Identifying the right target market can often be the difference between success and failure for new products. The right market will be more willing to accept, and ready to pay more for, the right product, and the wrong market will be slower to accept your product and will require more marketing efforts, cutting down on your profits. So choose your target market carefully. There are many factors that determine the right target market, and this article will cover two important factors: market size and pricing.

When you determine your market you need to answer these questions:

1. Who are your customers? (income level, gender, hobbies, etc.)
2. Where do they live? (city, state, region, or country)
3. How will they find you? (they belong to an online community, read a certain newspaper, go to certain stores, etc.)

Markets that are the right size for inventors

While many inventors want to enter a big market with lots of customers, this is most often a mistake. Your marketing efforts (unless you have a huge marketing budget) will probably be more like a drop in a bucket than a big splash and it is unlikely that consumers will notice.

You want to choose a market small enough that you can make that market notice your marketing efforts. As your budget grows, your market can expand, but you need to consider what funds and time you have now for marketing your product.

Your market maybe be local, or include specialty shops or boutiques. You may sell just through one retail outlet or through catalogs to begin with.

Pricing is aligned with inventor’s costs

Most inventors don’t realize all the hidden costs in selling a product. For instance, selling to retailers through distributors means both the distributor takes a percentage of the wholesale price (sometimes more than 30%) and then retailer often takes 50% of the retail price (double the wholesale price). So if you decide to sell products this way, which many inventors do, you need to make sure that your target customers are willing to pay a high enough price so that you can produce your product and still make a profit on only 70% of the wholesale price, or 35% of the retail price.

You need to do market research to determine what price consumers are willing to pay and if they aren’t willing to pay a price that allows you to make a profit, you either need to choose different target customers who are willing to pay more, find a different distribution channel, or rework your product so it is cheaper to make, but still valued by your target customers.

Keep Marketing Expenses Below 10% of Sales

Once you choose your target market, marketing can be very expensive. You need to be careful of how you spend the limited dollars you have allotted to marketing. These are some tactics to use to make your marketing dollars go further.

Low Cost, Even Free Marketing Tactics

In store demonstrations allow you to build sales by investing only your time. You can also see if bloggers or websites will review your product and post their review online if you send them a sample.

Publicity

Publicity is a great way to get a lot of attention. One of the great things is that publicity can be free. If you can interest news sources in your product, you, or in the story behind you and the product, there is a good chance they will do a story about you and your product.

You can also do contests, trials, and other events to promote your product and invite news people to the event. For instance, do you have a new bike product? You can organize a bike event, even for a favorite charity if you’d like, and have people try out your product.

Select Small Markets with Easy Communication

By choosing smaller markets, your marketing expenses will be much lower. Smaller markets have fewer publications and websites, so you will need to place fewer ads and the ads are also inexpensive. Ideally, you want a market with publications and websites that have good readership, so you can be sure that your ads are reaching potential customers. Also, you can offer to write articles for these media outlets and list your web address and that you invented such and such a product in your bio info.

Related posts:

1. Selling to Wal-Mart and Target

Can attending the right trade shows mean the difference between success and failure? It can. Let’s look at a good example of what a trade show can do for you.

Inventor Story: Lexi Glenn

Fourth-grader Lexi Glenn was frustrated with filling water balloons with the hose or faucet. After digging in the garage, she found a garden sprayer, which she then tried to fill water balloons with. She realized she was on to something and with the help of her grandmother, they started making modifications to create the perfect water balloon filler, the Pumponator!

After developing the product, Glenn’s grandmother, Donna Ramere, put her savings into ordering 2,000 products and put them on eBay and Amazon. But besides an occasional sale, nothing really happened.

That all changed when they attended the American International Toy Fair, an annual trade show in New York City. At the trade show, Ramere was able to get the word out about the Pumponator to the right people, and even after the trade show, the word kept on spreading. Soon Toys “R” Us was selling the Pumponator online and Learning Express was selling it nationwide in 150 stores. Within 9 months, the Pumponator passed the $1 million sales mark and now Ramere is working on a newer and better version to sell next summer.

