Many inventors get excited about the potential success of their new product idea but don’t know who to involve. They worry about sharing their idea with others in case someone tries to steal it. Here at Idea Reality, we understand how important it is to keep your idea safe, so we always take measures to protect your invention.
But when it comes to launching your product, we often advise that an existing company manufacture and market your product for you. This article should help give you some more insight into what is involved in such a process.
What is a licensing agreement?
If you are looking to go down the licensing route, it would suggest that you want someone to take the hassle of manufacturing and marketing your product for you. Perhaps starting a new business and selling the product yourself does not interest you? Therefore, you will need to find a company willing to take on your product design and draw up a licensing agreement between yourself and that company. In this license, the terms of your partnership will be agreed and will state that they will manufacture, distribute and market your product. This could be under their own brand own name, but importantly you will receive royalty payments as a result.
The licence may not necessarily manufacture or directly sell the product themselves but they will take on responsibility for these tasks and pay for all costs involved. This leaves you free to continue with your career or focus on other projects.
What types of licenses are there?
Non-exclusive license: This is when several companies can produce your product freely. You can compare different manufacturers and see which works best for you before sticking to one. Or perhaps you can keep several on for various marketing purposes. You are also free to manufacture the product yourself.
Sole license: When you give permission to just the one company to manufacture your product. You are still free to manufacture the product yourself if you wish.
Exclusive license: Only the company you choose has the rights to manufacture your product. No-one else, including yourself, can produce your product under this license.
Benefits of licensing your product idea
You should see licensing as finding an ideal business partner; they handle all the manufacturing process, the distribution of the product and all the advertising too. That’s essentially all the heavy-lifting involved with any business. You won’t need to worry about raising capital or establishing relationships with distributors and retailers.
Essentially, your licensee is the one who takes on all the risk involved with producing your product. They are the ones investing funds into their staff, production costs, marketing, etc. Naturally they would really need to believe your product will succeed. You just need to sit back and relax and watch your royalty payments come in.
How do I sell my idea?
If you like the idea of licensing and think that it might be the right path for you and your product, then please get in touch with us and we can help you find the right company to take on your product. Naturally, since it is your invention, you want to see it succeed, so you will want to research companies and see which is right for you. However, you will also need to pitch the product to demonstrate the value to potential licencees. Our team specialise in preparing your pitch with our sales presentations that can help your idea to big shine.
If you do decide to go down the route of manufacturing your idea yourself, we can help there too! Don’t hesitate to get in touch with the team at Idea Reality to help you bring your product idea to reality!