Product Development Glossary: 50 Terms in Plain English

Product development has a vocabulary, and not knowing it costs money — you can't compare quotes you don't understand, and you can't spot a red flag written in jargon. Here are the 50 terms you'll actually encounter, defined the way an engineer would explain them across a workbench, with real cost context where it matters.

Bookmark this. Nobody memorizes it; everybody looks things up.

Design & Engineering

• •CAD (Computer-Aided Design) — The 3D digital model of your product. Every downstream step — prototypes, quotes, tooling — is built from the CAD files. If you pay for design, the CAD files should be yours. Non-negotiable.
• •STEP file (.stp/.step) — The universal CAD exchange format. Any engineering firm or manufacturer can open a STEP file regardless of what software created it. When you receive your design files, STEP is the format that keeps you independent.
• •IGES file (.igs) — An older universal CAD format, still widely used. Functionally similar to STEP for most purposes.
• •Native CAD files — The original editable files from the design software (SolidWorks, Fusion 360, etc.). STEP files let anyone view and build; native files let a future engineer edit efficiently. Ask for both.
• •2D drawings — Dimensioned technical drawings derived from the CAD model, showing tolerances, materials, and finishes. Manufacturers quote and inspect from these.
• •BOM (Bill of Materials) — The complete parts list for your product: every component, material, quantity, and often cost. The BOM is where your unit economics live.
• •DFM (Design for Manufacturing) — Designing the product so it can actually be produced efficiently at scale. A part that 3D-prints beautifully may be impossible to injection-mold. Skipping DFM is how prototypes that "worked" become products that can't be built.
• •DFA (Design for Assembly) — DFM's sibling: designing so the product goes together quickly. Every screw and alignment step is labor cost forever.
• •Tolerance — The allowable variation in a dimension (e.g., ±0.1mm). Tighter tolerances cost more — sometimes dramatically. Over-toleranced drawings are a classic source of inflated quotes.
• •GD&T (Geometric Dimensioning & Tolerancing) — The formal symbolic language for specifying tolerances on drawings. You don't need to read it; your engineer does.
• •Industrial design (ID) — The discipline focused on a product's form, aesthetics, and user experience — how it looks and feels, versus mechanical engineering's how it works.
• •Rendering — A photorealistic image of a product that may not be engineered at all. Renderings sell concepts; CAD models build products. A portfolio full of renderings and empty of manufactured products is a warning sign.
• •Specification (spec) — The written requirements a product must meet: dimensions, materials, performance, standards. Vague specs produce vague quotes.

Prototyping

• •Proof-of-concept (POC) — The crudest prototype that proves the core idea physically works. $100–2,000 professionally; sometimes cardboard and a weekend.
• •Works-like prototype — Functions like the final product without looking like it. Proves the engineering. Typically $3,000–15,000.
• •Looks-like prototype — Looks like the final product without necessarily working. For market testing, photography, investor demos. Typically $1,000–5,000.
• •Production-intent prototype — Built with real production processes and materials to validate manufacturing. The final exam before tooling. $5,000–30,000+.
• •Iteration — One design-build-test-learn cycle. Plan for 3–5 iterations on simple products, 5–8 on complex ones. Iteration is the process working, not failing.
• •3D printing (additive manufacturing) — Building parts layer by layer from digital files. Fast and cheap for prototypes; usually wrong for mass production.
• •FDM (Fused Deposition Modeling) — The most common, cheapest 3D printing: melted plastic filament. Great for early POC parts.
• •SLA (Stereolithography) — Resin-based 3D printing with smooth, detailed finishes. The looks-like prototype workhorse.
• •SLS (Selective Laser Sintering) — Powder-based 3D printing producing strong, functional nylon parts without support structures. Good for works-like mechanisms.
• •CNC machining — Cutting parts from solid blocks of metal or plastic under computer control. Precise, strong, production-grade materials — costs more than printing.
• •Vacuum casting (urethane casting) — Making 10–50 copies of a part from a silicone mold. The bridge between one 3D print and thousand-unit injection molding.
• •Breadboard — In electronics, the temporary circuit board used to prove electronic function before designing a custom board.
• •PCB / PCBA (Printed Circuit Board / Assembly) — The custom circuit board in an electronic product (PCB = bare board; PCBA = board with components). Custom PCBs are the main reason electronics multiply prototype budgets.
• •Firmware — The software living on your product's electronics. Budget for it like a physical component — it costs engineering hours the same way.