How to Find the Right Trade Show

1.   Find the right trade magazine by looking in Gale’s Source of Publications and Broadcast Media at larger libraries, or search on the Internet for your product category and the term “trade magazines”. Also, you can look at associations, such as toy industry associations and their sites will typically have a link some where to trade magazines. These trade magazines will list and cover the best trade shows in their industry.

2.   Also can use the site www.tsnn.com

Before attending the show

1.  Before attending the show as an exhibitor try to get a copy of last years exhibitors and call up some of the companies that had just one booth and ask to speak to their show manager. Ask whoever is responsible for attending show about their show experiences and if they have any tips. Be sure to find out about the quality of the booths (ask for a picture of their booth if possible), if they needed samples, how much display product is needed and how much literature they used. Check to see if they offered show specials, or would offer show specials the next time they attend. Also see if they were satisfied with the results from the show and see how many sales they made, or reps they signed up. I’ve found that people are more than willing to talk to you if you explain you are a new inventor and are trying to prepare for the show.

2.  If you have an idea, but not a product, I still recommend you try to attend the show as an attendee. You will have chance to talk to people at booths, and also at tables where people eat lunch and have coffee and at the show hotels after the show. Always be at the show the first two hours it is open and the two hours before it closes. The show is typically not busy at that time and many reps and others working booths will be happy to talk to you if they are not busy. Take a one page simple non-disclosure document (unless you have a patent, then a non-disclosure document is not needed) with you and a sales flyer for your product. If you don’t have a good looking prototype yet, hire a graphic artists to give you a good drawing of your product (contact Josh Wallace for a product drawing). When you approach someone at the show ask them 1) how the show is going, what their product line is and how long they have been with the company. They will almost always ask you what you do. Tell them you are considering introducing a new product and ask if they would be willing to look at it for you. Offer to buy them coffee, lunch or a beer at the hotel. Ask them to sign the non-disclosure form and then get their feedback on your product.

Trade Shows

Investing the money in attending a trade show (not even having a booth, just attending) is one of the most worthwhile investments you can make in your product. At trade shows you can meet sales reps and other important industry contacts, you can get great advice from really knowledgeable people and get a better idea on how to best break into the market. These contacts can be the difference between success and failure for you idea, just as it did for Lexi Glenn.

Related posts:

1. Selling through Regional Trade Shows

Setting up a sales rep network is one of the most cost effective ways to start selling regionally, nationally or internationally. Expect sales reps to take a 10-12% commission, but for inventors starting out selling their product, this is much cheaper and more effective than trying to hire, train and motivate his or her own sales employees.

Sales reps bring with them expertise, experience, industry knowledge and many contacts within the industry–all things that you need to succeed. Additionally, while stores will buy from anyone, they prefer fewer vendors, so sometimes being an inventor with one product makes it difficult to get into retailers. But having sales reps that already sell to your target market means that many of your target stores already buy from your rep and can add a new product without much hassle. Also when adding new stores, your reps won’t face the same resistance that a one product inventor faces since they carry other products.

Finding Reps

There are lots of reps, but you need to know how to find them. Follow the below steps and you should be able to locate plenty of reps.

Trade Magazines and Trade Shows

Locate the leading trade magazines and trade shows for the industry. If possible attend the trade show, go to booths with complementary products and see if they have reps or maybe the booth is even run by reps.

Subscribe to the industry trade magazines and in the new product sections, send away for information on complementary products and when you receive the sales literature, see if there are local reps names included. Talk to the rep and see if he or she knows additional reps.

Trade Association Websites

Sometimes industry trade association websites have lists of reps. Gales’ Book of Associations, found at most larger libraries, and Internet searches should be enough for you to find industry trade associates.

Also check out manufactures sales representatives directories such as MANA, Manufacturers Agents National Association.

