What are the design costs?

These and 6 other frequently asked questions (FAQ) are of great interest to our customers and clients.

1. What are the design costs?
2. -> Design rights – who owns the design?
3. -> What risks does the designer bear?
4. -> How can the quality of the design performance be measured?
5. -> For whom does a design agency work?
6. -> How does a design project work?
7. -> How do I start a design project?

Even though generations of designers already had something different to say on the topic, for example – “What is the price of no design?” or “Good design is ultimately more cost efficient than bad design”, it is clear to us that many customers see the price they will pay as a very important criterion. Although the powerful effects of design have been proven thousandfold already, many clients are still unsure about the cost-issue.

The price or the customary fee for a design project mostly depends on the effort put into it. It doesn’t matter if the design is meant to generate lots of revenue or only appeal to a small niche. Most designers, us among them, are paid “according to effort”, the detailed sum being subject to the complexity of the task and the thoroughness with which the design process is to be conducted.

Product design after all is about introducing novelty to the market, so the creative invention design is worth investing in. The following text lays out exactly how important it is to invest into design and what is at stakes.

Factor #1: COMPLEXITY

It is self-evident that more complexity equals to more effort for the designer. A greater number of single-parts, variety of versions, a large number of competitors that need to be considered, a bigger development-team, many stakeholders, the number of necessary feedback-meetings… all of this leads to more complexity, more time consumption and more effort for the designer – and therefore a higher cost for the client.

Factor #2: SIMPLICITY

“Everything should be made as simple as possible, but not simpler”

This beautiful quote, attributed to Albert Einstein, demonstrates another challenge when the effort put into a design project is to be assessed. Simplification of the shape, the usability, the production process – all of them are proof of excellent product design but are paradoxically accompanied by much more effort. Simplification asks for effort. It is tough work, usually overlooked when the end product is on the table because it appears so natural. Even though it seems counter-intuitive, simplification comes with a price.

Factor #3: SAFETY

At the first glance, the relationship between safety and effort may not be very obvious either. It becomes clearer when we take a look at goals of design development – success on the market. Success must be secured (and protected) from competitors as far as possible.

Although this is never 100% possible, what helps is extensive research and analysis, a careful consideration of diverse versions and alternatives, as well as thorough verification via employment of simulations, models and prototypes ultimately leads to a decreased risk of failure. This factor indirectly includes creativity, since the novel and more creative design solutions need a deeper analysis of the potential position on the market.

In order to get a glimpse on only the prototyping process and the costs involved the following article should be of use.

So, in short, costs rise with:

The complexity of a task
The degree of simplification
The demand for the safety of the outcomes
The degree of creativity and innovation

What is then the price of design?

Even though the clients almost always want to have a cost assessment in advance, even when it is only a rough estimate it should be understood that many times these facts are not known during the first negotiations about the end products. It is, however, possible to give relatively accurate fees through comparing similar projects. We go even a step further and have a list of the most wanted design services. Nonetheless, if you chose design professionals the first accurate assessment of the customary fees follows only after a week or two into the design process.

What is the design service manual and how does it relate to the cost of product design?

Many design agencies are reserved regarding the topics of price and customary fees. However, there is a growing number of agencies who are becoming more transparent about their offers and examples of prices one could expect. The design service manual is comparable with a menu in a restaurant. It should offer a good overview, allow for understanding the price categories and spark an interest in trying the service.

For example, in our design service manual you can find a multitude of established design procedures that are all coordinated like in a modular construction system. The separate modules are to be combined with each other. You can also find information about hourly and daily rates that can be used to define the customary fee. (You can ask for our service specification list which is simple and cost-free by sending an e-Mail to inquiry@wilddesign.de)

Fixed rate, price guide or hourly rate for product design

In most cases, the design procedure will begin with the basic exchange of information that allows for establishing a specific cost proposal. If your idea is clear and allows for specific planning a designer could offer you a fixed rate. In the case that your goals and ideas are not specified a designer would have to do an analysis and a study which would explore the feasibility of your project.

This serves as a security for both parties, it protects from risky or undefined cost calculations. In big projects, usually the first phase will be binding or be under a fixed rite, but the rest of the steps would be defined through a price guide. Rarely would a project be priced on an hourly rate, or without defined service specifications.

Design seems expensive – is there a way to reduce the price?

When prices are compared, there are obvious differences between providers, even in the case when the task is identical. It is very rare that the prices are different based on the hourly rate, this only happens when one compares the professionals with the amateurs. The distinctions are based mostly on diverging assessments of complexity and safety requirements of the task itself – eventually there is the question of risk for both parties, providers and customers, for example the risk is higher when the complex task is categorized as simple.

What helps is the detailed assessment of the starting position or a comprehensive discussion about the customer’s wishes and components of the service wanted that could be modified in such a way to reduce the cost of design.

Discounts & Co?

There is always a way for a designer to work with the budget a customer has designated for the task. If there is a need for more than one project and the cooperation is going to be longer designers can offer a bulk discount or a retainer-discount based on the longevity of the work. Some design agencies, especially in the graphic design niche split the costs into performance based and usage based pricing, as AGD is suggesting (to read what performance based pricing is, among other types of pricing systems read…

If you want to have a limited right to use the product or service you can count on a decrease usage fee, which means that you will not have all the ownership rights over the design product. More on the AGD Web Page.

Design-costs are not an easy topic

…there are different ways to your goal. What are your experiences? Write to us in a short comment. Ask us, if you want to estimate the projected costs of one of your jobs better.

This is one of 7 frequently asked questions (FAQ) that are always met with great interest by our customers and clients alike. If you want to find out more about the design process check out our previous posts or ask us in the comments!

Check out our other design process related posts:

As client, what rights do I have?

What risks does a designer carry?

How can the quality of such a service be measured?

Who does a design agency work for?

How does a design project happen?

How do I start a design project?

Do you have some more detailed questions concerning design process? Let us know in the comments and we will answer shortly! And don’t hesitate to ask us for a (FREE of course) estimation of your design project cost!