Product Development Process: An 8-Step Guide

Product development describes the journey from brainstorming ideas to launching a product. The exact steps can vary depending on your industry and business goals, but it usually includes some kind of testing period when you can make improvements or pivot if an idea isn’t working.

This guide breaks down the product development process and includes tips for orchestrating a successful launch. You’ll hear from a number of ecommerce business owners who’ve taken their products from idea to reality.

What is product development?

Product development is the process of taking a product from idea to market. It encompasses 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 the product

• Collecting customer feedback

The product development process can touch many parts of a business, including design, engineering, and marketing. Larger companies often have product managers or product development teams dedicated to developing and executing a product development strategy.

The 8-step product development process

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

While the product development process varies by industry, these eight steps provide a general framework for bringing a product to market:

1. Generate an idea

You only need to find one product to start selling online. In 2025, 41% of Shopify stores launched with a single product.

A great product idea doesn’t necessarily mean inventing an entirely new item from scratch. The Scamper framework, developed by educator Robert F. Eberle to help children access their imaginations, can also help you come up with an item to sell by improving items that are already on the market. It offers these cues:

• 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 for 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 the toothpaste tablet brand Bite. Founder Lindsay McCormick came up with the company’s signature product by modifying an existing one.

“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 Shopify Masters.

It’s OK if your product idea feels niche. Fifty-four percent of new Shopify stores launched in 2025 were in a long-tail category, and product categories outside of the top 100 now account for almost 55% of all sales on the platform.

2. Validate your product idea

Product validation helps you ensure there’s a market for your new product. You’ll determine the following:

• Problem-solution fit: Does your product solve a consumer problem?

• Willingness to pay: Are customers willing to pay for your product?

• Scalable demand: Will the market for your product grow?

One way to gauge interest in your product is by posting social media content about your idea, then directing viewers to a landing page on your website. You can then use a tool like Shopify Forms to capture customer contact information. You’ll see how many people are interested in actually buying your product, and when you’re ready to launch, you’ll have a customer base eager to purchase your items.

This is the strategy hydration brand Waterboy used. Before cofounder and CEO Mike Xhaxho had an actual product to sell, he set up a Shopify landing page that could capture emails and phone numbers. 

Then Mike started posting TikToks about his idea for a sugar-free hydration packet. “It was really just based on, ’Can we get the right messaging in place and see if people care, without any outside influence?’” Mike says on Shopify Masters. “If yes, then we know we’re onto something.”

Mike made around 20 TikTok videos, some of which went viral. They confirmed people were interested in his product idea. “We were fortunate to have the pieces in place to capture that interest,” he says.

There are other ways to validate your product idea too. A competitive analysis can help you determine whether or not a market already exists for your product and what that market looks like. You can also conduct interviews with potential customers or send surveys to people in your target market.

3. Create a prototype

Prototyping means crafting a finished sample before you start mass production. You can create a DIY version of your product or find a third-party supplier to make your prototypes. 

You might create several versions of your prototype, making improvements on each until you have an item that you’re happy with. Collect feedback throughout the process to ensure you’re making a product with the features that customers want.

This is how Julie Carty arrived at the version of the breastfeeding light she lists for sale on her website LatchLight. She sketched her idea, then made her first prototype from a silicone baby spoon, which she carved into LatchLight’s shape. Next, she found a product designer on Upwork to create a 3D model of her idea. 

Then Julie started iterating. 

“It took me about nine different versions of redesigns until I felt comfortable with putting a product out there,” Julie says on Shopify Masters. “I got working prototypes made and gave them to new parents, and lactation consultants, and doulas, and new moms, and also grandparents and dads—anyone that was going to take care of a baby at night.”

The feedback was overwhelmingly positive, and Julie used it to redesign her prototype again. 

“That’s when I decided, ‘OK, I’m going to actually pursue this,” says Julie.

Once you have a product you’re proud of, you’ll want to consider whether you need patents to protect your design. This process can take a while, but it can prevent other businesses from copying your idea.

4. Source materials and production partners

After you finalize your prototype, build your product’s supply chain by finding manufacturers or 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 versus international product sourcing options.

• Plan your storage, shipping, and warehousing 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 Shopify Masters. “You 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.

Once you’ve found a production partner, you can either order products and store them in your own warehouse, or outsource warehousing to a third-party logistics (3PL) partner. You can use the Shopify Fulfillment Network to find one. 

5. Calculate your unit economics

With your production partners in place, figure out how much you’ll earn per unit sold. To establish your break-even point and determine 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

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, you can 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. 

Shopify has a free pricing calculator you can use to find a price that ensures you make a profit.

6. Beta test your product

Before your official product launch, you can soft launch your product with a small group of customers. This can help you fine-tune your customer experience before you go public. 

You can tap members of your target audience and ask them to test physical products or partner with influencers in your niche who have an understanding of your target market and how similar products compare. If you have a digital product or software, you can collect user feedback by signing up for beta testing sites like Beta Testing.

You can take a more personal route too. 

“During our soft launch, we sold to family and friends and others who somehow managed to find us through word of mouth or just randomly online,” says Claudia Snoh, cofounder of coffee brand Kloo, on Shopify Masters. 

Claudia solicited feedback through a mix of channels. She texted, emailed, and asked to speak with members of the soft launch group over the phone. Toward the end of this period, she conducted an extensive survey.

“We did actually end up making big adjustments to our branding, packaging, and pricing,” Claudia says. 

These changes made an impact. When Kloo launched to the general public, they saw a higher conversion rate than during the soft launch period.

7. Launch your product

After the product development process, Michelle Shemilt, founder of undershirt brand Numi, encourages founders to go to market, even if their product isn’t completely perfect. 

“If you’re waiting for everything to be perfect, you’re never going to launch,” Michelle says on Shopify Masters. “It’s still probably 99% good, and that’s part of the journey. You can evolve.”

This sentiment is reflected in the data. According to a 2026 Shopify survey, 57% of US founders who waited before launching a business say they wish they’d started sooner, not that they’d been better prepared.

When you’re ready to release your product, you can use Shopify’s Launchpad app to automate your rollout by scheduling product releases and theme changes. 

8. Iterate

After you put your product out into the world, continue making improvements to help ensure customer satisfaction. Ask customers to fill out surveys and ask about their experience with your product. You can also look at reviews and use social listening tools to learn what customers are saying about your products.

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

Product development process 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 features like proper charcoal airflow and heat-safe technology to protect tables. 

After David created a prototype, he used a crowdfunding campaign to validate 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

When Dominion City Brewing hosted a beer festival in 2020, they 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 their nonalcoholic seltzer at local bars and restaurants before expanding into 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,” Aishwarya says on an episode of the Shopify Masters podcast. “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 dove into product research by 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 a sometimes murky industry.

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