The Complete Guide To New Product Development

If you’re reading this right now, you’re probably just getting ready to start a new project or in the middle of struggling with new product development. You're looking for some answers–and we get it. We’ve been there. The toughest part is not knowing what you don’t know. And these blind spots cost a lot of time and money.

We have been guiding small businesses for years–and even as experts, we still experience challenges every day. We are here to help. This guide is born from decades of experience and is designed to help you bring radically successful new products to market while saving you time and money.

 

This guide is for you, wherever you are now

  • Do you have an exciting new product idea, but you’re not sure where to start to actually bring it to market?

  • Have you just completed your new product design with a design agency and you want clarity on what to do next?

  • Do you have a Kickstarter or IndieGoGo project planned or funded and your factory is either stuck on a problem or way behind schedule?

  • Are you in the middle of NPD with your factory and getting bad prototypes, too many rounds of samples, over budget and over schedule?

  • Not sure if you've missed any critical steps. Take the assessment to find out if you are missing any of the key traits that successful products must have, and know the next step you must take to get it right.

Wherever you happen to be, read on to find the answers you need.

 

What exactly is new product development? 


New product development is the transformation of a market opportunity into a product for sale, from design to product. The phases along the way include:

 

  1. Product Strategy


    A product strategy is an outline of your company's strategic vision for the product. It states what it should be, how you will get there, and why it will succeed. The product strategy ensures you focus on a specific target market and feature set, instead of trying to be everything to everyone. Find out about our 4-Week Product Strategy Sprint here.
     

  2. Product Design


    Product design is the process of imagining, creating, and iterating on product designs to solve user’s problems and address specific needs in a given market. Well-designed solutions meet user needs and business goals.

  3. Factory Sourcing


    Factory sourcing is the identification of potential manufacturers for your product. While searching for your ideal manufacturing partner, you will learn very valuable information about what can and can’t be produced, and the associated costs. This will enable you to do a product reality check and validate your design for manufacturing. 

  4. New Product Development Plan


    Your development plan is the documentation of each critical step and milestone for a successful product launch. Having a good plan in place helps you get a realistic picture of how long the process will take and how much it will cost. It gives you the opportunity to make educated decisions about what to change in order to reach your target costs and timelines. You can download our New Product Development Plan template here.

  5. ProTotyping


    Prototyping is important in several phases of new product development from validating your idea with your target market in your strategy phase, to creating the quality standard for your factory in the product build phase. Here we’ll cover the later prototypes to take you from your development plan into the product build phase.

  6. Production


    The production phase has three parts. The first is creating a quality management system with your factory. Next is the first production run, called pilot production. Plan for surprises here. There is always some sort of challenge to overcome. The phase ends when your shipping logistics are resolved and documented.

  7. Product Evolution


    Product evolution is the ongoing work to continuously improve your manufactured product–the quality, cost, and lead times–with every production run. KPIs and live reporting are essential for ongoing improvements for the next generation of your product.

The new product development process starts with a solid product strategy. We maintain that product strategy is one of the most critical but most often overlooked steps in new product development. We fundamentally believe when you make good decisions early (based on data and not assumptions) it makes every other part of launching, marketing, and selling a radically successful product easier.

 

Product strategy is your first opportunity to apply design thinking to identify specific problems and solutions. However, most people jump right into product design and sourcing. Lack of a solid product strategy is the #1 reason why new products fail. Don’t skip this step. It’s a bit more time upfront, but you’ll dramatically save time and money in the long run.

 

Check out our product strategy worksheet if you need some help.

 

With a solid strategy and designed product, you’re ready for the next step: Factory Sourcing.

 

Factory Sourcing

 

Finding a good factory partner is so important. You end up in a really intertwined relationship with your factory. And, like any relationship, it requires good communication, skills, work, and trust to make it work. Choose carefully. A well-informed approach to product sourcing is essential as 80% of all new product development problems stem from a poor factory choice.

 

Additionally, as you are shortlisting a few potential factories, remember that the factories are also qualifying you as a potential buyer. Read our How to Source A Quality Supplier in China Post for all of the information you need to make a smart choice.

 

While searching for your ideal manufacturing partner, you will learn very valuable information about what can and can’t be produced–and the associated costs. This will enable you to do a product reality check.