Buy a List If Necessary

If you are having a hard time finding reps, or if you don’t have time to find them, you can buy a sales rep list of certain industries from onestopinventionshop.net (available here: http://onestopinventionshop.net/books/sales-reps/) or they can compile a custom list for you. More info here: http://onestopinventionshop.net/services/finding-sales-representatives/

Talk to Other Inventors

When attending trade shows or other industry events, network with other inventors and ask them if they know any good reps.

Preparing a manufactures’ rep agreement

Before you start contacting sales reps, you want to have a manufactures’ rep agreement ready in case they are interested. You can find a sample manufactures representative agreement on the Internet, have one done by an attorney, or you can get a sample agreement from us, customized for your situation for $75.00. Contact info@onestopinventionshop.net to request an agreement.

There are many particulars in the agreement that you will see in samples that you find in libraries or on the Internet. The main thing for you to be prepared for is to expect to pay a commission of 10 to 12%.

Prepare rep materials for a mailing

Having great materials for your rep mailing is key to success. You need to let reps that you have a hot new product, that you are running a professional and serious business and that you are ready to do all it takes for your product and your reps to succeed.

The literature should include sales flyers, price lists, stories and testimonials. You should offer samples, list your web page, and include info on manufacturing capabilities. Discuss marketing support, i.e. ads being run, trade shows you will attend, PR efforts, and other support. Offer information on sample policies, consignment or guaranteed sales for new customers, and co-op advertising programs. Also include what reps will receive for promotional materials, sales materials and samples.

You need professional looking materials so the reps know you mean business. If your mailing looks like it was put together by a fly-by-night company, it is unlikely you will attract talented and experienced reps.

Sending out the mailing

Send your mailing only to 10 to 15 reps to start. Then call them up and see if any of them are interested in your line. If not, check to see why they are not interested. You may need to make some changes in your package.

If your first mailing didn’t go well, make changes to your package and send it to another 10 to 15 sales reps and again call them up and if they are not interested, find out why. Keep on doing this until you know you’ve got the right mailing materials. Then make a larger scale mailing to all of the reps on your list.

When sending out your mailing, don’t send the contract, but have it ready if someone is interested.

Interviewing the reps

If a rep is interested, make sure you ask him or her a few questions to make sure that he or she is really the right rep for you. Here is what should you look for:

Complimentary Lines

Reps should have complementary lines. For example, if you have a new style of backpack for camping, you want the rep to have other outdoor product lines for the same market.

Driven to Succeed

You want a hungry rep. Selling new products can be hard, so you want a rep that is ready to go out and give it his or her all. The best reps are ones that worked for another rep agency and then started his or her own agency and is anxious to build up sales.

Successful Track Record

Check that the rep has taken on other new lines successfully over the last two years.

Impact of Your Product

The rep needs to believe he or she can make at least $10,000 or $15,000 with your product. If they can’t make that much, it is unlikely they will support it for long.

Technically Qualified

The rep has to have the technical knowledge to properly represent your product. This doesn’t apply to all products, just ones that have a technical or scientific nature. For instance, if you have a chemical product, you need reps that can intelligently and understandably talk about how your product works and answer questions possibly of a technical nature. They don’t need to be chemists, but at least have a basic understanding.

Buy lists of Sales Reps

Baby and Children’s Products — a list of over 180 sales reps for children’s market

Convenience Stores — a list of over 90 sales reps and distributors

Kitchen Reps — a list of approximately 200 sales reps

Gift Reps — a list of approximately 200 sales reps

Promotional Products — a list of over 120 sales reps

Mass Merchants and Drug Stores — a list of 100 sales reps

Toy and Hobby Products — a list of over 120 sales reps

Outdoor Products — a list of over 400 sales reps

Kitchen Plumbing Fixtures — a list of over 150 sales reps and over 30 catalogs for the kitchen market

Hardware Market — a list of over 170 sales reps and articles on selling to the hardware market

Related posts:

1. Read a testimonial from one of Don Debelak’s clients about his sales reps service
2. Sales Reps and Catalogs for Kitchen Products
3. List of Sales Reps for the Promotional Product Market Now Available!

