How Product Development for Ecommerce Brands Works

Codi

There’s a lot that goes into creating a successful ecommerce brand (like a fulfillment strategy, effective marketing, and navigating 3rd party sales platforms like Amazon). However, there is a key element that our team often sees businesses forgetting which is crucial to long-term brand building: product development and production. 

EcommOps has seen even seasoned ecommerce brands hit major roadblocks and challenges when they realize that they need to customize an existing product (or when they see a market opening for something entirely new). In fact, it’s not uncommon for clients to come to us and have no real understanding of what the general steps of product development and mass production are when it comes to developing and producing a brand-new product

Fortunately for you, EcommOps is here to help! Our team has helped dozens of businesses make their way through the production process for products, all the way from helping them understand what to look for in raw materials and components, all the way to prototype samples and mass production. Our CEO founder and CEO, Dayu Yang, has personally gone through the process to develop, pitch, and mass produce a novel learning toy (called Codi). 

Codi robot ecommerce product


In this article, we’ll talk about the general components of most products that businesses need to consider when they’re looking to be more involved with production. We’ll also review the typical production process, including mass production, and why your business’s involvement in producing your own products is a little different than when you are sourcing common items for new and unproven ecommerce stores. 

Key points:

  • General components of products 
  • Typical production process
  • Why production for common dropshipping products is a bit different

General Components of Mass Produced Products

First, let’s take a look at the general components you can expect in most products you source directly from a factory. It’s important to remember that the specific components you need will vary from product to product, so it’s best to use this information as a general guideline. 

Non-Electric Raw Materials

Non-electric raw materials are one of the first components you consider when developing a product. Examples of this kind of raw material includes:

Plastic resin optional raw material for product development
  • Fabrics
  • Plastics
  • Metals

Essentially, if your product is “made out of anything,” those are the raw materials you need to consider. How many different raw materials you have will vary (for example, a simple product like a t-shirt may only have one raw material, while complicated products like electronics will have multiple raw materials). 

Keep in mind that raw materials can vary…a lot. If your product needs “plastic,” you need to consider what kind of plastic you need. Are you able and willing to pay more for a higher-quality plastic, or are you able to make the product you want with less expensive, but still reliable, plastics? This variety exists in most raw materials, so keep it in mind when you start component shopping. 

Electrical Raw Materials

If you’re making an electronic product, then you need to consider the electrical raw materials as well. Different types of electronic raw materials include silicon, metals for wiring, and any other raw material directly related to the electronic function of your product. 

Generally, a separate factory makes your electrical raw materials (including chipsets), and that factory ships those raw materials to an assembly factory where your product is completed. Unlike with non-electronic raw materials, it’s rare that you’ll need to be concerned with managing raw materials for electronics (usually, a factory will source ready-made electrical components with possible slight customizations for specific needs). 

Electrical components raw materials for product development

In the event that you are involved in managing electrical raw materials (like developing custom chipsets), you should know it’s an enormous undertaking. It adds a massive and complex step into the supply chain, and it’s rare that this kind of undertaking will be worth it for you and your business. 

Electrical Components

Next, electrical components are an important part of many ecommerce products, and they include all kinds of product parts, including:

  • Chipsets
  • Batteries
  • Speakers
  • LCD or other digital screens 

As we mentioned, electrical components are usually ready-made (though you may be able to customize them slightly). From there, brands work with factories to see how these components can fit into their products, and how difficult this is will vary from product to product. For example, lithium ion batteries go into all kinds of products and typically don’t need to be customized or adjusted at all. 

Firmware

For electronic products, firmware is another component to consider. Basically, your firmware is whatever software your hardware components are going to run. While most jump to “apps” or “computer products” when they hear software, firmware exists even in very simple electronics. 

For example, if you sell an electric toothbrush, something has to tell it to turn on when the power button is pressed. If you plan on your product connecting to apps or other devices via bluetooth, firmware is the key player in making this possible. 

It’s possible for you to develop your own firmware for an electronic product, though firmware development is generally outsourced to a “solutions” provider that is connected to the factory. 

App software to support products and brand development

App Software

Not all electronic products will have an app (again, firmware is far more common and much simpler to implement). However, if your product does use an app, you can expect app development to be completely separate from production. You can also expect it to be expensive to develop and maintain.