 

Product Reality Check

 

The Product Reality Check™ includes an estimate of the unit cost, total development costs, and a factory pre-production timeline. It’s essential confirmation that you can hit your target price point and launch date for a successful product. More often than not, your first quotes will not meet your expectations. This is a great opportunity to think more deeply about your product. You can more consciously align what you are offering to what your ideal customers really want and need.

 

Why do you need to sell it for the retail price you had in mind? Have you consciously thought about your positioning? Why does your product have to have all of the features you designed? Which features are the critical few that actually make a difference for customers? Which can be removed? How can you change the materials, design, or manufacturing processes to meet your target price? While it can feel like a setback to get the initial quotes, it’s priceless information to get early on in order to form future design decisions.

 

Design For Manufacturing (DFM)

 

Design for manufacturing is the optimisation of a part, product, or component's design, to create it cheaper, more easily, and with better quality. Your first DFM report will come from factories during the reality check quoting process. It will include upfront ideas for improvements and cost savings for your product. This check may send you back to the drawing board to revise your design execution and maybe even your product strategy. While this is frustrating, it will ultimately save you a lot of time and money.

 

Getting feedback and guidance from an unbiased third party can be priceless at this step. People who aren’t so emotionally invested into your product can offer you valuable insights that you may not be able to see otherwise. One of the smartest strategic decisions you can make early on is to partner with an expert at this stage. Your partner should hold your product success as their top priority even if it means they won’t get your business right now. Feel free to reach out to us for a free Product Reality Check™ and DFM report if you need a partner.  

 

After you have identified a manufacturer, passed the Product Reality Check™ phase, and your product design is optimized for manufacturing–you're ready to create your product development plan. A solid plan will set you up for success.

 

Product Development Plan

 

Your product development plan includes a detailed budget and your development steps on a clear timeline. It will be your roadmap through a complex process with many interdependencies. Well designed plans include identifying key outcomes with each step and a thorough factory audit.

 

You can download our New Product Development Plan template here.

 

Product Development Timeline

 

You have to really reliably plan on what you're going to launch at what time for your strategic growth. And there's an urgency because usually, you’ve discovered a product where there's an unmet need. You want to get to market before someone else does. So, there's all that adrenaline–and all that stress–driving you.

 

“When we have conversations with people about the product development schedule, there's always resistance to the reality of the timeline.”

 

Many people keep a mental timeline in their head. It’s usually an aggressive timeline based upon what the factory has told them or a date they “need” to hit for launch. Don’t make this mistake. When we have conversations with people about their product development schedules, there's always resistance to the reality of the timeline. Even if it's not what you want to hear, the benefit of speaking with somebody that's been through this a bunch, is that you can plan around a realistic timeline now. And that's a game changer.

 

NPD is complex with many steps and dependencies. To create your product development timeline, start with a strategic high-level plan. Then work backwards from your ideal launch date to build out your program. Use the Product Roadmap tab in our Product Plan template to do this.

 

You will need to answer these questions to create your plan. 

  • What is your ideal launch date?

  • What is your NPD budget? Add 20-30% more for the unplanned. Expect the unexpected.

  • What types of prototypes do you need? How many rounds? 

  • How will your materials and processes impact your timeline? Examples include new molds, material sourcing, and/or new material development, etc.

  • What is the timeline information from your factory? Always double what they tell you.

 

Align Key Outcomes and Identify Potential Risks

 

New product development is a complex process and this forethought will help you to see the forest through the trees along the way.

 

Review your timeline and identify key outcomes for each step. You’ll want to identify potential risks with each development phase as well. We always try to tease out what we know. And then we try to identify to the best that we can what we know that we don't know. Those are the specific things we usually aim to discover in a prototype. We’ll figure out how we can test it and find the answers we need.

 

“If I've learned anything in my years doing this, it's to plan for a black swan. Just plan for one. They always happen.”

 

What’s really frustrating is inevitably, you will hit a setback because you forgot to identify something you “should have known.” These things are always challenging, it’s easy to beat yourself up because you feel like you should have known better. We’ve found that this is just part of every project. The best anyone can do is minimize them as much as possible through this planning process.

