The new product development process in 6 steps

New product development is the process of bringing an original product idea to market. Although it
differs by industry, it can essentially be broken down into six stages: ideation, research, planning,
prototyping, sourcing, and costing.

Here's how to develop your own original product idea and what to consider at each stage.

1. Ideation

Many aspiring entrepreneurs get stuck on ideation, often because they’re waiting for a stroke of genius
to reveal the perfect product they should sell. While building something fundamentally "new" can be
creatively fulfilling, many of the best ideas are the result of iterating upon on an existing product.

The SCAMPER model is a useful tool for quickly coming up with product ideas by asking questions about
existing products. Each letter stands for a prompt:

Substitute (e.g. faux fur for fur)

Combine (e.g. a phone case and a battery pack)

Adapt (e.g. a bra with front clasps for nursing)

Modify (e.g. an electric toothbrush with a sleeker design)

Put to another use (e.g. memory-foam dog beds)

Eliminate (e.g. get rid of the middleman to sell sunglasses and pass the savings on to consumers)

Reverse/Rearrange (e.g. a duffle bag that doesn’t wrinkle your suits)

By asking these questions, you can come up with novel ways to transform existing ideas or even adapt
them for a new target audience or problem.

If you're still looking for your "aha!" moment, we also put together a list of sources for coming up with
your own product ideas, from analyzing online marketplaces and product descriptions for inspiration to
reinventing historical trends.

2. Research

With your product idea in mind, you may feel inclined to leapfrog ahead to production, but that can
become a misstep if you fail to validate your idea first.
Product validation ensures you’re creating a product people will pay for and that you won’t waste time,
money, and effort on an idea that won't sell. There are several ways you can validate your product ideas,
including:

Talking about your idea with family and friends

Sending out an online survey to get feedback

Starting a crowdfunding campaign

Asking for feedback on forums like Reddit

Researching online demand using Google Trends

Launching a “coming soon” page to gauge interest via email opt-ins or pre-orders

However you decide to go about validating your idea, it is important to get feedback from a substantial
and unbiased audience as to whether they would buy your product. Be wary of overvaluing feedback
from people who “definitely would buy” if you were to create your theoretical product—until money
changes hands, you can’t count someone as a customer.

Product validation ensures you’re creating a product people will pay for.

Validation research will also inevitably involve competitive analysis. If your idea or niche has the
potential to take off, there are likely competitors already operating in that space.

Visiting your competitors’ website and signing up for their email list will allow you to understand how
they attract customers and make sales. Asking your own potential customers what they like or dislike
about your competitors will also be important in defining your own competitive advantage.

The information compiled from doing product validation and market research will allow you to gauge the
demand for your product and also the level of competition that exists before you start planning.

3. Planning

Since product development can quickly become complicated, it’s important to take the time to plan
before you begin to build your prototype.

When you eventually approach manufacturers or start looking for materials, if you don’t have a concrete
idea of your product's design and how it will function, it’s easy to get lost in the subsequent steps.
The best place to begin planning is with a hand-drawn sketch of what your product will look like. The
sketch should be as detailed as possible, with labels explaining the various features and functions.

product development sketches for hidden radio

Product sketches from the crowdfunding campaign for a bluetooth speaker by Hidden Radio.

You don't need a professional quality drawing since you won’t be submitting it to a manufacturer at this
stage. However, if you are not confident that you can produce a legible diagram that will make sense of
your product, it is easy to find illustrators for hire on Dribbble, UpWork, or Minty.

Try to use your diagram to create a list of the different components or materials you will need in order to
bring the product to life. The list does not need to be inclusive of all potential components, but it should
allow you to begin planning what you will need in order to create the product.

For example, a drawing of a purse design could be accompanied by this list:

Zippers (large and small)

Silver clasps

Leather straps

Protection pouch

Embossed label

Interior wallet

Along with the components, you should also begin to consider the retail price or category your product
will fall into. Will the product be an everyday item or for special occasions? Will it use premium materials
or be environmentally friendly? These are all questions to consider in the planning phase since they will
help guide you through not only your product development process but also your brand positioning and
marketing strategy.
The packaging, labels, and overall quality of your materials should be considered as well before you
continue to the sourcing and costing stages. These will have an effect on how you market your product
to your target customer, so it’s important to take these aspects of your product into consideration during
the planning phase too.

