10 Steps to Bring a Product to Market – Outsource Entrepreneur Model
Outsource Entrepreneur Model
Find Potential Partners
An outsource entrepreneur uses outsourcing to quickly bring his or her product to market with low risk and low investment. There are essentially three aspects to bringing a product to market: research and development; manufacturing; and marketing. As the inventor, you perform the task of research and development (inventing and developing the idea) and outsource the manufacturing and marketing to investing partners. The investing partners will provide further development and pay for many of the startup costs. In return they will receive more profits than contracted work and will have some control of the idea.
This is often the fastest way to bring a product to market, is low risk and allows you to move onto new ideas quickly since the other partners will continue to manufacture and market your idea without excessive involvement on your part. This is not for everyone and will require you to have strong deal-making skills, but the low-risk and low-investment aspect makes this appealing for most inventors, who are often strapped for cash.
Check out Bob Olodort –Stowaway Keyboard and Vijay Malik – Multiple Inventions for examples of inventors who are outsourced entrepreneurs. Just enter the inventors name in the search box on OneStopInventioShop.net to get the article
Chose the Best Partners
Not everyone will be a good candidate for becoming an outsourcing partner. You need to find manufacturers who can add your product without too much investment in new machinery and who are running below capacity. Marketing partners must carry products similar to yours and your product must represent a significant increase in sales for the firm, at least 20%. In short, you need to find potential partners who have a lot to gain from taking on your product. This usually means you will not be dealing with industry leaders, but smaller companies hoping to catch up and overtake those leaders.
You will need a manufacturing partner and a marketing partner for the outsourced model. See lesson 9 on Manufacturing to find potential manufacturers. There are many options for marketing partners, distributors, small manufactures of complementary products, groups of sales reps, larger companies, and specialized marketing companies. The best way to find outsourced marketing partners is by attending industry trade shows and association meetings. While at the shows walk around and talk to companies with smaller booths with complementary products, explain your product to them and ask: how they sell their product; what distributors they use, and see if they would be interested in any joint marketing programs. I also like talking to people at the tables by where people eat lunch, they typically hold 10 to 15 people and meet people in the industry. You can also use the trade show directory to look up people after the show and call them up and talk to them.
For both manufacturing and marketing models you need partners willing to put up high amounts of support and an investments. There are several characteristics to look for when searching for both marketing and manufacturing companies:
- You can add 10% to 20% to their revenue stream. Less than 10% and there is not enough incentive for the company, and more than 20% the company might not have the funds needed to move forward.
- The company has a stagnating product line, and has fallen behind competitors. Companies know when there line is old and you represent a low cost way for them to expand their line.
- The company has money to invest. You want to be a low cost option, but not a free option. Good partners offer support, manufacturers might pay for tooling, amortize tooling cost, offering extra-long terms, purchasing inventory, or offering a straight up investment. Marketing partners could offer down payments, pay for trade shows, run advertising programs or offer other assistance that helps promote your product. The partners know how to cost-effectively spend their money. If you pay the money, you won’t be nearly as cost effective
Check out Andrew Dewberry – the Vancouver Tool Company in the inventor articles. Just enter the inventors name in the search box on OneStopInventioShop.net to get the article