Ordinary Observer Test

Design patents and utility patents protect different aspects of protecting a product. Utility patents protect how a product works, which has historically been easier to define, and design patents protect the ornamental design of a product. The courts have had a very difficult time setting a clear and reasonable standard for determining when someone is infringing on a design patent.

In 1872, the case Gorham v. White set the first standard for determining design patent infringement. The court stated that if the designs of two products are so similar that an average customer would confuse them, possibly causing them to buy one thinking it was the other, then that is infringement. This test came to be called the “ordinary observer test.”

Point of Novelty Test

The next major case that defined how design infringement was determined was Litton Systems, Inc. v. Whirlpool Corp. 1984. The “point of novelty test” was added to see if the design had novelty in light of prior art. If novelty could not be proven, there was no infringement. Furthermore, the patentee had to prove that what was being infringed upon was what made the original design patentable in the first place.

Egyptian Goddess v. Swisa

So what has changed with the Egyptian Goddess v. Swisa case? There are two very important changes that have strengthened design patents:

No Verbal Description

Previously, when deciding design infringement cases, the court required verbal descriptions of the design. These descriptions were not only easy to pick apart, but the decisions would often depend more on which parts of the design were focused on in the case than the design as a whole. By removing the burden of coming up with a verbal description, the court allows the pictures in the patent stand for themselves and puts the design as a whole, not just certain aspects of it, in the center of the case. Pictures are much harder to pick apart, since after all a picture is worth a thousand words.

Point of Novelty Test Deemed Unnecessary

The court decided that prior art should be used in determining the scale of infringement, but otherwise the “ordinary observer test” is enough to determine whether or not there is infringement. This takes much of the burden off of the patentee to prove novelty, thereby strengthening his or her design patent.

Will a Design Patent Work for You?

It may, but you will want to contact a patent professional to find out what will work best for your product. Our Patent Associate, Ron Reardon, gives free one-hour consultation for new clients where you can discuss this question.

Related posts:

1. Good News for Design Patent Holders
2. Patent Backlog: How Inventors Can Deal with the Patent Backlog
3. The Patent Reform Act of 2009

Most inventors dream of licensing their new product, but to many of them, that licensing deal remains elusive. Why is that? Well, licensing is hard, especially when you don’t understand what motivates companies to license products.

When a company licenses a product, they buy a certain amount of rights to your product (as determined in your licensing agreement) in exchange for royalty payments. They handle all of the manufacturing and sales of your product. You need a patent to license a product since licensees are in fact licensing the intellectual property rights of your product and without a patent, you have no intellectual property rights. To fully convince a company to license your product, you may need prototypes, market research or even actual sales results.

There are many reasons why companies license products, but the three main reasons are to stay competitive, to break into new markets or complete their product line.

Staying Competitive

In order to stay competitive, companies need to continually innovate. Innovating is expensive though, and not all companies have the funds for a great research and development department. For these companies, licensing becomes the only economical option to keep on innovating and not falling behind the competition.

So how do you find a company looking to license products to stay competitive? Marketing-leading companies aren’t nearly as likely to license a product from you. You should look for companies that are trying to keep up with, catch or even overcome the market leaders. Licensed product sales are not as profitable as sales for products developed within the company (because of royalty payments), so licensing needs to offer additional benefits other than just producing sales to make a licensing agreement very appealing for a company. So the company that would benefit most from your idea is the company most likely to license it.

You should be able to determine which companies would benefit most by licensing your product by looking at market shares, reading industry news and by looking at new product releases. Look for up-and-coming companies, or companies struggling to keep their market share.

