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Inventor Agreements with Manufacturers

September 1, 2018 by Don Debelak

Types of Deals for Inventors

Inventor deals with marketers can be set up in a number of ways.  I’ve listed several deal structures you can suggest to marketers to find the one that suits them best.

Firm Purchase Commitment

The simplest inventor deal is a two to three year purchase commitment that’s large enough to help the inventor sell all the products it can afford to make. Retailers are a good example of a company that will do this as well as distributors or integrators that buy your product and then include it in as a component of their own product. An exhaust system manufacturer for example is an integrator who might buy large volumes of an innovative component from an inventor that it will incorporate into its final product.

 

{Don Debelak’s new book, Turning Your Invention into Cash is now available on Amazon for $3.49. Go to Amazon.com and enter inventions Don Debelak to purchase. From the author of Entrepreneur Magazine’s Bringing Your Product to Market.}

 

Firm Purchase Agreements in Return for Considerations

The agreement might call for exclusive rights nationally or in a territory for either a short time or it could be for the duration of the agreement. Rather than a total exclusive agreement, the consideration might be that certain features or applications are exclusive to the marketing partner. For example a chain of skateboard shops might have exclusive rights to a new style of polyurethane wheels on a skateboard, but not exclusive rights to the entire skateboard line. Agreements also be entered with price concessions in additional other considerations. In return for a firm long term agreement you might have to give up both, and might also need to offer protected pricing, which you can only raise under certain restricted circumstances.

Private Label Agreements

A private label agreement is really no different than the first two options, except that rather than branding your product or service with your name, or the service provider’s name, it is instead branded with the marketer’s company name. For example you might sell your skateboard wheels with the name of the distributor or retailer on the box.  This I the deal that most often works if you are selling to a marketing company that sells products from overseas and other small manufacturers.

The deals you might suggest here can typically be handled by a purchase order or straight buy and sell agreement. Web sites with simple sample forms you can utilize for a buy sell or private label agreement are: www.albusiness.com (my top choice); www.legalforms.com; www.findlegalforms.com; www.lawdepot.com; www.americalawyer.com and www.findlaw.com.

 

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