I run a small design firm and want to take a general survey of what the industry is charging for ID for various products so as to get a feel for how our fees compare. Estimating has always been the toughest part of doing projects as it is hard to guage it.
I think by doing this survey we can keep all IDers closer in line with some sort of industry norm. I’ve listed some common products we are working on and would like a general overall fee in US dollars for ideation, 3 concept options, and final design up to 3D surface CAD deliverables and Alias renderings for
PDA
Computer Bezel
Toilet Seat
Plastic Storage box
Cell phone
Portable DVD drive
Handheld blood pressure monitor
TV remote control
I have found that larger firms are in the $30K and up range per project with many in the $60K+ range whereas smaller one man shops and small design firms start losing projects when they charge over $10-$20K per project. Is this what you have found as well? I know a lot of it has to do with the size/status of the client too… Just want to compare and contrast using a total fee aside from an hourly rate.
OK this was what I charged for these projects from concept thru 3D Surface CAD and renderings, models were extra. How does it compare with what others are charging? I am a one man shop but have an office and some overhead and sometimes hire freelance help.
Anyone care to compare and contrast?
These are overall prices I charged in the past year.
one man shop. no office. some overhead and sometimes hire freelance help.
i deliver anywhere between 6-10 concepts on average. refine to 2 or 3. make fast 3D surfaces in Maya or Pro. send out to modelshop (client pays direct). final design chosen. usually combine and tweak into final concept. final concept sketch. Pro/E solid model with draft but no claim of toolability. cg renderings in Maya. working toward product animations now.
rough estimates. most cost in first two phases. CAD is low-rate.
PDA …US$10-15K
Computer Bezel …US$5-7K
Toilet Seat …US$8-12K
Plastic Box with built in flashlight …huh?
Cell phone …US$12-16K
Portable DVD drive casing …US$8-12K
Handheld blood pressure monitor …???
TV remote control …US$7-8K
i’ve done PDA’s, remotes, plastic box with accessories. PDA on my site was $3k rush job. but had only 2 years exp and company was a start-up.
Looks like I am charging a bit more but it has been hard to justify keeping an office when things are slow. Maybe I go mobile and forget the nice office and drop the rent but it does look more “impressive” with a space for clients to meet in.
May I ask what part of the country you are in? I am in California where housing and expenses are ridiculously high and I currently have 10+ years experience.
So far my deliverables have been up to Surface 3D CAD with ME and tooling handled by the client’s vendors.
East Coast high rent area. i lived in SoCal. similar costs. 10+ ID also. plus several years engineering. cant justify an office. but your prices seem typical. i just undercut most US firms. dont want to lose too much work to low-cost designers overseas.
Yeah I lost a few clients to manufacturing companies that bundle the ID in for free. The thing is the ID they get from their overseas factories is “crap” but some clients don’t know “crap” if it hit them in the face so they accept it and we are out in the cold. It is a disturbing trend where design is undermined in the process of getting a freebie.
hear ya. only been solo for a couple years. did some concept work for a big U.S. company. low-balled the 3D quote. they still took it to China. that was last year. turns out they cancelled the project on account of the vendor doing a sh*t job of the design.
they saved like $5k. wonder how much they wasted? and my rep is solid. they know i would have delivered exactly what i designed and what they wanted. thats life.
forgot to ask. you getting more OEM inquiries? i am. but i dont much like corps setting up the rules. where do the designs go? thinking some corps are asking OEMs to compete since its an easy way to get free design. bad trend.
Yup lotsa OEMs in Asia doing or wanting ID now but they aren’t used to paying US fees. This trend is bad for ID, terrible for ME guys as ME is often bundled into production and cost is amortized thru unit sales of the production contract. Some factories tell me they are sometimes doing tooling for free to secure the project and only make $ off the per unit cost. Sheesh too many people working for nothing is killing everyone in the end and the corproatations hiring make all the $$$ off all of us small fries trying to stay afloat of undercutting eachother. Kind of sad.
This is why I am asking for a survey. I think we need to set some standards somehow so that we don’t cut eachother out. I feel I start losing peojects once I go over $15K yet some clients are willing to buy into the hype and pay big firms $60k - $100K only to have lowly junior guys or interns work on it. Smoke and mirrors!
seems like screwing up is one way to make $$ off design. The lousier the design, the more they can charge clients to fix it. Hahahah. Maybe we should suck more and get rich. Seems like clients hire bad designers only to pay them more to fix the mistakes.
You guys should consider that you’re asking too little and not offering enough! I’d argue that to survive in the 21st century globalized design market, you need to offer integrated strategic design services, not just “art to part” services.
In other words, offer innovation and prove the value of design to the bottom line… don’t just exist to fill the styling gap.
At the very least I would bundle front end research and iterative prototyping which would easily double those quotes, but reap huge cost savings and potential revenue gains at market.
Eventually you may need to consider offshoring the very things you consider your core offering today: the commodities like Engineering, CAD modeling (and yes, maybe even “ideation.”)
Just keep an open mind and remember the goal of your client (which may be very different than what they think they want, or what they’re asking you to do.)