4. Prototyping

The goal of the prototyping phase during product development is to create a finished product to use as a
sample for mass production.

It’s unlikely you will get to your finished product in a single attempt—prototyping usually involves
experimenting with several versions of your product, slowly eliminating options and making
improvements until you feel satisfied with a final sample.

razor prototypes

Several prototypes for the Angle Razor by Morrama.

Prototyping also differs significantly depending on the type of product you are developing. The least
expensive and simplest cases are products you can prototype yourself, such as food recipes and some
cosmetic products. This do-it-yourself prototyping can also extend to fashion, pottery, design and other
verticals, if you are lucky enough to be trained in these disciplines.

However, more often than not, entrepreneurs will work with a third party to prototype their product. In
the fashion and apparel industry, this usually involves working with a local seamstress (for clothing and
accessories), cobbler (for shoes) or pattern maker (for clothing). These services can usually be found
online by Googling local services in the industry.

Most large cities also have art, design or fashion schools where students are trained in these techniques.
Administrators from these university or college programs can usually grant you access to their internal
job board where you can create a request for prototyping help.
For objects like toys, household accessories, electronics, and many other hard-exterior objects, you may
require a 3D rendering in order to make a prototype. Artists or engineers who are trained in computer-
aided design and drafting (CAD) software can be contracted to do this, using UpWork or Freelancer.
There are also user-friendly online tools such as SketchUp, Tinkercad and Vectary, for founders who want
to learn how to create 3D models for themselves.

trifecto infininity pen

A 3D rendering for the Trifecto Infinity pen.

To get a 3D design turned into a physical model, makers used to have to get molds made for each part.
Molds are typically expensive and involve set-up fees for things like tools and dies that are used to cut
and shape pieces of plastic and other hard materials.

Luckily, with the innovation of 3D printing, designs can be turned into physical samples at a much lower
cost with a quicker turnaround time.

Chris Little, the founder of Wintersmiths, prototyped his line of barware using Quickparts and explains
that he was able to do so on a budget and within a few days' time. Alex Commons of Bulat Kitchen
recommends 3D Hubs, which he used to prototype a knife, paying around $30 per 3D-printed model.

3d printed knife product prototype

A 3D-printed Bulat Kitchen knife design by 3D Hubs.

5. Sourcing
Once you have a product prototype you’re satisfied with, it's time to start gathering the materials and
securing the partners needed for production. This is also referred to as building your supply chain: the
vendors, activities, and resources needed to create a product and get it into a customer's hands.

While this phase will mainly involve finding manufacturers or suppliers, you may also factor storage,
shipping, and warehousing into your choice.

In Shoe Dog, a memoir by Nike founder Phil Knight, the importance of diversifying your supply chain is a
theme emphasized throughout the story. Finding multiple suppliers for the different materials you will
need, as well as different potential manufacturers, will allow you to compare costs. It also has an added
benefit of creating a backup option if one of your suppliers or manufacturers doesn’t work out. Sourcing
several options is an important part of safeguarding your business for the long term.

During product development, each journey to a finished product is different.

When looking for suppliers, there are plenty of resources both online and in person. While it may seem
old fashioned, many business owners choose to attend trade shows dedicated to sourcing. Trade shows
like Magic in Las Vegas provide the opportunity to meet hundreds of vendors at once—to see, touch, and
discuss materials and build a personal relationship with suppliers, which can be valuable when it comes
time to negotiate prices.

During the sourcing phase, you will inevitably come across the decision of whether to produce your
product locally or overseas. It is a good idea to compare the two options, as they each have their own
advantages and disadvantages.

The most commonly used sourcing platform for overseas production is Alibaba. Alibaba is marketplace
for Chinese suppliers and factories, where you can browse listings for finished goods or raw materials. A
popular way of using Alibaba to find a manufacturer is to look for listings with similar products to your
own and then contact the factory to see if they can produce your specific design.

