When inventors contact my company about Due Diligence I like to explain the idea 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 product which could potentially cost $50,000 to $150,000 to produce plus inventory costs, they would most definitely take their time to ensure they may be building a good business decision in advancing using the product (i.e.: have they done their homework on the product). Therefore, you can sum up “homework” as the 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 cash (i.e.: “risk”) that a company must spend to develop Inventhelp Reviews, the more they will likely evaluate the potential license. Keep in mind that even if a product is apparently simple and low cost, the whole process of developing and manufacturing is rarely easy and low cost. Companies will evaluate such criteria as customer comments, retail price points, unit cost to produce, competitive landscape, manufacturing feasibility, market opportunity, etc.
Inventors often wonder if they need to perform Homework on their invention. As discussed, this can depend on the option you might have elected for taking your product to advertise.
Option 1 – Manufacturing on your own – If you are intending on manufacturing and marketing the invention all on your own, then yes you need to perform research. Essentially, you feel the producer of the product and consequently you should perform research on your invention just like other manufacturers would. The situation which i have found is that many inventors who elect to manufacture their very own inventions do little, if any marketing homework, which is actually a big mistake.
Option 2 – Licensing for Royalties – if you are intending on licensing for royalties, then I believe you can minimize your due diligence efforts, because just before any company licensing your invention, they will perform their own research. In case you are employing a company including Invention Home, the expenses to advertise your invention to companies can be minimal – therefore it might cost you more to completely perform homework than it would to just market the Inventhelp Caveman Commercials to companies (which, is ultimately the best kind of due diligence anyway). Remember, you ought to have taken enough time to do your basic researching the market as well as a patent search earlier along the way to be confident that your product is worth pursuing in the first place (i.e.: the merchandise is not already on the market and there exists a demand).
Let me summarize. If you are intending on investing a large amount of cash on your invention, then you should always analyze an opportunity first to make sure it’s worth pursuing; however, should you can actively market your invention to companies with minimal cost, you can be confident that an interested company will do their own due diligence (not rely on yours). Note: it is always useful to have marketing due diligence information available as you discuss your invention opportunity with prospective companies; however, it is really not easy to acquire this info so you have to balance the effort and expense of gathering the details using the real necessity of having it.
In addition, i will provide you with some homework tips.As discussed, the idea of marketing homework is to gain as much information as you can to produce a well-informed decision on making an investment in any invention. In a perfect world, we may have all the appropriate information on sales projections, retail pricing, marketing costs, manufacturing setup and unit costs, competitive analysis, market demand, etc. However, this information may not be simple to find.
If you are not in a position to cover a specialist firm to perform your marketing evaluation, it really is possible to perform research on your own; however, you must know that research should be interpreted and employed for decision-making and on its own, it provides no value. It really is what you use the data that matters. Note: I might recommend that you simply do NOT PURCHASE “consumer research” from an Invention Promotion company. Often sold as being a “starting point” (they’ll usually approach you again having an expensive “marketing” package), the details are largely useless as it is not specific research on your invention. Rather, it is off-the-shelf “canned” industry statistics, which will possibly not assist you in making an educated decision.
Before we get to the “tips”, let me clarify that “due diligence” can come under various names, but essentially all of them mean the same. A number of the terms i have experienced to describe the diligence process are:
· Marketing Evaluation
· Commercial Potential
· Invention Salability
· Profitably Marketable
· Researching The Market
· Invention Assessment
All these terms is actually discussing the study to gauge the chance of an invention’s salability and profitability. The question of whether your invention will sell can not be known with certainty, however, you can perform some steps that will help you better comprehend the likelihood of success.
Again, if you are planning on manufacturing your invention by yourself, you should look at performing marketing research on your own product. If you are intending on licensing your invention for royalties the company licensing your invention should perform this research.
Some suggestions for marketing due diligence are highlighted below.
1. Ask and answer some fundamental questions
– Is the invention original or has another person already come up with the invention? Hopefully, you have already answered this query inside your basic research. Otherwise, check trade directories or the Internet.
– Can be your invention a solution to a problem? Or even, why do you reckon it can sell?
– Does your invention really solve the issue?
– Is your invention already on the market? If you have, what does your invention offer on the others?
– The amount of competing products and competitors can you discover on the market?
– Exactly what is the range of price of these products? Can your product fall into this range? Don’t forget to aspect in profit and possibly wholesale pricing and royalty fee, if any.
– Can you position your invention as a better product?
2. List the pros and cons that can impact the way your invention sells and objectively evaluate your list
– Demand – can there be an existing need for your invention?
– Market – does a market are available for your invention, and when so, what is the scale of the current market?
– Production Capabilities – will it be easy or challenging to produce your invention?
– Production Costs – can you obtain accurate manufacturing costs (both per unit and setup/tooling)?
– Distribution Capabilities – might 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, convenience)?
– Retail Price – have you got a price point advantage or disadvantage?
– Life – will your invention last more than other products?
– Performance – does your invention perform better than other products (including better, faster output, less noise, better smell, taste, look or feel)?
– Market Barriers – is it difficult or simple to enter your market?
– Regulations and Laws – does your invention require specific regulatory requirements or are available special laws that really must be followed (i.e.: FDA approval)
3. Seek advice or input from others (consider confidentiality)
– Target professionals / experts within the field.
– Ask for objective feedback and advice.
– Talk to marketing professionals.
– Ask sales people inside the field.
– Ask people you know in the field.
– Speak with close relatives and buddies that you trust.
– Ask for input on the invention including features, benefits, price, and if they would purchase it.
During the diligence stage, existing manufactures provide an advantage in this they have the capacity to chat with their clients (retail buyers, wholesalers, etc.). In my experience, one of the most important factors that the company will consider is if their existing customers would get the product. Basically If I took I Have An Invention Where Do I Start to a company to discuss licensing (assuming they can produce it on the right price point), there exists a high likelihood which they would license the merchandise if a person of their top customers decided to sell it.
Whether a retail buyer has an interest in buying a product is a driving force for companies considering product licensing. I’ve seen many scenarios wherein a company had interest within an invention nevertheless they ultimately atgjlh to move on the idea as their customer (the retailer) did not show any interest in the product. Conversely, I’ve seen companies with mild interest in an idea who jump in a new product whenever a retailer expresses interest within it.