Engineering


Will the product be licensed or sold directly?  Will it be made in the US or off-shore?  Will its features be basic or high end?

Whichever the response, the product’s “perceived consumer value” must be in line with the suggested retail price (SRP). The SRP versus “costs of goods” (COGs) must meet or beat standard industry margins and must have a multiplier factor of at least 5 x 1 and often as high as 6 or 7 x 1 if promoting on television or selling through home shopping networks is the goal.

Determining or estimating the COGs is directly related to what occurs during the initial engineering stages thru feature selection and specifications. The factor of course varies according to industry and category, but knowing and understanding this factor is a must. Know the market your product will sell in, know who the direct and indirect competition is and know what intellectual property you can incorporate and can not.

Product Engineering has many facets ranging from mechanical, electrical, optical, lighting, structural, materials and processes and some or all may play a role in developing a product, machine or system’s features.  These many facets make up the product engineering and the features should be selected or left out to accommodate the product’s desired positioning in the market place, driven by open spaces of competition or enhanced aspects of function or benefits. Features, whether required or just wanted, must be determined and calculated to either enhance a product’s value and longevity and are directly related to the costs of goods. Specifying certain parts and materials for certain features has everything to do with the costs of goods of the item being developed.

Likewise, the frequency of use a product has will determine the required repeatability and degree of durability which are also both essential factors to derive the product value and product life cycle. Is it a consumable or durable product? It is critical to understand your product position, market and where the product will be sold. If too many features are integrated into the item, costs go up and may exceed necessary margins one must have to be below the perceived value of the product price to the wholesaler and or end user.

Is the product used in an inside or outside environment? The environment the product is to be used, packaged and stored once set aside or not in use may often carry in it self an independent set of specifications. Humidity, temperature, stress, vibration, UV and other natural forces of wear and tear must all be defined and accounted for.

Posted in: American Innovation