I have a couple of clients who singed on for research and innovation and we did show value on those cases but most clients just say “we don’t need that” and totally reject it in the quote and when I try to bundle it they take it out and expect me to lower my cost because they “took that phase out.”
didnt say research wasnt offered. or done. i get calls to talk to engineering teams. and requests to attend brainstorms w/ no design work. just following the guidelines set down by the original question for jobs that are basic art-to-part. most of us have heard the Strategic Design spiel. and use it even for basic jobs.
my CAD rates are cut rate btw. most of my quote is in the front-end as stated (the research/ideation phase - they can offshore grunt work, but good ideas are still worth something).
cg, what are your numbers? using the basic process (no multi-months-long research).
ykh–you said it, your CAD prices are “cut rate.” Remember that thread about the overseas CAD-jocks using pirated software and selling their files for 1/10th the going US rate? Can you be “cut rate” against that?
Think about what happened to print-design with the advent of the desktop publishing: the field split into desktop publishing and more traditional design (meanwhile the typesetters were shown the door.) Likewise I remember when people hired design specialists to make their slide presentations–today everyone just uses powerpoint without even the benefit of a low-level designer. Do they care?
I would argue that MOST (ie. the multitude of small) manufacturers that are just looking to ID to skin their parts, and they really don’t care either. They have a job to do, and they just look at you as a necessary expense because their engineers can’t sculpt. They’d get rid of you in a heartbeat if they could (and will if given the opportunity, which is exactly why overseas manufacturers are now bundling “ID services” with tooling and engineering.)
You want to make sure that you don’t become the desktop publisher of the Industrial Design world. You do that by not just offering a (necessary) service, but offering your clients strategy, leadership and innovation (whatever that might entail.)
at my low CAD rates i still lose work to overseas. i still offer it b/c i enjoy it. i enjoy taking a concept into a final form. ID is not just a job for me. its not about farming everything out and becoming a manager. i turned down those offers. i like to DESIGN. and design doesnt stop with a sketch or idea.
you talk like i/we dont offer Strategy. when has anyone said they dont offer Strategy? didnt i say i did already? instead of saying what i should do when you dont know me or my business, why not post numbers? thats what this thread is for. and the kind of job (basic ID when client says No Thanks to strategy) is described. if you want a thread for Design Strategy Fees then start a new thread.
Personally I think you both are greatly under pricing your services. I remember a Principle for one of the big boys Fitch, Joss, or HLB cant really remember now, gave a formula for figuring out pricing at a lecture on design management I attended about 3 years back. It basically said the design should be @ 5% of the total sales margin for the first 5 years.
Just finishes a PDA for military/extreme use areas.
Phase 1 Market/Consumer/Materials/Technologies Research $50,000
Phase 2 Initial concepts (Photoshop renderings of 10 concepts) $20,000
Phase 3 Concept Refinement (Photoshop Renderings 5 concepts) $10,000
Phase 4 Design Development (Initial CAD, manufacturing review) $40,000
Phase 5 CAD Finalization (finalize CAD for 2 concepts) $20,000
Phase 6 Initial Prototypes (functional) ($100,000 including internal electronics and customized pc boards. billed to client by prototype company)
Phase 7 Consumer Validation Focus groups (4) $50,000
Phase 8 final modification FEA, UL, MIL testing and refinement $20,000+ 3rd party costs
Phase 10 tooling release and documentation $5,000.
You are the expert in design, make the clients see the value in design. Under pricing only cheapens the field of ID, and drives more firms out of business. Show the value to the client, and you will soon be seen as an advisor not a vendor.
Agreed–this is a much more rational way of breaking it down in business terms.
I would tweak the phases to make it “spiral” rather than linear, meaning add a recurring iterative design research phase during the concepting. The more iterations, the tighter the spiral until an exit point is determined by some criteria (ie. 2x superior to competitor at same cost etc…) This would also effectively eliminate “validation” research at the end of the program.
In terms of selling design, there are several ROI benchmarks I’ve come across:
Every dollar invested in ease-of-use returns $10-$100
Systems designed with usability engineering have typically reduced time needed for training by 25%.
UCD cuts errors from 5 to 1%.
ROI in usability is typically 200-800%
Average % of development budget required for usability is 2.2%
Key cost metrics fall by 10%+ (support calls, repetitive tasks, etc.)
Conversion ratios (sales) increase 16%
$120,000 for that is too much imo. thats value of design? could do 10 of those high-price projects in a year. doctors dont make that kind of money. gotta save someone’s life doing ID work?
maybe big design firms can charge big fees. not many freelancers and one-man shops. i may undercharge. but plenty of firms overcharge. that also gives ID a bad rep. and it makes companies look overseas which is worse imo…
Your fees look like what the IDEO’s, Lunars, Frogs charge but as a one man shop I start losing projects when I exceed $15K - $30K total range. I never got paid more than $35K for a single design project in my career so far but I have seen others who have been ableto get $100K projects but they have 20 years experience and have copntacts to major Fortune 500 type clients. PDA’s seem to be around $15K - $25K range total for a guy like me. 10+ years experience, one man with office in California. I’d liek to do $65K but i don’t think I can get it and would lose it to other guys if I stretched it that far out.
I wish I could charge what you list but realistically I wouldn’t get the project if I did as most cliens who come to me are not major companies. They are mostly start-ups or small to medium companies who can use a low cost freelancer if I go too high.
Perhaps ther is a fomula we can use as standard? Maybe even consider doing our fees with a royalty on net sales percentage? Maybe that would be one way to steer the business model in our favor?