 

Then there are the black swans. Those are the unexpected, unknown unknowns. These are the setbacks that blindside you during new product development. If I've learned anything in my years doing this, it's to plan for a black swan. Just plan for one. They always happen.

 

Right Fit Factory Audit™

 

Imagine making a marriage proposal to a person you've only met once. How risky would this be? Hastily committing to a factory without a proper audit is similar. You are about to enter a long term relationship. The stakes are high. Most never imagine their IP will be stolen, their product will be knocked off, or there will be production mishaps. But, unfortunately, these things happen.

 

Our factory selection method is born from years of working with Chinese factories. We speak with over 200 new factories every year for our clients. Read our post on How to Source A Quality Supplier in China here.

 

Our guide covers the 5 essential steps to choosing the right factory:

  1. Know Where to Source


    Use sourcing and import database platforms to determine which factory is the right fit for your product.

  2. Protect Your IP


    Qualify factories and gather a group of quotes before allowing access to your IP.

  3. Shortlist a Few Potential Factories


    Confirm that the factory you’re considering working with is not a trading company and that they can communicate well. Verify they are experienced and well-equipped for your product. Use our factory scorecard template to shortlist and pre-qualify factories.

  4. Due Diligence 


    Use online sources to verify the company you’re working with. Due diligence is critical as there are fraudulent companies.

  5. Test the Waters 


    Have potential factories send you a sample and pricing. Inspect the quality, fit and finish of the samples.

 

Iterative Product Development

 

We call these steps product development because we’re doing much more than just building a prototype.

 

 

  1. Factory Prototypes


    Factory prototypes enable you to evaluate the abilities of the factory to meet your fit, finish, and functionality requirements for your product. It’s also a great opportunity to really test the working relationship and communication between you and your factory before big money changes hands.


    • Rapid Prototypes


      Rapid prototypes are low fidelity models to validate the form factor in real life. These are priceless for user feedback and early evaluations. Even if you’ve made rapid prototypes domestically, your factory will have to make some minor modifications in order for it to be mass produced efficiently.  Always get a final 3D print before purchasing molds.

    • Works Like Prototype


      Works like prototypes are high-fidelity functioning models to fully test the product form and function. They are essential to make before investing in tooling and fixtures. They are especially important for testing mechanisms.

  2. Mold and Tooling Production


    After you’ve gone as far as you can to validate the quality, functionality, and manufacturability of your product, it’s time to produce the tooling and/or fixtures required for manufacturing. These can be plastic injection molds, die stamping tools, forging molds, casting molds, stamping molds, hydroforming molds, etc. It’s a long list.

     


    This is usually your first significant investment of capital with your factory so make sure you’ve done your homework up to this point.

  3. Development Samples


    In mold and tool production, the first test shots are your first opportunity to see your product as it will be produced by your factory from the actual production molds. A lot of people get really frustrated when these don’t come out as production-ready samples. The truth is, they almost never do.

    “In mythology, the dragon always guards the gold. If you haven’t met that dragon yet, this is where you are going to have to deal with him if you want the gold on the other side.”

    Be prepared. This is just the start of a new round of iterative prototyping to prepare for mass production. Development samples are produced to dial in the factory-produced fit, finish and functionality of your product. It’s an iterative process. You can expect a minimum of three rounds of prototypes to work out every last detail.

     

    It’s essential to functionally test each sample. Use sample request forms to ensure you're commuting clearly and working as efficiently and quickly as possible.


    It’s not uncommon to hit some serious setbacks here. In mythology, the dragon always guards the gold. If you haven’t met that dragon yet, this is where you are going to have to deal with him if you want the gold on the other side.  


    Make sure you have a team of dedicated problem solvers that are totally committed to working through the challenges of this phase with you.

  4. Golden Sample


    The new product development process is complete when you’ve produced your golden sample. Your golden sample will be the physical record of the product your factory has committed to producing.


    Pro tip: produce 2-3 golden samples and store them in a secure location. Your factory QC agent should always have one in hand. After the golden sample is made, you're ready to negotiate and lock in your final price.

  5. Negotiate Final Pricing


    Really sharpen your pencil and negotiate with your factory because they're almost always going to change the price on you at this point. They want to cover their butts–and they want to make money. No doubt both you and the factory will have learned a lot during the product development process. You’ve most likely made several changes as a result.


