The choice between creating a working prototype (a product sample that looks, feels, and works like the actual product), an appearance model (non-functional, but adheres to actual products physical appearance, and dimensions), or a functional prototype (a crude model with limited functionality, often used to present a a product under concept development) for product presentation has often confused product innovators. There are a range of factors to consider, from budget constraints, product liabilities, to meeting deadlines– but the key to selling your product lies in having in-depth customer knowledge so you can manage the expectations of your potential consumers or investors, as well as future retail buyers, and being aware of the circumstances that surround your product presentation so you choose and create the right type of prototype to make your presentation a success and get your product or idea sold.
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The subject I want to talk about has to do with getting samples and prototypes of new products created. I want to start with a few definitions to clear up some things I’m going to talk about, so I don’t confuse you. Many of you, especially if you’re already selling on Amazon or elsewhere, maybe in your own website, have ordered a sample of a product from a vendor or a factory and a trading company. The first thing I wanted to define is a sample. A sample is an actual production product that is usually either free or sometimes you might have to pay for it, but you want to get one from your factory, your trading company or your vendor and check it out. You want to see if it has quality. You want to see if you think it’s worth the price they want to charge you.
Does it do exactly what the factory or the vendor says it’s going to do? Does it meet the specifications? You need a sample in order to check that out. You’re not going to buy product site on scene in large quantities, either less than a container load airfreight or container load of a product and put it into Amazon or in your own warehouse and sell it to people without checking it out. A sample is a sample of a product, but an actual product that you would be reselling or incorporating into your product if your product is made of multiple other products or components, maybe you’re bundling something together, so you want a sample. A sample is just that. It’s an actual production unit, but usually one or two or some very small quantity.
If you are developing your own product or modifying an existing product, making something instead of buying something and putting your label on it or your brand on it, you are going to make it a little special. Make something instead of me-too being a commodity. Anybody can buy and putting your name on it, you’re making something either “Me Special,” which is maybe a unique color or some other slight variation that is an order that you are placing that’s a little unique, a little different flavor. If you’re going to make something ‘me special’, there’s maybe a different color or some variation on that, I would still call that a sample because it’s probably an actual product but just in a little bit different flavor.
Maybe it’s printed with your logo on it and a unique color or a unique finish of some kind. I would still call that a sample, but then when you get into prototypes is when you’re making something that’s unique to you, something that we would call ’me only’ or an original product. It still could start and have its basis in an existing product, but you’re making a significant variation. You’re probably going to tool for something, whether that’s an injection mold or some other kind of mold or thermoform for plastic. Maybe there’s a metal stamping involved or special printing dyes. There are all sorts of things that you might need a tool for.
That’s where prototypes come into play. If you’re making something completely original, it’s never existed before or at least a portion of a product that’s never existed before, that’s a great thing to do to grow your brand and not have to compete on price near as much as you would have to if you’re buying something off the shelf at a factory and then putting it in your own package or maybe putting your logo on it. You have an opportunity to make more margin because it’s not going to be this race to the bottom of competing on price with other people. Once your listing gets some traction, once your product starts to get some sales, other people will say, “That’s working. I’m going to do it too.” It’s not going to be as easy for them to do it if you’ve had the tool for something and truly manufacture something unique.
When you are developing a product like that, something original, something ‘me only’ or maybe certain kinds of ’me special’, you may need to make an actual working functioning sample to be able to use either for photography ahead of time of sales. Maybe you’re going to get this product put into big box retail. Maybe you’re going beyond dot-com and you’ve got an opportunity to place it at Target or Walmart or maybe Costco and you may need to show the buyer of that retail chain because there are people at those chains and different brick and mortar resellers that are going to have to buy it from you to put it on their shelves. You’ve got to show them you’ve got a great product. You want to be able to get that order, convince them that it’s the right product without having to spend a lot of tooling dollars and without going into production to make an actual product before you have the order. How are you going to do that? It usually involves making a prototype of some kind.
To specifically define that, a prototype is usually a one-off manufactured product, but it’s usually handmade or may use multiple different manufacturing processes to create it that are not the same as the production processes that will be used when you’re actually manufacturing a large order of it because the costs of doing that are most often prohibitive unless you have an order and unless you’re confident something’s going to sell. You’re going to skip prototyping and you’re going to go ahead and tool for it way ahead of having an order if you’ve got the budget for that. We’ve seen that. Some people do that. Some of our clients have done that in the history of our careers. They’re confident they can sell it and it’s worth it to them to be showing the retail buyer an actual product, but you’ve got to invest a lot of money and time into that product before you’re going to have that sample to be able to try to sell, so most people don’t do it. They create a prototype; a one-off model is one way you could describe it.