Breaking into New Markets

When a company is looking to use licensing to break into new markets, they often look for a product related to their other products but in a slightly different market. For instance, a company that sells sporting goods to consumers may want to license a new safety product that schools and youth sport leagues would really want. They don’t sell to that market now, but by having a hot product that schools and youth sport leagues want, they could probably sell their other equipment to them too. Most distributors and retailers only buy from a few vendors so when a company licenses a hot new product for a new market, retailers and distributors will pick up that vendor, probably drop another one, and start buying either most or all of the new vendor’s product line.

If your product is only slightly better than the competition, it won’t be considered a hot new product. Your product will be a good licensing candidate for breaking into new markets if people see your product and say, “Wow!”

It is not always easy to know which companies are looking to break into new markets. You can sometimes tell when a company is trying to break into a new market by looking at what products it is introducing. If those products are related to the market they are currently in, but are really geared for a slightly different market, they are probably looking to get into that market. In other cases, a company may just be thinking and investigating. This is where it really helps to have contacts at different companies or industry insiders. Attend trade shows and industry meetings. Get to know people and start asking questions.

Completing a Product Line

Since most distributors and retailers only like to buy from a few vendors, one of the most important considerations for choosing a new vendor is the completeness of its product line. For instance, a chain of grocery stores decides to carry some basic household items. If one vendor has better products, but not all the products they want to carry, they will probably go with a vendor who has all the products they want, even if they think their products aren’t as good. So for vendors (either to distributors or retailers), having a complete product line is a must. But developing new products is expensive and most companies don’t feel like it is worthwhile to develop complimentary products, so they instead look to license them.

When looking to license a product to complete a product line, just look at companies selling to your target market. Are their holes in their product line? If so, does your product fill one of those holes? If they already have a similar product, you will be hard pressed to convince them to license yours. Companies make less money when they license products, so they prefer to stick with their own if they already have them. Your product will really need to be leaps and bounds ahead of their product for them to drop theirs and start selling yours.

How to Find Good Companies for Licensing

To find good potential companies for licensing, you will need to read trade magazines, go to trade shows, attend association and industry meetings and join industry associations. When you attend meeting and trade shows, talk to as many people as you can. At trade shows, good times to talk with people are lull times, early and late in the day and at the hotel restaurant or bar in the evenings. People will be more open to talking during these times since they won’t be so busy. Sales reps are also good contacts since they will know which companies need one of the three benefits listed above.

You need to have a good idea of the industry to know which companies would benefit most from your idea. Also, making all these contacts will help you know who are the right people to contact in each company.

Who to Approach in Companies About Licensing

Marketing and sales people are always the best starting point when approaching a company about licensing. They care the most about having a new product for market excitement, having a full product line and getting more market penetrations. R & D and new business development people often look at licensed products as competition for their own ideas. Concentrate on turning a regional or national sales manager or a marketing person into an advocate for your product and you will raise your chances of licensing the product.

Is Licensing Right for You?

When licensing your product, you will make less per sale than selling it yourself, but in some cases licensing will greatly increase your sales. The licensee will sell the product under its own name, greatly increasing credibility if the licensee is an established market player. These increased volumes can cause you to make more money in the long run. Licensing is usually better for products with a limited shelf life because the licensee will allow you to quickly move into the market. If you have a product that will be hot today, but old news tomorrow, you may miss your window of opportunity if you try to introduce the product yourself. But if you are looking to start a company and introduce other products yourself, you may want to try to sell the product yourself, establishing your brand and allowing you to introduce other products under that same brand. Even if you aren’t looking to start a company, licensing might not work out for you. But there are other options, like Private Label agreements, that will allow you to use another company’s market presence and recognition to increase your sales and allow you to not worry about the marketing of your product.

