Product Development Process: An 8-Step Guide to Bring Ideas to Market (2025)

For John Thorp and Buzz Wiggins, founders of portable water carbonation system Aerflo, there was a gap in the market for carbonated water lovers. “As we looked at the options that they have—single-use or countertop systems—we just felt like they were both lacking,” John says on an episode of the Shopify Masters podcast.

Inspired by the soda siphon on John’s dad’s bar cart, the two set out to create a more eco-friendly, space-saving version that could keep up with the demands of carbonated water consumers. From conducting hundreds of interviews to creating a few prototypes to figuring out postal logistics, it took five years to develop the Aerflo System.

Even the most successful ecommerce businesses rarely get from idea to finished product in a straight line. If you’re just starting out, you might be wondering: How do you turn the product idea in your head into something customers can buy?

This guide breaks down the product development process and shows you exactly how to bring your idea to life.

What is product development?

Product development is the process of taking a product from idea to market. It encompasses both creating brand-new products (known as the new product development process, or NPD) and making improvements or updates to existing products. The process can include:

• Designing the product
• Creating a product road map
• Conducting market research
• Launching your product
• Collecting customer feedback

The process brings together many parts of your business, from design and engineering to marketing. Larger companies often have product managers or product development teams who set them up for success with a product development strategy.

The 8-step product development process

1. Generate an idea
2. Sketch your product
3. Validate your product idea
4. Create a prototype
5. Source materials and production partners
6. Calculate your unit economics
7. Beta test your product
8. Iterate

While product development varies by industry, these eight stages form the foundation of bringing any product to market. Here’s how to use this framework for your product:

1. Generate an idea

Don’t wait for the perfect never-before-seen product idea to strike. Many successful products build on existing ones. Try the SCAMPER framework for idea generation:

• Substitute: Replace materials (like faux fur for fur)
• Combine: Merge products (like a phone case with a battery pack)
• Adapt: Adjust for new needs (like nursing bras with front clasps)
• Modify: Improve design (like sleek electric toothbrushes)
• Put to another use: Find new applications (like memory-foam dog beds)
• Eliminate: Remove elements (like cutting out intermediaries to reduce costs)
• Reverse/rearrange: Change perspective (like switching from plastic to glass food storage)

Take Lindsay McCormick’s story. She founded toothpaste tablet brand Bite in 2017 by modifying an existing product. “When I started looking into toothpaste and the way it comes in a plastic tube—and there’s a bunch of harsh chemicals, artificial flavors, ingredients that come in it—I thought, I could make something that’s better for the planet and better for our body,” Lindsay says on an episode of the Shopify Masters podcast.

Source: Bite

Pinning down your target market, the value of the product, and your approach will help you decide what type of product development strategy (such as market expansion or diversification) makes most sense for your business.

2. Sketch your product

With your idea in hand, it’s time to map out what your product will look like. It’s useful to create a draft that lists all components, whether your product is physical or digital, and any necessary features to inform your sketch. Don’t worry if sketching isn’t your strength—you can hire a technical illustrator through platforms like Dribbble or UpWork.

A sketch lets teams better visualize the product and make suggestions before investing money into prototyping. Sketches can also help you illustrate your product when you reach out to customers to get their opinions.

3. Validate your product idea

Before investing too much time and money, make sure your target market wants to buy your product. Product validation helps you analyze both functionality and market fit. Try these validation strategies:

• Send online surveys to potential customers
• Start a crowdfunding campaign
• Do test marketing
• Research market demand
• Study your competitors
• Run a feasibility study

Ask yourself how your product fits in the market:

• Does it expand an existing category?
• Does it disrupt a category?
• Does it create a new category?

If you’re considering adding a new product as part of an existing business, run a business analysis. At the business analysis stage, you’ll assess how your new product strategy fits in with your larger business strategy.

Finally, conduct a competitive analysis. Look closely at your competitors to understand how they attract and sell to customers. Ask potential customers what they like and dislike about similar products to find your competitive advantage.

4. Create a prototype

Prototyping means crafting a finished sample before you start mass production. Consider whether you need patents to protect your design.

You can try to create a DIY version of your product, find a third-party prototyping supplier or engineer, or create a 3D-printed version. The team behind Aerflo started with a DIY version with whatever they had on hand, such as a bike pump, a water bottle, epoxy, and a pressure gauge. This helped the duo see that the idea was worth pursuing.

Buzz and John then turned to outside firms, which didn’t result in success. After starting from scratch and iterating several times, they understood how their product worked and what they needed. They hired full-time engineers who helped them refine the product and make it scalable.

Just like John and Buzz, you’ll likely make several versions, making improvements on each version until you have a final sample that you’re happy with.

Test your first usable version (your minimum viable product) with a small group to:

• Gauge interest
• Test pricing
• Collect user feedback for improvements

5. Source materials and production partners

After finalizing your prototype, build your product’s supply chain by finding manufacturers and suppliers. Here’s how to find the right partners:

• Get samples from multiple suppliers and compare quality and costs
• Test samples from potential manufacturers
• Gather quotes
• Weigh local vs. international sourcing options
• Plan your storage, shipping, and warehousing needs
• Communicate your needs

When Kindred Label founder Cassidy Caulk started looking for a manufacturer for her foldable sandals, she had zero experience working with factories. “That whole beginning stage was very nerve-racking,” Cassidy says on an episode of the Shopify Masters podcast. “But you just have to really believe in the product you’re making and you will find that right partner along the way. It might take some time, but you will find them.”