However, it is possible to create a separate app for a product you want to sell. This is easier if it’s built around the foundation of something already existing (though if it’s a Chinese product or app, you need to make sure that localization is done correctly. English grammar could be awkward or flat out wrong, and the UI may not be developed for a western audience). 

For best results, you should either get the factory and app developer to cooperate, or you should go straight to the developer and build the app from scratch. 

Tooling

Tooling is a general term that describes the manufacturing components and machines used to make the different parts of your product for assembly. Examples of coming types of “tools” include:

  • Injection molds for creating plastic parts
  • Patterns for cutting clothing
  • Dies for stamping patterns and different shapes
  • Laser machines for engraving

We’ve provided a number of different production tooling objects that are common in general manufacturing:

Production tooling for mass production of ecommerce products

Production tools like these are literally components in your products, anything that’s part of tooling your product is what literally makes your product. That means that the quality of your tools is extremely important (bad tools mean bad components, which means a low-quality product). Tooling quality issues aren’t easy to fix and usually require expensive upgrades or full-blown replacements. 

Making high-quality tools on the first go is important, because production tooling can be very expensive. You should expect anywhere between $10,000 – $100,000 in tooling costs for most consumer products. If you’re planning on creating a complex product, know that means you’ll need more tools for more components, which increases the overall development cost significantly. 

Customizing an existing product (as opposed to creating a brand-new product) can be significantly less expensive (because the tooling costs will be much lower). If you plan to follow this route, be sure to thoughtfully (and selectively) consider which components need changing and invest only in the new tools needed for the customizations.

Packaging and Manuals

Businesses often forget that packaging and manuals aren’t something that come with your product. They will be seen as part of the product itself by consumers. Packaging and manuals are crucial in driving a positive impression for your customers, since packaging and manuals are usually the first impression customers will have with your product (and potentially your brand). 

Packaging for shipping ecommerce products

When thinking about packaging, remember that packaging that’s optimized for retail display may not be a good option for international shipping, so you may end up with multiple kinds of packaging for the same product (which is very common). Two solid factors to keep in mind when developing your packaging for international shipping are:

  • Hard and/or sturdy: If possible, you want to avoid packaging that needs protection during international shipment, which makes hard packaging (or packaging that holds its shape well) excellent options. 
  • Light and compact: The lighter and more compact your product is, the less shipping costs will be. This is true for both courier delivery when using China fulfillment, as well as traditional bulk sea freight shipping to a domestic warehouse. 

Typical Development for New Products

Now that we’ve reviewed the general components to consider when developing a product, we can take a detailed look at what the product development process looks like when creating a brand new product. We’ll be using the product development process of Codi, a learning toy developed by our CEO Dayu Yang, as a real-world example of this process, from initial design, to prototyping, to mass production. 

It’s also important to keep in mind that the development process is product specific, so remember that this process will look a bit different when you decide to develop your own product. 

Product and Industrial Design

Any product, regardless of how complicated or simple it is, starts with a design. These designs typically start with rough sketches, and as the idea for the product becomes more refined, 3D models are drafted to further flesh out the product. 

Below, you’ll see concept sketches and 3D renderings of Codi during early development.
  

Product development schema and specifics

For more complicated products (especially electronics), this initial design phase will include an industrial design. An industrial design ensures that the actual specifications of the product can be achieved during production (for example, that a product has enough spacing in the housing to fit all components). 

Sketches and industrial design plans can take time to refine, and the more complicated a product is, the longer the design phase will be. 

Materials and Component Selection

Once a design is decided on, raw materials and components types will be decided. It is very important to do a cost-benefit analysis of what level of quality is needed for raw materials and specific components because it allows you to focus on investing in what customers might care about most. 

For example, when making decisions for Codi, our team opted to use some of the highest quality ABS plastic available to make the product more durable (even though that would mean more expensive raw materials). However, our team didn’t use the loudest speakers (which helped lower the component cost) because speakers that were too strong might actually be harmful to children using the product. 

Raw Material and Component Changes

Raw materials carefully selected for product development

You may decide to make raw material or component changes when you start performing cost-benefit analysis, and many of these kinds of changes are relatively straightforward to make. Non-electronic raw materials are usually very simple to change (for example, if you want to upgrade the plastic in a product, it could be as simple as just asking the factory to use a different material without changing the production line)

The same goes for electronic components. Since many electrical parts tend to be modular, you may be able to just “swap out” one component for another, just as long as it still fits in the product’s housing.