Related posts:

1. What to Do When Your Attempt to License Your Product Fails – Part 2
2. What to Do When Your Attempt to License Your Product Fails – Part 1
3. How to Make Money on Your Product for Years, Not Months

Most often, when I hear of an inventor who only sells locally, he or she just kind of fell into it. For instance, let’s say that an inventor came up with a great new yard tool specific to his or her geographical location. The inventor only intended to use the tool him or herself, but when neighbors and relatives saw it, they wanted one too. So the inventor makes more products to sell to his or her neighbors and relatives, then their neighbors and relatives see the new tool and also want one. Soon the inventor has a small business going and if there are enough sales the inventor may be happy with the level of sales and not really look to grow. But selling locally can also be your launch pad into regional, national and possibly international sales. Selling locally can hone your sales pitch, product and prove to potential partners, retailers and distributors that your product has what it takes to make it big.

When using local sales to launch your product in a bigger way, you need to document and prove your product’s ability to succeed. You need to attack your local sales in a big way, with PR, demonstrations, and a number of other things to ensure your product sells well. If your sales are slow or stagnate, potential partners, investors, or sales reps might take that as a sign that your product is not a winner. So you need to put maximum effort into these early sales to show your product’s potential.

Why local sales? Local sales are easier, not just because you are closer in proximity. Local products can create good word-of-mouth and PR, making sales easier. Then you document these early, easier sales to convince sales reps, distributors, and retailers in other geographical areas to carry your product.

Getting Your Product into Local Stores

Getting your product into local stores is not always easy, but there are lots of ways you can make it as low-risk as possible for store owners. There are three main ways to make carrying your product low-risk: discounts, consignment and guaranteed sales.

Discounts

Discounts means that you offer a discounted wholesale price, meaning that they will make more money per sale. This still presents a risk for the retailer, but makes your product more attractive.

Selling on consignment

Selling on consignment means that the retailer doesn’t pay you the wholesale price of your product until the product actually sells.

Guaranteed sales

Guaranteed sales simply means that you refund the retailer for any products that don’t sell after a certain amount of time.

These methods help retailers take a chance on your product. Also if you offer to do the steps listed below to help sales, you will increase your chances of them taking on your product.

Key Steps to Selling Locally

Let’s take a look at what it takes to successfully sell locally.

Media Coverage

Local newspapers don’t always have lots of exciting things to write about, so when a local inventor starts selling his or her product, local media will probably be interested in a story. The key here is that an inventor just selling a product is not a story. But if you talk about how you came up with your idea, your process of product development, your current sales efforts and your future plans, that makes a much more exciting story.

Media coverage helps you by getting the word out about your product. Seeing your product featured in a news story also creates more trust in your product than an advertisement. This trust, and the fact that you have a local product, will make people more likely to buy your product.

Word-of-Mouth Advertising

Selling locally also usually creates word-of-mouth advertising. Word-of-mouth just means people telling their friends, families and co-workers about your product. Local products create local interest and can get people talking.

You can help word-of-mouth advertising by getting the right people talking. In every community, there are influential and listened-to people. If you market to these people, or even give out samples, you can get these influential people talking, and other people will listen.

Also in every community there are people who love to spread news. These people know everyone and always have something to say. Getting these people talking about your product will also quickly spread the news.

In-Store Demonstrations

One of the big benefits of selling locally is that it makes it easy for you to be involved in selling your product, even in a retail setting. One of the most effective ways to be involved is by giving out samples or in-store demonstrations.

Most retail decisions are made in a matter of seconds, so it is easy for potential customers to pass over new products. That is why in-store demonstrations or samples are important for new products. Demonstrations grab potential customers’ attention and allow them to touch and try a new product which helps them overcome any hesitation in buying a new and unknown product.

Special Displays

You aren’t able to do in-store demonstrations all the time and during low-traffic times it is probably not worthwhile for you to be in a retail setting waiting for customers. But when you are not able, or when it is not worthwhile, to do demonstrations, you still want to get customers’ attention. For these times, you want special displays. There are a variety of attention grabbing displays out there and if you go to a mall and visit stores, you can get an idea of what might work with your product. Some of the more common ones are end-of-the-isle displays and floor displays.

