When Should You Start Thinking about Design for Cost?

Having a product that is competitive in the marketplace is a multifaceted challenge. Industrial design plays a huge part, as does marketing. Both of these areas are usually constrained by cost and on some level the sales cost of your product. In a competitive market, even a slightly lower price than your competitor can have a huge influence on sales.

Many great ideas don’t make it to market and of those that do, many are not commercial successes. We technologists often think that having a superior spec-sheet will guarantee you to beat the competition, but this is not always the case. Betamax and Macintosh are good examples of this. Venture Capitalists (VCs) especially, want to see a return on investment. Marketing plays a big part in this, but it can only do so much. If your product is undesirable or of inferior quality, your sales are going to suffer.

So, when should the Design for X process (DFx) be incorporated?

Depending on existing customer research, competing products, release date, and Technology Readiness Levels (TRLs), cost optimisation can be incorporated earlier or later in the process.

For example, if you are developing a product that is completely new and unique, meaning you do not have a price anchor, cost optimisation can wait until Beta prototyping. Alpha prototypes, in limited number, can be used for customer research, which should give a read on what kind of price the market will tolerate, in turn giving you a Cost of Goods Sold (CoGS) target. In this case, the Alpha will be a works-like-looks-like prototype. Spending time cost-optimising at this point gives few benefits compared to accelerating the design and getting it into to test consumers’ hands.

But let us imagine that you have a product that is notionally comparable to another. Even if it is different, you can perhaps make an estimate (or even better, do some consumer research) of what customers are willing to pay for your Unique Selling Proposition (USP). In this case, creating an Alpha with technology that will never be cheap enough to use is not going to help you later. That does not mean you have to cost optimise aggressively, but creating a solution that does not have a hope of getting near your CoGS target is going to end up stalling your project when reality hits. One exception to this is if you are using a technology that is falling in price. Then it may be worth the risk.

These are just a few of the considerations and decisions that will need to be made to complete your project. If you do not have the experience or know-how to manage this yourself, why not contact Blue Lightning Solutions and ask about our Product Design & Development Service? A service that helps you transfer all aspects of your concept from a prototype to a production-ready product.

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