There are usually three types of prototypes. First is a complete working prototype that looks exactly like the end product will look and functions exactly like the end product will function. It’s usually the most expensive prototype to make because there are a lot of things that if you haven’t tooled for them, are going to cost a lot more to make one-off because they’re either going to be machined by hand or handcrafted or one-off crafted. In some cases, you’ll use the same manufacturing techniques as you would when you are in production on something, but because you’re making only one, it’s a whole lot more expensive. That’s the first type, a complete, functioning prototype that looks, feels and functions like the real product would.
Then there is what I would call an appearance prototype. When I’m talking with my colleagues in China about these types of samples, they refer to that as a prototype just for looking and not for function. That’s an accurate description and translates pretty well. That would be what I would call a model. It’s a prototype, but it’s an appearance prototype and an appearance model that absolutely is dimensionally correct, looks exactly right, feels right, but does not have all the functionality due to manufacturing constraints and the fact that you’re not making this product in large quantities yet.
The third type would be what I would call a functional prototype, and this is something that is a prototype that’s made that absolutely functions the way the actual product is intended to, but it doesn’t look perfect. In fact, a lot of times it looks very crude or rough. That’s usually needed in situations where you need to prove the concept to somebody that it works. I’m going to caution you to think carefully about making a functional prototype that does not look and feel like the actual product is going to feel, to make sure that you’re carefully considering who the audience for that prototype is because a lot of times, people that you might be making this for don’t have quite the vision that you do of what this product will be in the long run and how it will look and feel.
Sometimes a functional prototype looking so crude can make a bad first impression. If you’re using it to convince investors to come on board, to fund your company or your project, if they can’t see past something that is in their minds might be cobbled together, even if it’s not cobbled together, even if it’s been engineered very carefully and precisely made, just the fact that it may be a little rough around the edges, isn’t painted, isn’t the color it would be, doesn’t feel quite right, that can distract people from the point of this functional prototype, which is to prove that the product will work. It’s one thing to see one that’s pretty and looks right and take a leap of faith that you know it will work. There’s this whole debate over, “Do you have an appearance model or a functional prototype?” It can be a tricky one because in both situations, you run the risk of potentially making a bad impression and you have to be careful to manage that expectation of either your potential investor or a retail store buyer.
I’m going to give you some examples of this from our experience. If you’ve done any research into our design consulting history, you know that one of the things that we’ve done a lot of is design home office chairs and commercial office chairs, seating. Those products are pretty high liability products to make. I’m sitting in one now that your entire weight of your body is in it. This is a product that has some significant safety issues and liability. In fact, office chairs were the second highest liability product on the market, second only to ladders, which is pretty scary. I don’t know if you realized on a ladder, you see all the warning labels on a ladder. A lot of the costs you’re paying for a ladder is not the cost of material or manufacturing or even profit margin for the manufacturer or the retailer, it’s liability insurance because so many people get hurt on ladders and sue the ladder companies thinking it’s their fault, not user error. Chairs tend to be a pretty high liability item also. We’ve designed hundreds and hundreds of office chairs in our career and we often would go and meet with retail buyers. The chairs we’ve done the most of, although we’ve done a lot of different markets, but most of the market we would sell to retailers like Walmart, Target, Staples, Office Depot and Costco.
In terms of Costco, I want to talk about them in particular because Costco has a higher quality standard than any other mass retailer that I’ve experienced. There are industry standards for testing but when you think about it, you have your whole body sitting in a chair and that has to be tested that the chair is going to hold someone’s weight. Costco requires a standard of testing that is 30% above the entire rest of the retail industry. That’s because they want to have higher quality products in their store. When we go and show them a new chair design, the chairs are made of a lot of injection molded plastic parts among other things. It could also be aluminum castings and a lot of different materials, and it’s very expensive to tool for those things. Generally, we would make a prototype of a chair to show it to a retail buyer to say, “Yes, I would like to buy that and put that on my retail floor.” You don’t want to spend tens of thousands of dollars.
In fact, one of the most successful chairs that we sold at Costco was a chair that was almost entirely injection molded or 90% of the parts on it were injection molded plastic of one kind or another. The entire tooling cost for making that chair, all the tools in China, was about $75,000, which is not bad by US tooling costs, but in general as a business expense for a speculative product, $75,000 is a lot of money. You don’t want to tool for that until you’re sure that you’ve got an order. We would go into Costco and bring usually two different kinds of samples. If it had a new function that had to be tested, someone needed to feel how comfortable it was to sit in. We would bring a functional sample that didn’t look exactly beautiful, but more importantly, we would bring in appearance model. I said manage expectations. We would put these big caution tapes, big yellow and black diagonal stripes, almost like a police caution tape around the chair saying, “Do not sit on the sample because it’s an appearance prototype only.” Usually that happens because of the base of the chair. Do you ever notice that five-pointed plastic base that is on a chair? We would create, design and develop new ones.