For firmware, making changes or upgrades is more challenging but not impossible. Firmware is usually outsourced to a “solutions” provider by the factory, so any changes or upgrades end up being referred to the 3rd party (and isn’t directly handled by the factory themselves). This can make changes more complicated, though it’s usually not a huge problem to implement simple firmware changes. 

Quality Control Extremely Important

As we said, it’s often straightforward to make raw material or electrical component changes, but that also means it’s easy for factories to downgrade quality without it being obvious. You must be in a position to monitor quality control, and while most factories will partner with you to ensure that your product is made appropriately, you shouldn’t blindly trust a factory to do so (especially if the partnership is new). 

Sourcing Materials and Components

After you set the final specifications and components, your factory should start the sourcing and purchasing process. Depending on your schedule, you may not need to purchase everything at once (and you should be working with your factory to determine lead times for each component). If needed, you can stagger the purchase plan based on your target deadlines. 

In the example of Codi, its chipsets took the longest time of any component to produce, but the plastics and packaging didn’t need to wait on the chipsets. So, our team was able to produce the packaging and plastic components and store them while waiting for the chipsets to be complete. 

Tooling

 This is also the time where you will start to develop the tools you need for production. Factories often create tools themselves, though it’s not uncommon for tools to be outsourced to specialty services, especially for unusual or novel tools. 

Remember, this step is crucial. The tools and materials are what make up your product, so if your tools aren’t high-quality, your product won’t be either. You need to have your factory conduct test runs and create samples using your tools to check quality and tolerance levels. If samples don’t meet your expectations, you should have the factory improve the tools (or redo them entirely). 

Firmware for product analysis and quality assurance

Firmware Development

Ideally, your firmware should be developed by a solutions company that has intimate knowledge of the chipset being used. The code base can be very specific to how the chipset works, which means it may require specific expertise to successfully develop. 

You need to provide the solutions company with a document of specifications, and the best way to do that is to work backwards. Get the current specs of how the chipset works, determine all of the potential functionality, and then move to customize the firmware to your specific needs. 

For Codi, the chipset is based on a foundation that is used by other smart home devices. Our team went straight to the solutions company that develops firmware for other devices that use the chipset, and they developed firmware for us for Codi. 

Software Development

If you’re going to have companion software (like an app) for your product, it should be developed concurrently with your firmware (remember, the firmware interfaces with the chipset, and the software needs to account for firmware interactions). A solutions company can build your app or software, though it’s not an issue to choose a developer that specializes in app development if they have expertise that is a better fit for your needs. 

For Codi, our team partnered with western developers to make sure that our UI and UX were solid and didn’t have some of the issues that China-based app development can have for a western audience. 

Prototyping

When materials and components are settled on, the next phase is prototyping. This is where your factory makes an actual version of your product that you can see and examine. The prototyping phase is paramount because it’s the only sure way to make sure that everything works on your product. It’s also a good way to get early feedback from customers to make design tweaks. 

ecommerce prototypes product development

Your per-unit price on a prototype will also be far more expensive than your per-unit price of a mass produced item because all of the individual components have to be made at a small scale. This cost often deters businesses from a formal prototyping phase, but the benefits far outweigh the cost. Coming across a crucial design flaw during mass production is far more expensive than ordering and tweaking prototypes. 

For Codi, our team ordered a few prototypes. The retail of Codi is $125, but these prototypes cost $900 a piece:

Not only did our team thoroughly test these prototypes to make sure they worked as intended, but we also used them to user-test with families to make sure kids actually enjoyed playing with them (as well as to make sure there weren’t any design problems that would make it hard for children to use the toy). 

Fortunately, the kids loved the toy, but our team did end up changing the original button layout to make it easier for kids to press. This could have been a major issue if we hadn’t resolved it during mass production (if kids can’t press the buttons, they can’t use the toy), but having prototypes and user-tests allowed us to make design adjustments at a nominal cost. 

Initial and Mass Production

Once development is complete, you’ll start your initial runs and then mass production. The actual manufacturing of your product will end up being your fastest step (development takes much longer than the literal manufacturing in the factories). Even if you’re just customizing an existing product, you’ll want to be sure to follow these same steps. 