    Be prepared to negotiate with your factory at this stage.  A lot of people just try to negotiate the bottom line price, and  this isn’t always effective. Make sure you understand all of the costs related to your bill of materials (BOM). Know what's actually on there and what things should cost. Negotiate on individual line items within your BOM, not the final total unit cost. Know how this particular factory makes its profit. That can be useful leverage in negotiations. Please note that your minimum order quantities also dramatically affect the price because there's a setup cost and they can amortize that over more units.

  6. Final Reality Check


    After negotiating the final price, we like to pause and do a final reality check. You can consider this your last gut check. You've invested a lot of time and money into this, but you're about to invest a whole lot more money when you begin to pay for inventory and shipping. This is your last chance to really say if this is go or no go. Are the market conditions still what they were when you started? Do you still have a strong business case for your product at the final price you negotiated with your factory? Were you able to deliver on the critical features that meaningfully differentiate your product? If it’s a go, then buckle up. It’s about to get fun!

 

Build Quality Products

 

The first step in your build phase is to mass produce your golden sample with good quality. To this end, create a quality management system and oversee every aspect of contract manufacturing. Create a production schedule to track production and perform QC checks at the right moments.

 

“When issues inevitably come up, make sure you have a team of project managers that are totally dedicated to putting in the work, creativity, and focus to solve hard problems quickly.”

 

  1. Quality Management System 


    One of the biggest struggles with Chinese manufacturing is maintaining a high quality product. Quality degradation over time is not malicious. Chinese factories are often just trying to increase profitability. Here are the essential steps to creating a successful QC system.

     
    1. Functional Specs


      Lock down your functional specs by documenting everything that can and should be verified with each production run. For example, specifying that the product should be red is not verifiable, but Pantone Red 565C can be confirmed.

    2. QC Checklist


      Next, create your formal QC checklist. It will be used by your “eyes on the ground” quality auditor. We recommend a third party who is not affiliated with your factory. Your list should contain all of your functional specs with specific testing instructions. 

    3. 3rd Party QC


      Contract your 3rd party QC partner. There are many great 3rd party QC suppliers around the world. Working with them can be as much of an art as a science. Be sure to communicate in detail about your specific QC checklist and inspection checkpoints before they visit the factory. Make sure they have the tools, instruments, swatches, or golden samples they need to perform all of your QC checks. You can search “China QC Inspections” to find several suppliers. We like Asia Quality Focus.



    4. Identify Critical QC Checkpoints  


      First get the production schedule from your factory. Identify when raw materials will be ordered and cut, and your sub-assemblies produced. Schedule inspections of your raw materials before sub-assemblies and your main assembly. These inspections are called dupro (during production). This is important because flagging poor quality materials upfront will save you time and money. Make sure you schedule a regular cadence of random inspections as well.

    5. Set Your Acceptable Quality Standards  


      Plan for regular quality checks for every new shipment you receive. Most projects should follow ANSI General Level II standards.These standards tell you how many units you’ll need to inspect for statistical significance. Bump inspection levels up to Level III or specify a special inspection for products for critical tolerances or high-risk uses like medical devices and safety equipment.

    6. Schedule Lab Testing  


      Schedule lab testing when materials need to be legally verified for safety. A few examples are REACH Standards, California Prop 65 Standards, and UL for electrical products.

    7. Non-Conforming Products


      Make a plan to resolve non-conforming products (dispute resolution). Even with the best QC management system, problems can arise.

    8. Improve  


      When quality issues appear, audit and modify your QC management system to prevent more of the same defects. Make a plan for dispute resolution with your factory. You’ll need to factor in the time (and money) required for a complete fix versus having inventory sooner of a partially compromised product.

  2. Production Samples


    Production Samples are the first samples pulled from a production batch to confirm that the quality and functionality of the golden sample is able to be maintained during manufacturing. We recommend shipping a small batch to your headquarters to inspect personally. It’s not uncommon to uncover challenges at this stage. When issues inevitably come up, make sure you have a team of project managers that are totally dedicated to putting in the work, creativity, and focus to solve hard problems quickly.

  3. Pilot Production 


    The pilot production run is the first time your factory produces your product at scale. There will be many lessons during this run. Therefore, order the lowest MOQ you can afford that the factory is willing to produce. For this first run, perform close inspections of every aspect of your product.