Sales

Sales are another way to attract attention to your product and help overcome hesitation in buying a new product. If you offer sales or coupons, you will need to pay back the retailer for all the coupons redeemed or sales made.

One tactic that you can also use is a co-op advertising program. When you receive a sales booklet or flyer from a store, manufactures whose products are listed pay for 50 to 100% of the ad in free goods, hoping to generate enough sales to cover their costs. So you might give the retailer 24 products at no cost products to sell if the retailer includes your product in its next circular or newspaper ad. This tactic is especially effective if your plan is to use local sales as a launching pad for bigger market sales.

Using Your Local Success to Take on Regional and National Sales Reps, Distributors and Retail Stores

From the very beginning of your sales, keep careful records, documenting the success of your product. Then use that information as you talk to sales reps, distributors and retail stores. Also take pictures of your product selling or people trying your product at demonstrations to use in your talks. You can approach sales reps, distributors and retailers by simply saying that you have successfully sold your product in your local area, share your sales figures, and say you are looking to expand your sales. If your sales figures are impressive, they will listen.

Related posts:

1. New Service: 20 Action Items to Launch Your Product
2. Selling Your New Product through Carts and Kiosks
3. How to Sell $75,000 worth of Product in One Weekend

Related posts:

1. Get a Free One-Hour Patent Consultation From Ron Reardon

Two Often Overlooked Ways to Sell Your Product

Licensing, selling through the Internet, selling to big box retailers and a few other options are the ways most inventors and entrepreneurs dream of selling their products, but there are many other ways to sell your product. In this article we will discuss two often overlooked options for inventors: starting a service business and business to business sales.

Is Your Product is Better Suited for Starting a Service Business?

Not every product is good for selling. In fact, some products are better to start a service business around. These products either are too complicated to explain, or too complicated for most people to use and they therefore lend themselves to being used by a business. As an example, let’s say you invent a machine that gets rid of pests in backyards and keeps them out. Consumers would have no reason to purchase one of these machines if they cost more than a few hundred dollars. If the product does its job, it may only need to be used once every five years and making a large purchase for a product you use only once in five years doesn’t make a lot of sense. Instead, if there was a company that owned the machine and provided a service once every five years, that makes much more sense. There are other opportunities to sell products like these, like selling to other businesses which we will discuss below. So what kinds of products are well suited for service businesses?

The products that work the best for service businesses provide a service that people recognize they need and search for it; it should fit in the categories of the yellow pages so people will look for you and find you. For instance, in the example we used above, people with pest problems know they need a pest treatment and can find use the yellow pages to or the Internet to find appropriate businesses. The appeal can be limited or mass, just as long people search for your product/service business.

On the other hand, if your product provides a service that people don’t know they need, you will spend large amounts of money on advertising telling people that they need your service. In these cases, you are better off selling to other service businesses. For instance, if you have a product that better protects driveways from different weather conditions, people don’t know that they could protect their driveways and won’t look for your service. But if you sold your product to a company that resurfaces driveways, they could offer the service to customers that are resurfacing their driveways. The driveway resurfacing company would probably have more success selling that service than you could as a separate company.

Selling a service instead of a product also works well when you have a product that is difficult for customers to understand, as long as the benefit of your product is easy to grasp. Many consumers won’t buy a product, or will be very slow to adopt a product, that is difficult to understand or difficult to use. As long as your product gives the desired result, you don’t need to worry about this. Also, many consumers are hesitant to try a product that is vastly different from competing products, but again, by providing a service, you will not face this resistance.

Finally, service businesses are also well suited for products that are very expensive. Customers are very hesitant to buy a product for several thousand dollars, but with a service business you are not limited in the price range of your product since you are just using your product to provide a service. As long as you can recover your investment in the development and manufacturing of your product, your product can cost as little as 1 dollar or as much as millions of dollars.

