Inventors: 3 Tips In Working With A Product Licensing Company.
In this picture, I’m presenting at our weekly product meeting where the team votes on products to go to the next round. If a product passes the second round, then we are ready to fully fund that product to market. Here are a few things to keep in mind when reaching out to a product licensing company.
1. Everyone has ideas: This is where being honest with yourself is important. Make sure to Google your idea and see what is out there in the market. I can’t tell you how many times clients call with an idea and a quick three second search pulls up many of the same products they want to invent. Ask yourself, “Does my idea solve a big enough problem?” “Has it already been done?” “Is my idea considerably better than the competition?” Have people/ companies sign an NDA and share your idea with others to gauge interest and hear feedback. Going through this discovery process can help you improve your idea or at least help you move on from an idea that is not viable.
2. Test It Out: Whether your idea is good or can be profitable is still yet to be seen. A legitimate licensing company won’t charge you anything to go through their testing processes, but you must have something for them to actually test. Having a design or prototype is very helpful to see if your concept actually works and to be taken seriously by companies. Technology has changed and it’s getting easier and more cost effective to get 3D models made to getting it sewn, or welded together. Our company even looks at rough prototypes, so if you can at least get something put together to show the functions and features that’s a good start.
3. Understanding a win win: To take a product out to market can be in the millions of dollars. Companies take a huge risk on products to see if they can be profitable. In a licensing agreement clients can usually just sit back, let the company work and then pick up a check. It’s a nice way to make money! Nonetheless many clients allow their greed to take over and demand big percentages. One thing to remember is that good companies work on big volume. If you look at the percentage they offer in the millions of units sold then it’s quite a game changer. Keep in mind who is taking the risk, who’s doing all the work, the full benefits of working with the company, and who it affects if it doesn’t work. Keep a win win mentality because it’s very expensive to get a product out there and margins are smaller than you think.
I wish you the best in your inventions!
Feel free to reach out with any questions: