When inventors contact my company about Due Diligence I like to clarify the idea with a simple example. Think of it this way, if a manufacturer is getting ready to decide to develop, manufacture, and market a new item that 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 using the product (i.e.: they have done their homework on the product). Therefore, you can summarize “homework” as the whole process of gathering all the information necessary to make a good business decision before making the large financial expenditure. It can generally be assumed that the more time, effort and cash (i.e.: “risk”) that a company must spend to develop How To Get Something Patented With Inventhelp, the more they will likely evaluate the potential license. Keep in mind that even if a product is apparently simple and affordable, the process of developing and manufacturing is rarely basic and low cost. Companies will evaluate such criteria as customer feedback, list price points, unit cost to produce, competitive landscape, manufacturing feasibility, market opportunity, etc.
Inventors often wonder if they have to perform Research on their own invention. As discussed, this may depend on the option you may have elected for taking your product or service to advertise.
Option 1 – Manufacturing all on your own – If you are planning on manufacturing and marketing the invention all on your own, then yes you will need to perform homework. Essentially, you are the producer from the product and for that reason you ought to carry out the due diligence on the invention just like other manufacturers would. The situation i have found is the fact many inventors who choose to manufacture their own inventions do little, if any marketing homework, which is a big mistake.
Option 2 – Licensing for Royalties – if you are planning on licensing for royalties, i believe you can minimize your homework efforts, because just before any company licensing your invention, they are going to perform their own research. If you are employing a company including Invention Home, the costs to market your invention to companies can be minimal – therefore it could cost you more to actually perform homework than it would to just market the How To Get A Patent to companies (which, is ultimately your very best form of homework anyway). Remember, you should have taken enough time to accomplish your basic researching the market and a patent search earlier along the way to be confident that your product is worth pursuing to start with (i.e.: the item is not really already on the market and there exists a demand).
Let me summarize. If you are planning on investing a substantial amount of funds on your invention, then it is recommended to analyze the chance first to make sure it’s worth pursuing; however, in the event you can actively advertise your invention to companies with minimal cost, you can be assured that an interested company will work their own research (not depend on yours). Note: it will always be useful to have marketing due diligence information available as you discuss your invention opportunity with prospective companies; however, it is not always easy to acquire these details so you should balance the time and effort and expense of gathering the data with all the real need of having it.
Furthermore, i provides you with some due diligence tips.As discussed, the thought of marketing homework would be to gain as much information as is possible to make a well-informed decision on making an investment in any invention. In a perfect world, we would have all the appropriate information on sales projections, retail pricing, marketing costs, manufacturing setup and unit costs, competitive analysis, market demand, etc. However, this information might not be very easy to come by.
Should you be not in a position to cover a professional firm to do your marketing evaluation, it is actually easy to carry out the research all on your own; however, you must know that research ought to be interpreted and utilized for decision-making and by itself, it provides no value. It is what you do with the information that matters. Note: I might recommend that you simply do NOT PURCHASE “researching the market” from an Invention Promotion company. Often sold being a “starting point” (they’ll usually approach you again having an expensive “marketing” package), the details are largely useless because it is not specific research on your invention. Rather, it is actually off-the-shelf “canned” industry statistics, which will not always assist you in making an educated decision.
Before we arrive at the “tips”, let me clarify that “research” can come under various names, but essentially all of them mean exactly the same thing. Some of the terms that I have seen to describe the diligence process are:
· Marketing Evaluation
· Commercial Potential
· Invention Salability
· Profitably Marketable
· Researching The Market
· Invention Assessment
Each one of these terms is basically 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 assist you better be aware of the likelihood of success.
Again, if you are intending on manufacturing your invention all on your own, you should consider performing marketing homework on the product. If you are intending on licensing your invention for royalties the company licensing your invention should perform this research.
A few recommendations for marketing research are the following.
1. Ask and answer some elementary questions
– Can be your invention original or has somebody else already develop the invention? Hopefully, you have already answered this query within your basic research. If not, check trade directories or even the Internet.
– Is your invention a solution to your problem? Or even, why you think it can sell?
– Does your invention really solve the situation?
– Is the invention already on the market? If so, what does your invention offer within the others?
– The number of competing products and competitors can you locate on the market?
– What is the range of cost of the products? Can your product fall into this range? Don’t forget to element in profit and maybe wholesale pricing and royalty fee, if any.
– Can you position your invention as being a better product?
2. List the advantages and disadvantages that can impact the way your invention sells and objectively evaluate your list
– Demand – will there be a current demand for your invention?
– Market – does a market exist for your invention, and in case so, what is the dimensions of the current market?
– Production Capabilities – could it be easy or challenging to produce your invention?
– Production Costs – can you have accurate manufacturing costs (both per unit and setup/tooling)?
– Distribution Capabilities – will it be easy or hard 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 much better than other products (including better, faster output, less noise, better smell, taste, look or feel)?
– Market Barriers – will it be difficult or very easy to enter your market?
– Regulations and Laws – does your invention require specific regulatory requirements or exist special laws that really must be followed (i.e.: FDA approval)
3. Seek advice or input from others (consider confidentiality)
– Target professionals / experts in the field.
– Ask for objective feedback and advice.
– Talk to marketing professionals.
– Ask sales representatives within the field.
– Ask people you know inside the field.
– Speak with close family and friends that you trust.
– Request input on the invention such as features, benefits, price, and in case they could purchase it.
Through the diligence stage, existing manufactures have an advantage in this they have the capacity to talk with their customers (retail buyers, wholesalers, etc.). Within my experience, probably the most key elements which a company will consider is whether or not their existing customers would get the product. If I took Patent Companies to a company to go over licensing (assuming they might produce it on the right price point), there is a extremely high likelihood which they would license the merchandise if one with their top customers decided to market it.
Whether a retail buyer is interested in investing in a item is a driving force for companies considering product licensing. I’ve seen many scenarios in which a company had interest within an invention but they ultimately atgjlh to move on the idea since their customer (the retailer) failed to show any interest in the product. Conversely, I’ve seen companies with mild interest inside an idea who jump at a cool product whenever a retailer expresses interest within it.