Even though this step is the fastest, there are still a few caveats to consider and take note of:

First Production Run(s)

You won’t start at maximum production right off the bat. Your first production run will be more limited, since you need to be looking for quality problems and making sure that the quality control protocols are firmly in place. Since production moves quickly when it starts, you need to pay attention to quality issues as they arise so you can address them without allowing problems to become pervasive. 

Quality Control

Quality control is one of the most critical steps in the entire production process, and it can be the difference between a great product and a terrible product (even if you are using the same designs, materials, and tooling). Good QA doesn’t mean no defects, though, since there are always going to be a percentage of defects in any production run. 

Instead, good QC helps to prevent defects from making it to customers. Factories often try to skimp out on QC (since they eat the cost of production defects), but any defects that make it to customers is a cost you eat. You need to make sure that the factory has a good QC plan and will follow it strictly. 

How did QC look for Codi? The first run of Codi had around 3% of the chipsets fail inspection, which were returned and replaced during the production process. Defects didn’t make it to customers, and it helped build the reputation of the product as a high-quality choice. 

Final product and scaling up for mass production

Scaling Up to Mass Production

You won’t start mass production until you make sure your first production run is as issue free as possible. This includes making fast improvements to tools to resolve defects or making quick improvements to the QC process to help prevent defects from making it to customers. However, once you’ve completed analyzing the problems in the first production run, it’s time to start mass production. 

Scaling up to mass production is no small feat. It typically means dedicating multiple assembly lines to your product, hiring more labor for more teams of workers, and it usually means longer lead times for sourcing materials and general production. 

For Codi, our team made 5,000 units in about two days on a fully scaled assembly line. Since Codi was a more complicated product, it involved several different stations with specific roles all working together to assemble the final product. 

Why Production for Ecommerce Products Can Be Different Than Selling Existing Products

It’s not uncommon for ecommerce brands to be unfamiliar with the process of developing a new product, since a lot of ecommerce involves selling products already being manufactured. Let’s take a look at why it’s different, and what businesses should consider as they move forward with a proven product winner:

Production for Common Ecommerce Products is Simpler and Quicker

Many ecommerce brands don’t develop a product just to get started. Instead, they find a product that’s already being made that hasn’t been introduced to a market, and they attempt to capitalize on the opportunity. If you sell a product that’s already been made, the most time consuming elements of the product development process have already been done, for example:

  • Sketches, designs, and raw material and component sourcing are already complete
  • Tools are already tested and ready for use
  • Businesses are essentially starting in the mass production phase

If you’re trying to source a hot-selling product, you usually don’t have to worry about MOQs, either. Factories are in constant production runs for these products, which means you often can just order the exact quantity you need with short lead times. 

For Improvements or Customizations, More Development Will Be Needed

If you land on a product winner and want to look at making improvements or customizations, then you need to consider a more formal development phase. Some considerations for even basic product improvements include:

  • Making specific design plans 
  • Sourcing new materials or components
  • Creating new tools

These kinds of changes require MOQs (because now the factory is making a specific product just for you) and longer lead times. This is why product improvements shouldn’t be approached without careful planning, and EcommOps typically advises our customers to implement improvements in stages, prioritizing the changes that matter most. 

EcommOps: China Fulfillment for New and Existing Products

Factory worker in China

Whether you’re selling existing products or looking to develop something new, your business needs an effective way to get those products into the hands of customers. You also need a system where you can quickly gather customer feedback and quickly implement that feedback into product improvement. That’s why so many businesses look to EcommOps for help with leveraging China fulfillment into their supply chain. 

China fulfillment allows you to cut out traditional sea freight shipping and shorten the lead times between the factory and fulfillment centers. This is huge for developing products, which is why our clients use China fulfillment to help::

  • Implement simple improvements into products to resolve simple problems
  • Develop new product iterations based on customer feedback
  • Expedite how quickly products can get into your customers’ hands

If you want to see how China fulfillment can completely change your supply chain (and how it makes product development easier) our team would love to connect with you. EcommOps is the leader in China fulfillment, and we offer unique benefits like:

  • A fulfillment center in Shenzhen, China
  • English/Mandarin Bilingual support
  • A full-suite of 3PL services

Fill out our online form, and our team will be in touch to create a product development plan that is a great fit for your business. 

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