When inventors contact my company about Due Diligence I like to clarify the idea with a simple example. Consider it this way, if a manufacturer is getting ready to decide to develop, manufacture, and market a new product that could potentially cost $50,000 to $150,000 to produce plus inventory costs, they would most certainly take their time to ensure they may be making a good business decision in moving forward with all the product (i.e.: have they done their homework on the product). Therefore, you can sum up “homework” as the whole process of gathering all the information necessary to make a good business decision before you make the large financial expenditure. It can generally be assumed that the more hours, effort and money (i.e.: “risk”) that a company must spend to develop Inventhelp George Foreman Commercials, the more they will likely evaluate the potential license. Keep in mind that even if a product appears to be simple and low cost, 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 should perform Homework on their own invention. As discussed, this can depend on the option you might have elected for taking your product or service to advertise.
Option 1 – Manufacturing on your own – If you are planning on manufacturing and marketing the invention all on your own, then yes you will have to perform due diligence. Essentially, you feel the maker in the product and for that reason you should perform homework on the invention just like other manufacturers would. The problem that I have found is that many inventors who opt to manufacture their particular inventions do little, if any marketing due diligence, 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 due diligence efforts, because prior to any company licensing your invention, they will likely perform their particular research. In case you are working with a company such as Invention Home, the costs to market your invention to companies can be minimal – therefore it could cost you more to really carry out the due diligence than it could to just market the Inventhelp Phone Number to companies (which, is ultimately your very best type of research anyway). Remember, you should have taken enough time to accomplish your basic consumer research along with a patent search earlier along the way to be assured that your product may be worth pursuing to begin with (i.e.: the item is not really already on the market and you will find a demand).
Let me summarize. If you are planning on investing a lot of cash on your invention, then it is recommended to analyze the opportunity first to make certain it’s worth pursuing; however, should you can actively promote your invention to companies with minimal cost, you can be assured that an interested company will perform their very own homework (not depend on yours). Note: it is usually helpful to have marketing due diligence information available as you discuss your invention opportunity with prospective companies; however, it is really not always easy to acquire this info so you should balance the effort and expense of gathering the data using the real need of having it.
I also will provide you with some homework tips.As discussed, the idea of marketing research would be to gain as much information as is possible to create a well-informed decision on investing in any invention. In a perfect world, we would have got all the relevant information on sales projections, retail pricing, marketing costs, manufacturing setup and unit costs, competitive analysis, market demand, etc. However, these details is not always very easy to come across.
In case you are not in a position to pay a professional firm to perform your marketing evaluation, it really is easy to perform research on your own; however, you must understand that research ought to be interpreted and used for decision-making and by itself, it offers no value. It really is everything you do with the details that matters. Note: I would recommend that you just do NOT PURCHASE “researching the market” from an Invention Promotion company. Often sold being a “first step” (they’ll usually approach you again with an expensive “marketing” package), the details are largely useless because it is not specific research on your own invention. Rather, it is actually off-the-shelf “canned” industry statistics, that can possibly not assist you in making an educated decision.
Before we get to the “tips”, let me clarify that “homework” can come under various names, but essentially each of them mean the same thing. Some of the terms which i have seen to explain the diligence process are:
· Marketing Evaluation
· Commercial Potential
· Invention Salability
· Profitably Marketable
· Consumer Research
· Invention Assessment
Each one of these terms is basically discussing the investigation to evaluate the chance of an invention’s salability and profitability. The question of whether your invention will sell can do not be known with certainty, however, you can perform some steps to help you better understand the chance of success.
Again, if you are planning on manufacturing your invention all on your own, you should look at performing marketing due diligence 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 homework are listed below.
1. Ask and answer some elementary questions
– Can be your invention original or has someone else already think of the invention? Hopefully, you have already answered this inquiry inside your basic research. Otherwise, check trade directories or perhaps the Internet.
– Is the invention a solution to a problem? Or even, why do you think it is going to sell?
– Does your invention really solve the issue?
– Can be your invention already on the market? If so, exactly what does your invention offer on the others?
– How many competing products and competitors can you locate on the market?
– What is the range of cost of these items? 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 pros and cons which will impact how your invention sells and objectively evaluate your list
– Demand – is there an existing demand for your invention?
– Market – does a market exist for your invention, and if so, what exactly is the size of the current market?
– Production Capabilities – might it be easy or hard to produce your invention?
– Production Costs – can you have accurate manufacturing costs (both per unit and setup/tooling)?
– Distribution Capabilities – might 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, convenience)?
– Retail Price – have you got a price point advantage or disadvantage?
– Life – will your invention last over other products?
– Performance – does your invention perform a lot 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 exist special laws that must definitely be followed (i.e.: FDA approval)
3. Seek advice or input from others (consider confidentiality)
– Target professionals / experts within the field.
– Ask for objective feedback and advice.
– Speak to marketing professionals.
– Ask sales people inside the field.
– Ask people you know inside the field.
– Speak with close friends and family members who you trust.
– Demand input on the invention like features, benefits, price, and if they would purchase it.
During the diligence stage, existing manufactures have an advantage in this they are able to chat with their clients (retail buyers, wholesalers, etc.). Inside my experience, probably the most key elements that a company will consider is whether their existing customers would buy the product. Basically If I took How To Start An Invention Idea to some company to discuss licensing (assuming they might produce it on the right price point), you will find a high likelihood they would license the merchandise if a person of their top customers decided to market it.
Whether a retail buyer is interested in purchasing a product is a driving force for companies considering product licensing. I’ve seen many scenarios where a company had interest in an invention nevertheless they ultimately atgjlh to move on the idea as their customer (the retailer) failed to show any interest inside the product. Conversely, I’ve seen companies with mild interest within an idea who jump at a new product when a retailer expresses interest inside it.