    • Assembly and sub-assembly 


      Does the product look and work exactly like your golden sample?

    • Surface finishes 


      Inspect your surface finishes. Do they meet your specs? Are they durable?

    • Packaging 


      Look closely at the box label and instruction booklet (if included). Are there typos? Do the colors match your Pantone standards? Make sure your packaging adequately protects your products. Test ship it to a few locations across the country.

  4. Transportation (or Shipping) Logistics


    Near the finish line, people often fail to specify all of the shipping logistics. Without a detailed plan, we see things go sideways all of the time. We see so many good products get destroyed during transit. Think about that. You’ve done all this work up to this point only to damage your product during shipping.  


    Plan ahead. Think about how you are going to protect your product during shipping. Do some tests. Put your package with your prototype in a FedEx box and ship it across the country to your cousin if you have to–and see how beat up it gets. Read our How To Import From China Post here

    • Logistics

       

      You will need a logistics company. This is the entity that will physically move your goods. A lot of companies will go door to door. Many Chinese factories will ship Exworks, which means you will have to physically pick it up from the factory. Other companies will ship FOB, which means you get to pick it up at the port. Either way, if you're working with a U.S. based shipper, be sure to specify whether your shipment is Exworks or FOB. A lot of them know how to make the arrangements–you don't need to be an expert. Just know those two terms and they can go figure out how to pick it up.

    • Tariffs 


      As tariffs are very high now, it’s important to engineer them in your favor. Your product may often meet a few different tariff codes. You can legally choose the one with the lowest rate. There could be a fifteen percent difference between two tariffs, which adds up. If you're buying $100,000 worth of product, that's an extra $15,000 you could save just by selecting the right code.

    • Exporting


      After being picked up at the factory, your order will be brought to a port in the manufacturing country. Local taxes and duties will be applied here. This will be handled by the factory if they are shipping FOB. If they are shipping Exworks, then your logistics company will handle this for you. They should estimate the export costs as part of your shipping quote.

    • Shipping


      It can take between 18-24 days to cross the water. The containers then need to be unloaded from the ships, clear customs, and then be transported by land. This process typically takes 30-35 days total. However, given the current state of the supply chain, it has taken up to 90 days. Be sure to plan for delays.

    • Brokerage


      When your shipment arrives at the port, it gets unloaded and moves through customs.  Your broker will provide the required documents and HTS codes for Customs. Customs will assess the duties owed in order to import your product. Most logistics companies including UPS and DHL will work with brokers already. It’s not usually required to contract with a customs broker directly.  

    • Delivery to the Final Destination


      Your order can be delivered to your warehouse by truck or train, depending on costs, ease, and time. Your ground transportation time is dependent upon the distance between the port and your warehouse.

What You Should Take Away From This

 

We’ve walked you through new product development step by step. In practice, the process isn’t always linear. Refer back to this guide often to help you navigate where you are and the road ahead. Here are a few final reminders:

  1. Let's not complicate it. If you only take one thing away from all this, have a plan. Plan for contingencies. Use your learning from the planning process to make strategic decisions about your product to reduce costs and timelines if needed.

  2. Carefully choose your manufacturing partner. 80% of the headaches and challenges of new product development stem from poor choices.

  3. Complete due diligence with your chosen factory. Walk the factory floor to see it first hand.

  4. Create a robust quality management system to ensure consistently high-quality products.

  5. Don’t skip prototyping before starting your tooling. Spend the money now to save much more in the future.

You should now have a clear idea of the path you need to move forward. However, if you still feel stuck, Product EVO would be excited to guide you through the entire process. We can handle everything from sourcing to shipping logistics.


Book a Strategy Call if you’d like specific research strategies for sourcing and importing your product.

On the call, you’ll get live feedback to start your research, clarify your goals, sharpen your strategy, and start your product roadmap.

  1. Get one-on-one feedback for an experienced professional to help you consider different viewpoints.
  2. Dive deep into your product strategy with thought-provoking questions.
  3. ​Gain clarity and confidence about your product, strategy, and roadmap.
  4. Leave with a plan you can immediately implement and tools to help align your team.

Get 30 minutes of free consulting by scheduling your Strategy Call (a $150 value).


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