6. Costing

After research, planning, prototyping, and sourcing is done, you should have a clearer picture of what it
will cost to produce your product. Costing is the process of taking all of the information gathered thus far
and adding up what your cost of goods sold (COGS) will be, so you can determine a retail price and gross
margin.
Begin by creating a spreadsheet with each additional cost broken out as a separate line item. This should
include all of your raw materials, factory setup costs, manufacturing costs, and shipping costs. It is
important to factor in shipping, import fees, and any duties you will need to pay in order to get your final
product into the customer's hands, as these fees can have a significant impact on your COGS, depending
on where you are producing the product.

product development costing spreadsheet

A product costing example. You can view it in full or copy and adapt this spreadsheet to create your own.

If you were able to secure multiple quotes for different materials or manufacturers during the sourcing
phase, you can include different columns for each line item that compare the cost. Another option is to
create a second version of the spreadsheet, so you can compare local production versus overseas
production.

Once you have your total COGS calculated, you can come up with a retail price for your product and
subtract the COGS from that price to get your potential gross margin, or profit, on each unit sold.

Product development in popular industries

The product development process will naturally vary by industry, so let's take a brief look at what you
might have to consider across three of the largest and most well-established industries: fashion and
apparel; beauty and cosmetics; and food and beverage.

These three industries have relatively straightforward paths to product development thanks to the many
well-documented case studies that can be used for inspiration.

Fashion and apparel

In the fashion industry, product development usually begins the old-school way: with a hand-drawn
sketch or the digital equivalent made using a program like Procreate.
A sketch is then developed into a sample using a pattern maker or seamstress. During the prototyping
phase, a size set is created, which means a range of samples with different measurements for each size
you want to sell. Once the size set is finalized, it is put into production.

Rather than make the product, some fashion and apparel businesses choose print on demand to
produce their clothing in the beginning. Print-on-demand allows you to upload designs to a third-party
app that connects your store with a warehouse and screen-printing facility. When an order is placed
online, your design is printed on an existing stock of t-shirts, sweaters and various other items on offer,
creating a finished product without the need to design the entire garment.

Other factors to consider:

Hang tags. The branded tags that hang from a garment and usually contain information like price, size,
etc.

Labels. The fabric tags sewed or stamped into a garment that usually contain information about fabric
contents and care instructions.

Wash tests. Putting your product through wash tests to understand whether it holds up over time and
how it should be cared for.

Beauty and cosmetics

The beauty and cosmetics industry includes a wide range of products that is constantly expanding, due
to wellness and self-care trends. From makeup to bath products to skincare, many beauty brands are
focusing on all-natural ingredients and sustainability, which makes it easier to prototype a product on
your own using everyday ingredients.

White labeling is also popular in the beauty and cosmetics industry, which is the process of finding an
existing product or manufacturer, then packaging and branding the products they already produce.
Whichever route you decide to take, mass manufacturing for cosmetics is usually done by working with a
lab and a chemist to make sure quality stays consistent at scale.

Other factors to consider:

Labels and warnings. Identify all materials used in the product and any potential reactions.

Laws and regulations. Research FDA regulations and how they pertain to your product and packaging,
both where they are produced and where you intend to sell them.

Shelf life. Conduct tests and add necessary expiration dates to products.

Food and beverage

In order to move from recipe to packaged goods you can sell in stores or online, you will need to find a
commercial kitchen that is licensed to produce food and has passed a health and safety inspection.

These kitchens are usually set up with large ovens and cooking equipment to accommodate large
batches, but if you are considering mass production and packaging, a co-packer or co-manufacturer
might be a better option. These are manufacturing facilities that specialize in processing raw materials
and producing food and beverage products at scale.

Other factors to consider:

Labels and warnings. You will need to display ingredient lists and nutritional information.

Laws and regulations. Many countries have regulations around dietary information, allergen warnings,
and health claims that you will need to comply with.

Expiry dates. You will need to understand your product lifetime and how you will produce, package, and
stock the product to accommodate this.

What will you bring to the market?

During product development, each journey to a finished product is different and every industry has its
own unique set of quirks involved in creating something new. If you find yourself struggling to figure it all
out, remember that every product that came before yours had to overcome the same challenges.

By following these steps as you undergo your own product development process, you can break down
the overwhelming task of bringing a new product to market into more digestible phases.

No matter what you’re developing, by putting in all the necessary preparation—through researching,
planning, prototyping, sourcing, and costing—you can set yourself up for a successful final product.