Starting a service business is in many ways like selling a new product, but instead of selling the product, you are selling the results of your product. But that doesn’t mean you need to downplay your invention, in fact it can be your biggest selling point. Phrases like, “Using a new, patented technology, we can…” can help your business have an edge over existing service businesses in the same market.

Selling Your Product to Other Businesses

There are many instances where selling to a business makes more sense to selling to consumers. Consumers usually make buying decisions in a matter of seconds, but businesses often carefully consider every purchase. This creates opportunities for inventors with products that consumers are unable, unwilling or hesitant to buy.

As we discussed above, when consumers don’t know about a need, you can sell your product to a service company that sells similar services that can then explain the need to customers, but there are many more situations where business to business sales are a good option.

Since businesses are slower to make buying decisions, you have the chance to sell them a product that is difficult to understand, unknown, or vastly different that existing products (all of which can be problems when selling to consumers), but you need to be able to prove that your products works and will provide a real benefit to their business.

Other products that are good for business to business sales are products that are too complicated or too expensive for consumers. Many business to business products also have a stripped down consumer version, but sometimes you can’t strip down your product because it is too complicated. Many products require training to use. Again, this is a hindrance to consumers, but can be a plus for businesses.

They key to businesses to businesses sales is providing great on-going support for your product, training if and when needed, building good long-term relationships with the businesses you work with and provide support for repairs, replacement parts and other consumable items.

Business to business sales are usually in smaller quantities, so having a high margin product is a must.

Another consideration for creating a lasting business is that your product has limited appeal, and therefore limited competition, and that you or a few sales staff can personally stay in touch with most or all of your potential customers. You will need these relationships to make sales and stay on top of the customers’ needs.

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TV also offers opportunities for a wide variety of products, much more so than many other distribution channels. The main attraction of selling through TV is you have a somewhat “captive” audience. Of course they can change the channel at any time, but they are much more likely to listen to your television pitch than to go to a retail store, pick up your product and carefully read the package. Because of this you can introduce products that consumers don’t know they need.

Selling a product consumers don’t know they need is nearly impossible in a retail setting. People are usually in a rush when they go shopping and rarely pick up products that they don’t know they need. But on television, you get a chance to first explain to people why they have a problem that needs solving (there are actually countless problems in our lives that we don’t realize need solving–we have simply gotten used to them or accepted the fact that “that is just how things are”) and then that your product solves that problem for them. TV is one of the only distribution channels that allows you to successfully market such a product.

Also, other distribution channels are often resistant to products way ahead of competition, only because it is not what consumers are used to and they might treat a radically new product with suspicion. Again, not so with TV, a brand new product is perfectly acceptable as well as products that aren’t so brand new, just with a different twist to them.

Products that sell especially well on television are products that have mass appeal and give great demonstrations. Demonstrations, and to a lesser degree before-and-after pictures, get people excited about products and make them believe that they really work and demonstrations of all types are easy to show on television.

Let’s look at an example of selling on TV:

Inventor Story: Maureen Kelly

TV Can Be a Great Way to Launch a New Product

QVC can do much more than increase sales for existing companies — it can be a great place to launch a new product and some companies use it as their main sales channel.  You will need to have a large amount of inventory, but if you are an underfinanced inventor and you get an order from QVC, you should be able to use that as leverage for finding partners or investors.

The TV shopping channels are always looking for the next hot product and if they like your product, they will give it a try, even without having previous sales history.

How to submit a product to QVC:

QVC is always looking for new products and they frequently travel around the country looking for products. QVC makes easy for inventors, even ones that can’t go to one of their product reviews to submit products.  Go to this website for more information on getting your product on QVC:
http://www.vendor.studiopark.com/submit.asp

How to submit  a product to the HSN:

Go to this website for more information on selling your product on the HSN: http://www.hsn.com/become-an-hsn-partner_at-4682_xa.aspx?nolnav=1

Is your inventory of your product too low to sell to QVC, HSN or other major retailers? Email info@onestopinventionshop.net with a short product description, and your web page address, if you have one, and let us see if we can help you.

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