Cassidy interviewed five different factories before finding the right fit: a smaller family-owned manufacturer in Portugal that was up for the challenge of creating an entirely new type of shoe.

6. Calculate your unit economics

With your production partners in place, figure out how much you can make per unit sold. To figure out your break-even point and how to price your products, you must understand your costs.

Start by calculating your cost of goods sold (COGS), which includes:

• Raw materials
• Factory setup
• Manufacturing
• Shipping
• Import taxes
• Other direct production costs

The COGS helps you determine the gross profit on each sale, which can help you set your price and keep healthy margins. Note that COGS are just your production costs—you’ll have other operating expenses like overhead and marketing to consider, too.

Once you know your costs, develop your pricing strategy. Successful strategies look at market trends, business costs, customer preferences, and company goals. For example, a new brand trying to break into a market might opt for a penetration pricing strategy, where it introduces a product at a low price in an attempt to gain market share. Later, the brand will increase prices.

7. Beta test your product

Before a product launch, you can soft launch with a segment of your target audience. They’ll be able to give you feedback before you go public.

You can tap your audience based on specific criteria, such as age group, and ask them to test physical products. You can also partner with influencers in your niche who have an understanding of the market and how similar products compare. If you have a digital product or software, you can find testers by signing up for beta testing sites like Beta Testing.

Skin care brand Dieux offered free samples of an unreleased product, Barrier Blanket, with purchase of its Instant Angel moisturizer and encouraged users to share their feedback.

8. Iterate

After a product launch, it’s necessary to continue iterating to provide your customers with the best possible option. Ask customers to fill out surveys and ask about their experience with your product. Use social listening tools to learn what customers are saying about your products. You can also look at reviews.

All of this information can help you build a better product, which is why the process is sometimes known as the product development cycle. You can think of product development as a continuous journey to meet customer needs.

Tips for launching your product

You’ve created a product with market appeal that can turn a profit. Now it’s time to introduce it to your customers. Here’s how:

Build your branding strategy

Branding touches every part of your business, from your story to your pricing strategy and product quality. Before you launch, create core messages that tell your product vision and story and show customers why they should buy.

Choose your timing

Pick your launch date based on seasonality, consumer trends, and market conditions. Looking at market reports and tools like Google Trends can show you when products are more in demand.

For example, bathing suits see a spike in searches during the summer months. If you’re launching a bathing suit, you may want to do so in the spring to capture rising interest.

Create content

Launching a product means you’ll promote it through SMS, email, social media, and affiliate marketing partnerships. To be ready for launch, you can create a backlog of content, such as how-to videos and behind-the-scenes blog posts, to give your audience more information about your product and help them feel connected to your story.

Product development examples

• Bola Grills
• City Seltzer
• Brightland

Every business owner’s product development journey looks different. Here are some real-world examples to inspire you:

Bola Grills

Bola Grills founder David Levy wanted to create a grill that wouldn’t pull him away from his guests, so he designed a tabletop version. He focused on key features like proper charcoal airflow and heat-safe technology to protect tables.

College students helped build his prototype, and a crowdfunding campaign proved his concept, raising $22,000 and selling 94 grills.

Then David hit a roadblock: His manufacturer wasn’t working out. “After about the fifth sample that they sent me, I made one of the most difficult decisions of my life,” David says on Shopify Masters. “And that was if I wanted to pull the plug altogether or push through and find a new manufacturer and basically start over.”

David chose to start fresh. His persistence paid off, and he launched his finished product just in time for barbeque season.

City Seltzer

Sometimes great products start by accident. When Dominion City Brewing hosted a beer festival in 2020, it sold creamsicle-flavored seltzers to help keep customers hydrated between beer tastings.

“Afterward the feedback was all, ‘That was great. Where can I get more of this orange cream water?’” City Seltzer cofounder Josh McJannett says on an episode of the Shopify Masters podcast. “That gave us an idea that maybe there was more to this than just tempering people’s beer consumption.”

Josh’s team already had brewery production equipment and distribution networks. They created distinctive, brightly colored packaging and started selling at local bars and restaurants before moving to direct-to-consumer sales.

Brightland

Aishwarya Iyer started Brightland after noticing an opportunity in the olive oil market: No one knew where their olive oil came from.

“Everyone stands at the grocery shelves looking really confused—this was back in 2016 and 2017—and I was like, ‘Wait, there’s got to be something here where we can build a brand that people feel really excited by, that people want to put out on their countertop,’” Aishwarya says on an episode of the Shopify Masters podcast.

She dove into product research: taking UC Davis Olive Center courses, reading extensively, and talking with farmers. This helped her create a product that not only tasted great but supported local farms and brought transparency to the industry.

Aishwarya also developed smart packaging: white UV-protected bottles that look beautiful and keep the olive oil fresh by blocking harmful light.