When inventors contact my company about Due Diligence I like to describe the reasoning with a simple example. Think about it this way, if a manufacturer is getting ready to make the decision to develop, manufacture, and market a new item that could potentially cost $50,000 to $150,000 to produce plus inventory costs, they would most definitely take their time to ensure that these are creating a good business decision in moving forward with the product (i.e.: they have done their homework on the product). Therefore, you can summarize “research” as the whole process of gathering all the information necessary to make a good business decision before you make the large financial expenditure. It can generally be assumed that the additional time, effort and money (i.e.: “risk”) that a company must spend to develop How To Get A Patent With Inventhelp, the more they will likely evaluate the potential license. Keep in mind that even if a product is apparently easy and inexpensive, the process of developing and manufacturing is rarely basic and affordable. Companies will evaluate such criteria as customer comments, list price points, unit cost to manufacture, competitive landscape, manufacturing feasibility, market opportunity, etc.
Inventors often wonder if they need to perform Research on the invention. As discussed, this will depend on the option you have elected for taking your products or services to advertise.
Option 1 – Manufacturing by yourself – If you are intending on manufacturing and marketing the invention on your own, then yes you need to perform homework. Essentially, you feel the manufacturer from the product and consequently you ought to perform due diligence on your own invention just like other manufacturers would. The problem i have found is that many inventors who opt to manufacture their own inventions do little, if any marketing homework, which is a big mistake.
Option 2 – Licensing for Royalties – if you are intending on licensing for royalties, i believe you can minimize your research efforts, because just before any company licensing your invention, they will perform their own homework. In case you are employing a company like Invention Home, the costs to advertise your invention to companies can be minimal – therefore it could set you back more to completely perform the research than it might to just market the Ideas Inventions to companies (which, is ultimately your very best form of research anyway). Remember, you should have taken enough time to do your basic market research along with a patent search earlier in the process to be reassured that your product or service is worth pursuing to start with (i.e.: the item is not really already on the market and there is a demand).
Let me summarize. If you are planning on investing a large amount of money on your invention, then you should always analyze the chance first to make certain it’s worth pursuing; however, should you can actively promote your invention to companies with minimal cost, you can be reassured that an interested company will work their own due diligence (not count on yours). Note: it is usually helpful to have marketing research information available when you discuss your invention opportunity with prospective companies; however, it is really not always easy to obtain these details so you have to balance the time and effort and cost of gathering the information with the real need for having it.
In addition, i provides you with some homework tips.As discussed, the thought of marketing homework is always to gather as much information as you can to create a well-informed decision on making an investment in any invention. In a perfect world, we may have all the relevant information about sales projections, retail pricing, marketing costs, manufacturing setup and unit costs, competitive analysis, market demand, etc. However, this information may not be simple to come across.
Should you be not in a position to pay an expert firm to accomplish your marketing evaluation, it really is easy to perform the research all on your own; however, you must know that research needs to be interpreted and used for decision-making and alone, it provides no value. It is actually what you use the details that matters. Note: I would recommend that you just do NOT PURCHASE “consumer research” from an Invention Promotion company. Often sold as a “starting point” (they’ll usually approach you again having an expensive “marketing” package), the details are largely useless because it is not specific research on the invention. Rather, it really is off-the-shelf “canned” industry statistics, which will possibly not help you make a knowledgeable decision.
Before we arrive at the “tips”, let me clarify that “due diligence” can come under various names, but essentially all of them mean the same. A few of the terms which i have witnessed to explain the diligence process are:
· Due Diligence
· Marketing Evaluation
· Commercial Potential
· Invention Salability
· Profitably Marketable
· Researching The Market
· Invention Assessment
Each one of these terms is essentially talking about the research to assess the likelihood of your invention’s salability and profitability. The question of whether your invention will sell can never be known with certainty, however you can perform some steps to assist you better comprehend the probability of success.
Again, if you are intending on manufacturing your invention on your own, you should look at performing marketing homework on your own product. If you are intending on licensing your invention for royalties the company licensing your invention should perform this research.
A few recommendations for marketing homework are the following.
1. Ask and answer some elementary questions
– Can be your invention original or has somebody else already think of the invention? Hopefully, you have already answered this query within your basic research. Or even, check trade directories or the Internet.
– Is the invention a solution to a problem? Or even, why you think it can sell?
– Does your invention really solve the situation?
– Can be your invention already on the market? If so, what does your invention offer on the others?
– The number of competing products and competitors can you discover on the market?
– What is the range of cost of the products? Can your products or services fall into this range? Don’t forget to factor in profit and perhaps wholesale pricing and royalty fee, if any.
– Can you position your invention as being a better product?
2. List the advantages and disadvantages that can impact the way your invention sells and objectively evaluate your list
– Demand – will there be a preexisting demand for your invention?
– Market – does a market exists for your invention, and if so, what is the size of the current market?
– Production Capabilities – will it be easy or hard to produce your invention?
– Production Costs – can you have accurate manufacturing costs (both per unit and setup/tooling)?
– Distribution Capabilities – will it be easy or hard to distribute or sell your invention?
– Advanced features – does your invention offer significant improvements over other similar products (speed, size, weight, simplicity of use)?
– Retail Price – do you have a price point advantage or disadvantage?
– Life – will your invention last more than other products?
– Performance – does your invention perform much better than other products (including better, faster output, less noise, better smell, taste, look or feel)?
– Market Barriers – is it difficult or easy to enter your market?
– Regulations and Laws – does your invention require specific regulatory requirements or are available special laws that must definitely be followed (i.e.: FDA approval)
3. Seek advice or input from others (consider confidentiality)
– Target professionals / experts within the field.
– Demand objective feedback and advice.
– Talk to marketing professionals.
– Ask sales agents inside the field.
– Ask people you know in the field.
– Speak with close relatives and buddies whom you trust.
– Request input on the invention like features, benefits, price, and if they could purchase it.
Throughout the diligence stage, existing manufactures have an advantage in this they are able to chat with their clients (retail buyers, wholesalers, etc.). Inside my experience, one of the most crucial elements that a company will consider is whether or not their existing customers would purchase the product. Should I took Inventhelp Products to some company to talk about licensing (assuming they might produce it on the right price point), there is a very high likelihood that they would license the merchandise if one of the top customers decided to sell it off.
Whether a retail buyer is interested in investing in a product is a driving force for companies considering product licensing. I’ve seen many scenarios wherein a company had interest inside an invention but they ultimately atgjlh to pass on the idea since their customer (the retailer) did not show any interest in the product. Conversely, I’ve seen companies with mild interest within an idea who jump with a new product each time a retailer expresses interest inside it.