Why Outsource?
Product Development: Not a Small Undertaking
Developing a product in-house may seem like an ideal scenario at first glance, but the start up costs for product development can be very high and ultimately cost significantly more than outsourcing to an experienced firm. Unless you are planning on running a company that will make a very extensive product line with frequent updates for many years, outsourcing will likely be the most economical choice.
The Cost of Product Development
Before the first employee is hired and the first "napkin sketch" can begin, you will need to make the following purchases:
So, before you even begin searching for a suitable designer/engineer, you have likely already spent $10,000, and that's assuming you can have acceptable aesthetic design and full production DFM (design for manufacture) done by the same individual. Then, we get to the costs of hiring an employee:
- A computer+accessories capable of running advanced CAD software$1500~$3000
- A license for a single seat of a CAD program (Solidworks price shown) and yearly subscription $4000+$1300
- Office furniture $1000
- Office space $500~1000+ a month
- A 3D printer (recommended) $1500~$30,000
So, before you even begin searching for a suitable designer/engineer, you have likely already spent $10,000, and that's assuming you can have acceptable aesthetic design and full production DFM (design for manufacture) done by the same individual. Then, we get to the costs of hiring an employee:
- Administrative costs to find a suitable candidate (including time for interviewing/paperwork)$1000~$2000
- Salary+benefits of a designer capable of handling the full product development process $70,000~$100,000+ a year
Outsourcing to the Rescue
Rather than spend the price of a small house just to begin product development, let's look at the economics of outsourcing. With Cohesive, work is done on an hourly basis that allows you to take the project as far as the budget will allow. Need down time to make some decisions? No problem, you are only billed for active work hours. Outsourcing product development takes the weight of learning a whole new industry off of your shoulders and lets you concentrate on what you really want to: finding market avenues for your new product. Many of the largest and well-known consumer brands outsource their product development due to the flexibility and monetary savings afforded. Outsourcing just makes more sense (and cents).