My products are fairly high tech. We use custom ICs and surface mount technology for everything. For a certain sensor, in high volume production, the ICs will cost $0.50, the substrate about the same, stuffing and testing also about the same $1.50. What does a single, first prototype cost? $100K to $!50k. Why? Engineers need to specify all the functions and design the circuit. $25k IC designers start working on the design. $25k. Substrate and test plan. $25k. Testing with SPICE simulation $5–8k. Breadboard prototype build using conventional components $30k (even after we do the SPICE simulation) If it does not work, figure another $20k.
And we only made one piece. Usually we will make them in sets of 5 – 10 as the cost is not much higher than the single board.
I am not including other aspects such as: legal, patent work, marketing research, component search, warranty plans, sourcing, redundant sourcing, I/O protocols, etc..
Good people don’t usually work for free. Think how many widgets we have to sell just to recover the development costs.
Don’t be discouraged. It is not all negative. If you have something you want to make you might approach a university in your area. Many of them have some form of entrepreneur program or incubator just waiting for projects. Make sure you have a Non disclosure agreement, NDA, in hand before you start detailing your ideas.