Tips to Sell Your Invention to Manufacturers
Matt Yubas, Engineer, MBA, Owner of Product Coach
Manufacturers Are Looking for New Ideas
Today there are many opportunities to get your product to market: retail stores, online, catalogs, TV shopping, and more. And the good news is that manufacturing companies are looking for new ideas.
Benefits of Selling Your Invention
When you sell your invention to a company, you don't have the hassles and expense of manufacturing, marketing, and distribution.
The company you sell to, already has the connections to get products into retail stores and online stores.
When you sell your invention, you receive a lump sum payment or a series of payments. Once you sell your invention, the company has total ownership. Even if the company doesn't turn your invention into a product you keep the payout. Selling an invention is called an assignment.
Inventors Submit Ideas the Wrong Way and Get Rejected
Inventors tell me all the time how they were rejected or just don't hear back from companies. And companies are frustrated in that inventors don't know how to properly submit and present their ideas. Inventors are constantly guilty of causing their good inventions to be rejected by companies.
The common reasons for rejection or never hearing back include:
- Inventors use the wrong method to submit and present to companies
- Inventors don't show how their idea is a fit with the company's product line and target market
- Inventors blindly send information without any market information
- The invention is too costly to manufacture and market
- Invention does not provide enough perceived profit potential for the company
*** I can't emphasize enough that you need to educate yourself about the entire process of selling an invention to a manufacturer. The sooner you discover these methods, the better chance of success. The best do-it-yourself resource is the Invention Success Kit.
Your ideas can benefit the world. But if you don't learn how to find the right companies and don't submit and present the right way, we all lose.
Why Companies Need New Ideas
Companies need new products to grow. Companies are often busy with daily tasks and have less time to be creative to come up with new product ideas.
Companies need new products to increase profit, get to market quicker, beat the competition, and provide more of a selection to their customers.
With companies cutting back on staff, many are looking to the outside for new ideas. They're looking for:
- Kitchen gadgets
- Personal products
- Auto accessories
- Sporting goods
- Home office solutions
- New innovations and technology
Examples of News Articles:
"Firms Looking Outside for Ideas" - Boston Globe
"Looking Outside the Company for Ideas" - Proctor & Gamble
"Looking for Ideas from Small Business" - Dept. of Homeland Security
Companies need new product ideas
Every year, millions of dollars are earned by inventors and entrepreneurs who sell their ideas or license for royalties. The following are some interesting stats of U.S. and Canada retail sales of licensed products:
$16.7 Billion corporate trademarks / brands
$13.7 Billion sports products
$12.2 Billion entertainment / characters
$ 9.2 Billion fashion / apparel
$ 6.2 Billion art
$ 5.6 Billion toys and games
$ 4.6 Billion video games and games
Inventor Gets Stuck with a Bad Deal
An inventor came to me asking for help. He already signed an agreement with a company to license his new heating and ventilation device. He thought they would sell hundreds of thousands of units.
Unfortunately, the company got sidetracked and they sold just under 1,000 units total. Since the inventor did not know about Guaranteed Minimums, he was locked into the contract.
You need to know all
the agreement terms.
Invention Deals that Fail
Do not assume that a company will just figure out your invention. Companies can be flooded with ideas and have little time to review each one unless it's presented in the proper manner.
A survey conducted by the Licensing Executives Society pointed to the following reasons for licensing deal failures. When a company reviews an invention, they most likely don't make an offer because there is:
- An absence of reliable market data
- Limited resources to analyze the opportunity
- Insufficient internal marketing experience
- Absence of any useful data on comparable deals
- Market data too expensive to obtain
*** To improve your chance of success, companies need information from you about the market.
Avoid the Invention Help Submission Companies
Maybe you've seen the websites, TV commercials, or radio spots for invention submission type companies saying how they will help you introduce your invention into the industry.
The first thing they do is get you to buy a market report for about $700. The report is a basic template with basic information - basically worthless. With the report in hand, they tell you that the market research indicates your idea has big potential.
Then for $10,000 to $15,000 they say they will get your invention introduced to manufacturers. They also try to hit you up for marketing programs such as videos and exhibiting your invention at tradeshows.
Manufacturers receive these submission packages all the time, and then throw them straight into the trash. The submission company is off the hook because they said they would submit your ideas to the industry.
The schemes go on and on, and so does your money, with nothing to show for it.
You Need to Follow a Successful Process to Sell Your Invention
To sell to a company, you need to follow the 7-Step process. When you do, you'll have a much better chance of success and reduce the possibility of company rejection.
A big company like Kimberly-Clark that makes and sells products worldwide can afford to make mistakes. They obviously don't want to make a mistake, but if they do, the company can absorb the loss and move forward.
But inventors don't have this luxury. Inventors usually have one chance to make it to the market given the limited time and money available. That's why I created this 7-Step process from idea to market.
The step-by-step process is practical and real-world. And the process uses many methods and resources you can obtain for free.
The Invention Success Kit is Your Blueprint to Sell Your Invention
The details of how to successfully sell your product ideas are found in the Invention Success Kit. The Kit gives you a plan of action, instructions, and examples. The Kit guides you step-by-step as a if I was coaching you through the entire process.
Once you know the proven process, your task will be much easier to get a company to take on your invention.
Matt Yubas, Engineer, MBA, Owner of Product Coach