Licensing their products still remains an elusive dream for most inventors. Why is that? The truth is that it's not easy to get licensed, and being ignorant about why a company would want to license a product to begin with makes it even harder. We will explain various tactics for invention submission.
A company gains a partial right to your product in exchange for licensing it (as specified in a licensing agreement) and you get royalty payments in return. They will be responsible for the sales and marketing of the product In order to have intellectual property rights to your product, you are going to have to apply for a patent so the product is licensed and your rights are protected. In order for you to get a company to license your product, you may need to have prototypes, sales results, and above all, market research.
The main reasons companies license products are to stay competitive, to break into new markets, and to complete their product lines. These are the reasons some firms may allow you to submit an invention.
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. These companies begin to view licensing as the only economical option that will continue the innovation and competitiveness of their product line.
So how do you find a company looking to license products to stay competitive? It is more difficult to get marketing leading companies to license your product. It is in your best interest to look for companies striving to run and surpass the market leaders. More profits are to be gained from products that are created within the company, as opposed to licensed product sales (due to the fact that they must make royalty payments) , so to make licensing agreements more appealing for companies, licensing needs to offer additional benefits besides producing sales. The company that will license your idea is the one that will gain the most benefit from it.
Studying information such as market share and industry news will help give you a good indication which companies would be most enthusiastic to license your product. Keep your eye out for newly established companies, or companies having difficulty maintaining a market share.
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. It's a good idea to talk with others at trade shows during lulls in the action, and also early and late in the day at meals in the hotel restaurant, or later in the evening at the hotel bar. Since people are less busy at those times, they'll be more open to conversation. Since sales representatives will know which companies need one of the three benefits listed, they are the good contacts.
In order to know which business organizations will profit the most using your idea, you should have a good idea about the industry. Cultivating a wide range of contacts in the industry will also enable you to know who are the right sort of individuals to contact.
When considering a company for licensing start with the marketing and sales people. The most important things to them are great products to sell and market penetration. R & D departments often view licensees as competitors and hence are less apt to work with them. The potential for actually licensing your product improves if you are successful at getting a regional or national sales manager or marketing figure to promote your item.
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