The Top 5 Factors that Make a Company a Good Potential Licensee

The Top 5 Factors that Make a Company a Good Potential Licensee

So many inventors begin the licensing phase of their journey and want to license their product to a company who isn’t an ideal fit for their product. Before you start to pitch your idea to a company to get your product on the shelves, make sure to remember these five things:

  1. The company is a Manufacturer! Not a Retailer or Wholesaler!

You are starting out with a new idea which has not been mass produced, packaged, or marketed yet. The first step in getting your product mass produced, packaged, and on the shelves, is to start with a manufacturer. You do not want to license your product to retailers or wholesalers since they do not have the means to mass produce your product. Some retailers or wholesalers do manufacture products, but they are typically private label brands or store brands and are not actually manufactured by that company, which limits your product to just selling in that store. You want a company that can manufacture and distribute your product to a multitude of wholesalers and/or retailers. This can be done either through direct selling, retail sale, or wholesale.

  1. The company is based in the country you are protected in.

Before licensing your product, you want to ensure you have adequately filed for some sort of protection over your idea. You should have at least a Provisional Application. Your protection is only good in the country you file under. You want to aim for companies that are based in the county that you are protected in. This means you want companies whose Corporate Headquarters are located in your patent’s country. If you have protection in more than one country, you can reach out to companies based in all the countries in which you are protected. But, always make sure the company’s corporate headquarters are located within the country you are protected under before reaching out to them.

  1. The company already produces similar products.

If a company does not make similar products to yours, they may not have the manufacturing means to create your item. For example: Your product is a special new cleaner for electronics. You want a company who already makes electronics cleaners or companies who make cleaning products in general. Companies that make electronics such as laptops or cell phones do not have the means to make your product because they are set up to deal with electronic parts and product materials such as wires, screens, and so forth. They are not set up to deal with cleaning materials and cleaning liquids. You want a company that already makes and has the means to manufacture a liquid, cleaning agent, wipe, or whatever type of cleaner it may be.

Check their website or do a Google search to find out what kind of products they produce. Some companies may produce electronics such as laptops and cleaners for the laptops. If this is the case, reach out to them! Furthermore, make sure the company has similar goals as your product. Your product may be a cleaner for cell phones, but the company only makes laptops and laptop cleaners. They may not be interested or have the means to enter into the cell phone market.

  1. The company may or may not accept external ideas.

When reaching out and talking to these manufacturing companies, you are an outsider. This makes your product an external idea. An internal idea is an idea generated by internal personnel such as the engineer or janitor. Not all companies except external ideas. A lot of the name brand companies already have an internal team to think of new products or are very protective of their brand, but not all are this way. If you do not know if they accept external ideas, reach out to them. If they say they do not except external ideas, move on to the next company.

On the other hand, there are companies out there that do accept external ideas and may even encourage them. Always check the company’s website for new product, new ideas, or innovative idea submission forms. Take advantage of these forms and use them!

  1. The Worse They Can Say is NO.

If a company seems to be a good fit for your company, reach out to them. The worse they can say is no. If they say no, move on to the next company. Do not continue to send them unsolicited information or cold call. Do not take it personally. They may say no because it is not in their budget, not because they do not like your idea. If they do not respond, move on to the next company. Take a no response as a no. Some companies may show interest and willing to take a look at your product and even present it to someone higher up in the company, this does not mean they are saying yes. This means they are interested, but they have to approve it first and check the budget.

Keep in mind, you are going to receive a lot of no’s, but it only takes one yes to get your product on the shelves.

——-

Enhance Product Development is a professional design firm that specializes in launching new products for inventors, entrepreneurs and start ups.  For product development inquiries please contact Enhance Product Development at https://enhancepd.com/contact/ or call us at 877-993-6426.

Related Links:

Enhance Product Development Facebook
Enhance Product Development Twitter
Enhance Product Development YouTube
Enhance Product Development LinkedIn
Enhance Product Development Jobs
Enhance Product Development in the News