Manufacturing

• •Tooling — The custom molds, dies, and fixtures a factory builds to produce your parts. The big upfront manufacturing cost: injection mold tooling runs $5,000–50,000 per mold; CNC fixtures $1,000–15,000. You should own your tooling or have contractual rights to it.
• •Injection molding — Injecting molten plastic into a steel mold. The dominant process for plastic products at scale: high tooling cost, then very low per-unit cost.
• •MOQ (Minimum Order Quantity) — The smallest order a manufacturer will accept. Typical: 1,000+ units for injection-molded plastic, 100+ for machined metal parts. MOQ × unit cost = your first inventory check.
• •Unit cost — What one unit costs to manufacture, excluding tooling. Drops with volume — often steeply.
• •Landed cost — Unit cost plus freight, duties, tariffs, and insurance to get product to your warehouse. The number that actually belongs in your margin math, especially for offshore production.
• •Lead time — Order-to-delivery time. First production runs typically take 8–16 weeks; repeat runs with existing tooling, 4–8 weeks.
• •First article — The first parts off new tooling, inspected and approved before full production. Never skip first-article inspection.
• •QC (Quality Control) — The inspection plan catching defects before they ship. Defined in writing before production, not negotiated after a bad batch.
• •Contract manufacturer (CM) — A factory that produces your product to your specs. You own the design; they own the production line.
• •OEM / ODM — OEM: manufacturing your original design. ODM: a factory's existing design sold under your brand. Inventors developing something new are on the OEM path.
• •Offshore vs. domestic — Overseas production (often Asia) trades lower unit costs for longer lead times, freight, tariffs, and harder communication; domestic reverses the trade. Landed cost, not unit cost, makes the comparison honest.
• •Certification (UL, FCC, CE) — Third-party safety and compliance marks. Electronics generally need FCC (US) and often UL; CE covers Europe. Thousands of dollars and weeks — budget them before launch, not after.

Intellectual Property

• •NDA (Non-Disclosure Agreement) — The contract keeping your idea confidential while you work with firms and factories. Working under NDA does not count as public disclosure. Legitimate firms sign yours readily; one-way NDAs favoring them are a red flag.
• •Patent — A government grant letting you sue copiers for up to 20 years. It doesn't physically prevent copying — enforcement is on you. Utility patents run $5,000–15,000+ with an attorney and take 1–3 years.
• •Provisional patent application (PPA) — A 12-month placeholder establishing your priority date: $75–150 in USPTO fees, $1,500–3,000 attorney-drafted. Grants "patent pending" status; must be converted to a utility filing within 12 months or it expires.
• •Utility patent — The full patent protecting how an invention works — what people mean by "patent."
• •Design patent — Protects only how a product looks. Cheaper and faster than utility patents; narrower protection.
• •Prior art — Everything publicly known before your filing date. Prior art that matches your invention can block your patent — which is why a free Google Patents search belongs in week two, not year two.
• •Public disclosure — Showing your invention publicly (crowdfunding, trade shows, sales, online demos). Starts a 12-month US filing deadline and immediately kills most foreign patent rights. Private, NDA-covered work doesn't count.
• •Patent pending — The status between filing and grant. Real deterrent value; conferred by a $150 provisional as much as a $15,000 utility filing.

Business & Money

• •COGS (Cost of Goods Sold) — What each sold unit costs you all-in. Retail price minus COGS is your gross margin.
• •Gross margin — Selling price minus COGS. Hardware businesses generally need 50%+ direct-to-consumer margins to survive returns, marketing, and mistakes.
• •Wholesale price — What retailers pay you — typically about 50% of retail. Matters doubly because licensing royalties (typically 3–5%) are calculated on wholesale, not retail.
• •Licensing — Granting a company rights to make and sell your invention for royalties. Real but rare; requires IP protection and usually a working prototype. The honest math here.
• •Royalty — Your per-unit cut in a licensing deal: typically 3–5% of wholesale, i.e., roughly $0.50 on a $20 retail product.
• •Invention promotion company — A firm selling evaluations, submission packages, and marketing to inventors for flat fees ($700–$10,000+), paid regardless of outcome. Legally required AIPA disclosures consistently show fewer than 1% of clients profit. What to look for instead.

Where to go next

Terms make sense in sequence: the first 30 days plan covers the validation stage, prototype costs puts numbers on the middle, and patent timing covers protection. If you'd rather just ask an engineer what your specific idea needs, the consultation is free — plain English included.