufacturing a functional prototype

There are no secrets — here’s our formula to estimate the cost of functional prototypes:

Functional Prototype Cost = (Base_Cost + ∑Disciplines) × Uncertainty_Factor ÷ Experience_Factor.

cost prototype

Variables that increase the cost of creating a functional prototype

Base_Cost: Refers to the minimum service cost, which depends on the structural capacity of the prototyping lab available for the development and manufacturing of a new prototype.

∑Disciplines: The sum of technical disciplines refers to the engineering departments or areas directly involved in the prototyping process. For example: firmware development, software development, industrial design, PCB design, AI model development, etc. The more technical disciplines involved, the more the prototype cost increases.

Uncertainty_Factor: The uncertainty factor in prototyping refers to the risk of technical feasibility of the invention or the need to create components that involve technical unknowns. The uncertainty factor is the variable that most significantly increases the cost of prototype creation. Its presence in the prototype pricing formula is the only multiplicative factor.

 

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Variables that reduce the cost of creating a functional prototype

Experience_Factor: The experience factor is the only variable that significantly reduces the cost of creating a functional prototype. A high experience factor is not the result of having developed similar prototypes before, but rather the technical team's familiarity with the technologies required to meet the functional requirements of the prototypes.

Companies that manufacture low-cost prototypes

There’s no magic. Prototyping is a cycle that requires highly talented professionals, which are therefore highly valued in the market. Any savings during the prototyping process will eventually cost you—multiplied by “X”—at the product industrialization stage.

The low-cost prototyping companies follow this strategy for only two possible reasons:

  • They do not have enough serious, technically rigorous projects to justify hiring top-tier professional talent.
  • They rely on offering low-cost prototyping services to clients with low standards and limited chances of bringing their inventions to market.

How to reduce the cost of manufacturing a functional prototype?

There are three possible strategies to reduce the cost of manufacturing a functional prototype:

Limiting uncertainty

A functional prototype may involve multiple points of risk or technical uncertainty. There are functional prototypes with clear challenges in design, mathematical model training, coexistence of electronic components, among other common issues. The functional prototype is a tool that demonstrates the technical feasibility and capability of a product to overcome these challenges. However, to reduce or split prototyping costs, a common approach is to limit technical challenges and build MVPs instead of fully functional prototypes.

Manufacturing prototypes and homemade prototypes

There are several types of prototypes that precede the functional prototype. Some of these versions, such as homemade prototypes, are very handcrafted and can significantly reduce the perceived technical challenges associated with an invention.

Bringing in industrial partners

Bringing in industrial partners with prototyping capabilities could represent a substantial reduction in immediate investments needed for prototyping. However, including an industrial partner does not mean that the prototype will be cheap, as you will be paying for the prototyping services with a portion of your company's ownership. Therefore, this option is actually much more expensive than the standard cost of a functional prototype on the market.

Do you want to turn your idea into a product?

The time to bring your ideas to life is now. We accompany you throughout the entire process: from idea to product.

 

 

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