10 Steps to Bring a Product to Market
Now that you have gotten this far, you need to choose, your business model, how you are going to sell your product, how you are going to profit from these sales, how your business will be organized — in short, you need to choose your business model.
A lot of things go into a business model but most inventors choose one of three basic business models: being outsource entrepreneur, licensing or starting their own company.
All three have pros and cons and you will have to decide which model is best for you and your product, based on your own skills and the specific characteristics of your product. To learn more about each model, see below.
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 in the invention articles for examples of inventors who are outsourced entrepreneurs. Just enter the inventor name into the search box on OneStopInventionShop.net
Licensing is when a company takes over your new product idea and pays you a royalty of the sales from your idea. The licensee can be a manufacturer, marketer or a product development company. Since licensees take on all the risk of a product, they are cautious about what products they will license. Most companies will only license an idea if they are fairly certain it will be successful so it is up to you to convince them.
While the earning potential is lower than both the outsource entrepreneurial approach and starting your own company, many inventors choose this strategy because once you license the idea you have no more responsibility to the project.
Similar to licensing are private label agreements. Under a private label agreement, you would need to manufacture your product and then another company would sell it as if it were their own product.
Check out in the inventor articles Todd Bashe – Wordlock, Shawn Donegan – Speed Rollers and Marlene Carlson – Puzzle Toes for articles on Licensing Just enter the inventors name in the search box on OneStopInventioShop.net to get the article
Starting Your Own Company
Starting your own company can offer the biggest returns on your idea, but also can be the biggest loss. This business model will take substantial investment and time and will offer the slowest rate of growth. But if you succeed, the profits are all yours.
In the following steps, we will assume you will contract the manufacturing process and hire sales people or use an established distribution channel, which is not the route everyone takes. With a small target market, some inventors can manufacture and market the product completely on their own, and even earn a substantial profit. Before you start this process consider what skills you have and how much time you are willing to spend on this business, you may need to take on help or partners right away to get started.
Check out in the inventor articles Wayne Willert – Gutter Bolts, Steve Christini – All Wheel Mountain Bike Cassie Quinn –Compartmentalized Diaper Bag and Melody Ross – Chatterbox. Just enter the inventors name in the search box on OneStopInventioShop.net to get the article