New Invention Ideas..

When inventors contact my company about Due Diligence I like to explain the idea with a simple example. Consider it this way, if a manufacturer is getting ready to make the decision to develop, manufacture, and market a new product which could potentially cost $50,000 to $150,000 to produce plus inventory costs, they would most certainly take their time to ensure these are building a good business decision in moving forward with the product (i.e.: they have done their homework on the product). Therefore, you can sum up “homework” as the process of gathering all the information necessary to make a good business decision prior to making the large financial expenditure. It can generally be assumed that the more hours, effort and cash (i.e.: “risk”) that a company must spend to develop How To Patent A Product, the more they will likely evaluate the potential license. Stay in mind that even if a product seems to be simple and affordable, the entire process of developing and manufacturing is rarely simple and affordable. Companies will evaluate such criteria as customer comments, list price points, unit cost to produce, competitive landscape, manufacturing feasibility, market opportunity, etc.

Inventors often wonder if they need to perform Due Diligence on the invention. As discussed, this may depend on the option you have elected for taking your product or service to market.

Option 1 – Manufacturing on your own – If you are planning on manufacturing and marketing the invention on your own, then yes you will need to perform research. Essentially, you become the maker of the product and as a result you need to perform the research on your own invention just like other manufacturers would. The situation i have found is the fact that many inventors who opt to manufacture their very own inventions do little, if any marketing research, which is actually a big mistake.

Option 2 – Licensing for Royalties – if you are planning on licensing for royalties, then I believe you can minimize your research efforts, because before any company licensing your invention, they will perform their very own research. If you are employing a company including Invention Home, the expenses to promote your invention to companies can be minimal – therefore it could set you back more to really perform research than it would to just market the Invent Help to companies (which, is ultimately your best type of homework anyway). Remember, you should have taken the time to do your basic market research and a patent search earlier along the way to be confident that your product or service is worth pursuing to begin with (i.e.: the merchandise is not already on the market and you will find a demand).

Let me summarize. If you are planning on investing a substantial amount of money on your invention, then it is best to analyze an opportunity first to ensure it’s worth pursuing; however, in the event you can actively market your invention to companies with minimal cost, you can be assured that an interested company will work their particular homework (not depend on yours). Note: it is usually helpful to have marketing homework information available when you discuss your invention opportunity with prospective companies; however, it is far from easy to obtain this information so you need to balance the effort and cost of gathering the data using the real need for having it.

I also provides you with some due diligence tips.As discussed, the thought of marketing research is always to gather as much information as possible to produce a well-informed decision on purchasing any invention. In a perfect world, we may have all the appropriate information about sales projections, retail pricing, marketing costs, manufacturing setup and unit costs, competitive analysis, market demand, etc. However, this info may not be simple to come by.

If you are not in a position to pay a professional firm to perform your marketing evaluation, it is possible to perform the research on your own; however, you must know that research needs to be interpreted and used for decision-making and on its own, it provides no value. It is everything you do with the information that matters. Note: I would recommend that you simply do NOT PURCHASE “market research” from an Invention Promotion company. Often sold as a “initial step” (they’ll usually approach you again with the expensive “marketing” package), the information is largely useless since it is not specific research on the invention. Rather, it is actually off-the-shelf “canned” industry statistics, that will not always help you make a knowledgeable decision.

Before we arrive at the “tips”, let me clarify that “research” can come under various names, but essentially they all mean exactly the same thing. A few of the terms that I have witnessed to explain the diligence process are:

· Homework

· Marketing Evaluation

· Commercial Potential

· Invention Salability

· Profitably Marketable

· Consumer Research

· Invention Assessment

Each one of these terms is essentially talking about the investigation to assess the chance of your invention’s salability and profitability. The question of whether your invention will sell can never be known with certainty, however, you can perform some steps to help you better comprehend the likelihood of success.

Again, if you are planning on manufacturing your invention by yourself, you should look at performing marketing homework on your own product. If you are planning on licensing your invention for royalties the company licensing your invention should perform this research.

Some suggestions for marketing homework are the following.

1. Ask and answer some elementary questions

– Is your invention original or has another person already develop the invention? Hopefully, you may have already answered this question in your basic research. If not, check trade directories or perhaps the Internet.

– Can be your invention a solution to your problem? Or even, why do you think it can sell?

– Does your invention really solve the situation?

– Can be your invention already on the market? In that case, what does your invention offer on the others?

– The number of competing products and competitors can you discover on the market?

– Exactly what is the range of value of these products? Can your product fall into this range? Don’t forget to element in profit and possibly wholesale pricing and royalty fee, if any.

– Can you position your invention being a better product?

2. List the advantages and disadvantages that can impact how your invention sells and objectively evaluate your list

– Demand – can there be an existing demand for your invention?

– Market – does a market are available for your invention, and in case so, exactly what is the scale of the current market?

– Production Capabilities – could it be easy or challenging to produce your invention?

– Production Costs – can you get accurate manufacturing costs (both per unit and setup/tooling)?

– Distribution Capabilities – will it be easy or challenging to distribute or sell your invention?

– Advanced features – does your invention offer significant improvements over other similar products (speed, size, weight, ease of use)?

– Retail Price – have you got a price point advantage or disadvantage?

– Life – will your invention last more than other products?

– Performance – does your invention perform better than other products (including better, faster output, less noise, better smell, taste, look or feel)?

– Market Barriers – is it difficult or easy to enter your market?

– Regulations and Laws – does your invention require specific regulatory requirements or are available special laws that really must be followed (i.e.: FDA approval)

3. Seek advice or input from others (consider confidentiality)

– Target professionals / experts inside the field.

– Ask for objective feedback and advice.

– Talk to marketing professionals.

– Ask sales people inside the field.

– Ask people you know within the field.

– Talk to close relatives and buddies who you trust.

– Request input on the invention including features, benefits, price, and if they might buy it.

Through the diligence stage, existing manufactures come with an advantage in this they have the ability to talk with their potential customers (retail buyers, wholesalers, etc.). Within my experience, one of the most important factors which a company will consider is if their existing customers would purchase the product. If I took Inventions Ideas to a company to go over licensing (assuming they could produce it on the right price point), there exists a very high likelihood that they would license the merchandise if one of the top customers consented to sell it off.

Whether a retail buyer is interested in buying a item is a driving force for companies considering product licensing. I’ve seen many scenarios where a company had interest in an invention but they ultimately atgjlh to pass through on the idea as their customer (the retailer) failed to show any interest inside the product. Conversely, I’ve seen companies with mild interest inside an idea who jump in a new product each time a retailer expresses interest inside it.

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