I’ve got a couple of examples. First, what would be a prototype of sorts for a base. This isn’t a very exciting design. The unique part of this base as it was a user-assembled one. All these points come apart for more efficient packaging in a box, but this is made out of solid ABS plastic. I would call it a prototype. It’s not a functional prototype. It is more of an appearance one even though this hasn’t been painted yet. This is machined out of solid ABS and then they glued different pieces of it together. There are little seams here. Once you paint it, you wouldn’t see it. You could see how when you make a prototype of a part that’s going to be injection molded plastic, you’d make it out of solid plastic so you could show what it would look like when you’re tooling for it. You could show it, but you wouldn’t want someone to sit in a chair with this. We’ve made it so you could put the casters in the bottom of it and we even made it with the right shape for that gas lift to go in the center of it.
You could set a chair on the floor and it will stand up and it looks like the real thing but if you let a buyer from Costco sit in it, it’ll break. They’ll fall to the floor and get hurt and believe me, that does not help your sales efforts. You need to have another chair that maybe isn’t pretty, doesn’t look like it’s going to, but functions properly. Maybe use a different production base that’s not the right one. We also did sometimes make functional prototypes where we’d have a plastic shell that wasn’t solid and in here would be some negative space and grooves and we’d have a tube steel or a solid steel spider web frame of a base that would support weight. If you talk about pros and cons of appearance prototypes and of functional prototypes, which one you develop or maybe you develop multiples is a judgment call depending on your situation. It’s ultimately a business decision.
Hopefully you know your audience, you know the buyer at the store or the investor you’re going to be presenting to. Are they very visual people or they’re very technical people? Are they the kind of people that make decisions more on how they feel, their emotions or is it more straight numbers and hard facts? The more you can determine some of those things, the more you can make that decision. There’s another base. This is a production one that was another design that we created that at one point started out as an appearance model. We showed it to the buyer and they liked it. Then after that, we tooled for it. This is an actual injection molded. There are all the different ribs and all the different markings of an injection mold, but this injection mold is pretty expensive. For this type of a base for a chair, that tool in China costs about $10,000 because it’s so big and the material it’s going to be molding. It’s a big bet to go and tool for something like that before even we’re going to show it to a buyer to buy. That’s why we often create prototypes.
Let’s say the arms of the chair were the prototypes, everything else is production, just the arms are unique and have been prototyped. They look great, but they are not as strong as if it were made in production. Even though we would always tell the buyer, “When you get out of the chair, please get out of it carefully because the arms are not actual strength. They’re fragile.” I can’t tell you how many times buyers either didn’t remember or didn’t care, and they would get out of the chair, they put their hands down on those arms and push their body up by their arms instead of their legs, pushing down on the arms so when they push on them, it pushed them out, we’ve had them break prototype arms. While on the one hand they will be understanding, “You’re right, that’s a prototype. I’m sorry,” it still can make a bad impression.
That’s why I caution you with appearance prototypes versus functional prototypes. If at all possible, as long as there’s not a financial barrier to it, I would always make a prototype that both looks and functions properly like the real thing because you never know how that first impression is going to be and someone may judge your product, your company and your quality based on something that is not an accurate representation of what you will sell in production or on the actual open market. It can hurt you. Other times I’ve had it where buyers are very understanding and they have no problem and they have that vision. They can make that leap of faith. Different types of prototypes and samples for different purposes can be expensive, I’m not going to sugarcoat that. We’d be making prototypes of consumer products every week of every month for years on end for our clients and on behalf of them, I would tell people, “We’re in the sample making business. It takes making samples and making prototypes in order to get sales. The better you get at that and the more systems you put in place to do that well, the better sales you’re going to get.” For lot of people that you need to show this to, seeing is believing. Seeing, touching, feeling, experiencing is believing even if it’s not on the market yet.
Prototypes and samples are a necessary step in product development, especially when you’re creating ‘me only’ or original product that ultimately will get you the most profit and the most longevity in the market, but you got to put in some time and some money in order to do it right. You can prototype things anywhere. All over the United States, there are manufacturers or model shops that have lots of different machines and can make anything out of any type of material. That can be very expensive. Materials are expensive, the labor is expensive, and usually, the machinery, their renting amount is expensive. You can end up spending thousands and thousands, even tens of thousands of dollars making a prototype of something that’s going to retail for $49, $99 or whatever it might be.
The cost of a prototype has nothing to do whatsoever with the retail cost of what a product will be. It’s about what it takes to make those samples, but the reality is it’s usually a whole lot cheaper to make a prototype, the working and the beautiful-looking prototype, than it would be to tool for all the production tooling necessary to make that same product. It’s worth doing it and it serves a very good purpose. At the same time, anytime that I have the ability to make an actual functioning product that’s out of the real materials and the real process, I always do try to do that because as long as you can afford the time and the money to do that, that best serves every situation.
There are a lot of deeper dives that we’ll take in the future in different Office Hours regarding different subjects of the product development process, prototyping, tooling. There are lots of great subjects to dive into, but I have a couple of questions that were written in. You have the ability, as a member of Product Launch Hazzards, to attend any of these Office Hours live and I know not everybody can do that given the schedules. They’re available on replay on the membership site, but also you can write in questions ahead of time. If you see a subject area of interest that you’re not going to be able to attend live, you can write to us and give us a question that we can answer during Office Hours.
I have three questions that were mailed in and I want to share these with you. The first one is, “Is there such a thing as prototype tooling?” I guess somebody got a little confused when they heard this. It seemed like it might have been an oxymoron. Prototype tooling. Does that make sense? It can. We’ve experienced this and done it a good handful of times. Sometimes prototyping processes that are available are not representative of either the true look and feel or function of a product. In order to accurately test it, you need to do it. I’m going to use an example of injection molding. You have a very small injection molded part that you need to make that’s either a functional part or an appearance part. In order for this prototype to function properly, you’ve got to make it out of the real material. You’ve got to mold it. Why would you make a prototype tool and not bite the bullet and make the big tool? Here’s why. Not all tools are created equal. It’s usually made of metal, a certain kind of steel alloy in order to injection mold plastic, but there are many different kinds of steel and many different costs of steel. You can make a “prototype tool” out of a cheaper metal. It’s a lot less expensive to make those first parts and be able to test them.
The parts will be representative of what they will be in production, but the tool probably won’t last very long in terms of the number of parts you can make off of it. If you do that, that tool can cost you a lot less. The other thing is when you’re especially making a very small part, we’ve done this a number of times. We’ve been making internal parts for other products that make them work better, more efficient, especially functional things. I’m talking about small parts like an inch tall or 30 millimeters in cube or so. In order to test it, you only needed to make a very small injection mold tool where you would mold one at a time. That’s a pretty small tool and the overall size of the tool and how many cavities are in it, meaning how many parts it will make at once, can affect the cost of a tool and make it a lot less expensive.
You can make a prototype tool so you can injection mold a part in the real plastic and be able to test it, prove it out, show it, whatever you need to do, but that tool is not going to be practical for production. The cost per part coming out of that mold of one cavity will be a lot more expensive because when they’re running an injection molding machine, that machine has a cost of running it per hour per day and setting it up to also run. There are costs that when you’re making thousands and thousands of a part are negligible, but when you’re making a couple, it’s quite expensive. Same thing with the tool, but it’s a very viable solution to make a prototype tool that would be lower quality metal. There are other aspects to a tool. I’m not going to get too technical on you, but there’s other reality functional aspects of engineering that go into a tool that you can shortcut and skip over in a prototype tool to get those first parts, prove it out and then when you’re going to make the real tool for production, maybe you need twelve cavities, so that every time that machine cycles you get twelve parts out of it or 24. You have to evaluate that based on the volume you are going to need to produce, but you can make a prototype tool and there are a lot of good cases for why you might want to do that.
Here’s another question, “Can you know if the price you’re quoted for a sample or a prototype is the real cost of it?” This all comes down to communication and relationship with your vendor. I have experienced many times where you have a product that you’re going to buy FOB China for $12 a unit and you need a sample made and the factory is going to charge you $500 for a sample. It seems like that’s a lot of money. Does that make sense? It may or it may not. It all depends on what it is that they need to do in order to provide you that sample, especially if it’s a new product that hasn’t existed before. I would recommend you ask a lot of questions and try to open up those lines of communications and say, “I’m maybe fine with spending $500, but I want to understand why.”
I’ll give you an example. I’ve had it happen where in order to make a sample, there’s something custom with our unique logo or our clients’ unique logo on this product and the sample needs to have that. The factory didn’t have a good way to make a one-off sample of that logo. It was a metal stamped and printed embossed. We agreed to pay, in our case, $300 for the samples. It seemed like a lot, but we agreed to do it. Later when we got the sample, the factory got the logo wrong. There were some English language spelling errors on the logo, which surprised the heck out of us because we provided them the artwork exactly for what it needed to be but for whatever reason, some words are spelled wrong. When we asked them to redo it, they admitted that they used the sub supplier in order to make this stamped embossed metal part with our logo and then printed on it. In order to get them to make one, they had to order 250 of them. This is why our cost was about $300 to get it made.
Only after evaluating post-mortem situation did we learn unfortunately they made 250 now that are all spelled wrong because they didn’t make one and have us review it and then we said, “You spelled it wrong,” and then they make one more. They made a bunch of them. That was unfortunate because they were all wasted. They had to be recycled. Especially for any product that we’re going to prototype, we ask a lot of questions of the factory and try to get to all the details and make sure we know what’s happening, but despite your best efforts, sometimes you can get surprised a little bit. It gets with experience and asking a lot of the right questions and even those of us that have the best experience in the world, sometimes things will still surprise you, so you have to always approach it cautiously and ask a lot of questions. Sometimes you can know exactly what the price is and why things cost, what they do to get the samples, sometimes you cannot.
Last question I have here is, “Should you have the factory make a prototype or an independent model shop make a prototype?” This is a business decision. It depends on your situation. If your product is protected in terms of intellectual property or already have copyrights, trademarks or patents filed, then I see nothing wrong with having a factory, whether they’re in the US or in another country making your prototype or model for you. The advantage of having a factory do it is they are going to be making it in production and understand all the issues regarding the reality of manufacturing the product. Their samples are probably going to be most accurate to reality for production.
There may be other situations where you have something new and proprietary you’re developing and you may not want to show it to a factory yet. Maybe you haven’t filed for patents yet, although I would recommend being very careful and consulting an attorney. I’m not an attorney but consulting an attorney before you go and have a third party make a prototype or samples for you on something that hasn’t been filed for a patent or a copyright or anything, whatever intellectual property protection might apply, but there are different business decisions and reasons why you might want to.
One of the best ones for not having a factory do it is keeping it confidential because it may be a lot easier for you to control and keep something quiet in a prototype facility than it is at a factory, which is maybe a lot more open to other people coming in and seeing what’s going on, people you don’t intend or want to see it. You’d be amazed. Factories give tours all the time for different potential vendors, customers, retailers, all sorts of things, so sometimes doing things openly in a factory cannot be so great for keeping them confidential.
If you have a highly sensitive item and maybe you haven’t even filed for intellectual property yet, but you’ve got to start making something, that’s where I might use not just one, but multiple independent model shops and prototype vendors and give a piece of it to each of them. None of them know what the entire product is being put together. There are advantages and disadvantages to that too, because you’ve got to make sure everything is engineered and designed properly because they’re going to give you the exact part you asked them to make. When you put them together, if something doesn’t work, you got no one to blame but yourself because they don’t see the entire picture of it and might have helped you solve a problem, but they can’t because they’re only doing a portion of it. But to protect it and keep it confidential, that’s a very good strategy that often works.
Should you use one or the other? It’s not a yes or no question. There are a lot of things that go into that decision and lot of different factors, usually business decisions more so than decisions related to the longevity of the product or the price point of the ultimate product at retail or whether someone’s going to buy it. It’s usually just business decisions and how important do you want to keep it confidential and do you not. Then there are costs also, doing it close to you. Maybe if you’re a US company, doing it in the US might be an advantage because you could drive down to a local model shop and see how things are going. They can ask questions you can answer, but it’s going to be a lot more expensive. Other times, prototyping in Asia is so inexpensive. Maybe you have to do two or three generations or prototype before they get it right and you’ve still spent a third of the cost of what it would be in the US to do it. There are a lot of pros and cons and options to weigh. I don’t know your particular situation for why you asked that question, but that’s something we can always talk about in a one-on-one at some point if you’re interested, and certainly you can do that through the membership site.
With that, I’m going to wrap up this Office Hours session. I encourage you to check the schedule for upcoming Office Hours and if you’re all able to participate live, please do because I will take questions live and bring you on and let you answer them for other people to hear. I’ll be happy to address some issues more specific to you and help. I hope you enjoyed these Office Hours. Please give us feedback on them. We would appreciate that. We always want to make these better and more appropriate to you. If you have different subjects you would like to hear in different areas or any questions, write in and let us know and we’ll be happy to address them and make this a little more focused to something that’s going to be helping you move your business forward today.