How To Market Your Own Invention

The steps below will give an inventor a general idea of the process for marketing a product-invention. These steps should follow those that have already been completed for protecting and patenting an invention, so that it is ready for public disclosure.

1. Incorporate. With the possible risks of “product liability” and patent lawsuits, an inventor should “incorporate”, meaning form a corporation or form a “Limited Liability Company” (LLC) so that you become a corporate entity or company and not remain a liable individual. This may seem like a strange step but it is a necessary one, in order to reduce the risk of someone pursuing you as an individual for patent infringement, or to contest your patent, or for product liability, meaning an injury lawsuit from use of your product.

    

   While these possibilities of being sued are statistically small, they do happen and if you form a corporation of partners, the corporation becomes a separate entity from you. If a lawsuit were to be filed, whether real or imagined (frivolous), the party suing would have to go after the assets of the corporation, rather than your personal assets. This offers you some protection by forming a corporation or LLC which in addition to being separate legal entities, they are also offered certain protections under the law and important benefits as well.

   If you need partners to invest in the marketing of your invention, for a percentage of ownership, these investors can become your corporate partners or “officers of the corporation”. If you do not need investors, you can simply form a corporation with family members and/or friends. You will need to check with an attorney in your city or find an agent online who sets up corporations in your state. This person will help you file your articles of incorporation (includes naming officers) and help you get approval for your business name, through your state’s corporations office. The fee to incorporate can range from $100.00 to $800.00, depending on the state where you incorporate.

2. Research what it will take to manufacture your product-invention, such as tooling, molding, warehousing and labor. That way, you can determine whether you can feasibly manufacture it or instead will need to contract a company to manufacture it for you. This is one of the more difficult steps because of the research it requires.

   You need to determine what materials and manufacturing machinery you will need to make your invention. For each piece of material or machinery needed, you should contact several sources to get the best prices possible. If you can get by with a barn or a garage at first to use as your manufacturing facility and warehouse, this too is a consideration; having to build a facility can be a very large expense. Another consideration when establishing a manufacturing/warehousing facility is to look into the possibility of renting a building.

   Once you have looked at all of the combined expenses for manufacturing your product, you can from there decide if it is more in your interest to do so yourself, or to contract a manufacturer to do so for you. Some manufacturers who already have the machinery will only charge you a per-unit price for completed units of your product. This can sometimes be the most cost effective way to go with manufacturing an invention.

3. Design packaging for your product and make it as appealing as possible. Packaging has a great deal to do with how well your product will sell. An inventor and his partners should come up with a basic design for packaging their product and possibly look at several variations of how to use the design. The design itself would be your picture(s) and wording on your package and how it is laid out. The variation of it would be the type container you use.

   Some products can be placed into a plastic bag, with a header card at the top that is stapled on, while others need to be in a box with the design on the outside of it. There are also “clamshell” packages or what are also called “blister-packs”, but these are somewhat more expensive because they are plastic pieces, molded by a manufacturer and they usually require you to order large minimums of these. An inventor must decide which of these types of packaging are most cost effective for their invention because the added expense of packaging will affect the final retail of the product.

   When designing the packaging, an inventor should have the goal of making the design eye-catching and appealing but not go overboard and make the design look like an overkill (gaudy). There is a psychology to package design and the goal is to increase sales by attracting consumers to your product.

4. Obtain “product liability insurance” for your product. This step insures that if you have a lawsuit filed against you, by a user of your product, you are covered by your product liability insurance. How dangerous or threatening your product is, or how non-threatening and safe it is, determines the cost of your insurance premiums (cost for coverage). For example, if an inventor’s product is something that improves the performance of a firearm, this could increase insurance premiums considerably. However, if an inventor’s product is a new type of pillow to make an easy chair more comfortable, the premiums on the product liability policy will likely be very low.

   Product liability insurance is usually coverage of at least $1,000,000.00. However, depending upon the product being covered your monthly insurance premiums might not exceed $50.00 to $100.00 per month.

   There are retail stores and outlets that require their vendors to carry product liability insurance or they will not consider carrying their products. This is true of the major chains as well, including Wal-Marts and Target Stores, Bass Pro Shops etc… Based on all expenses to market your product, set your distributor and wholesale price, so that you make the amount of profit you need.

5. Set your price. After you have researched everything and have a very firm price on everything it will require to manufacture your product, from there you will be able to set your price for making a profit. With all expenses figured into manufacturing finished units, you need to add your profit-percentage on top of that, so that you are making the profit needed when selling to distributors and retailers.

   Distributors are companies who buy from manufacturers and resell the product to retailers. You will also likely sell to retailers yourself. Distributors usually need approximately 30% markup, when selling to retailers. Retailers usually need to make approximately 40% when they sell your product to consumers. You need to set your price to either, so that you are making the percentage of profit you need but that will also keep the retail at an affordable amount for the consumer.

6. Try to establish the sales appeal of your product, also called a “sales track record”, which will increase the interest in retail outlets buying your product. This step involves finding ways to show how saleable your product is. You can do this by offering your product for sale through magazine ads, online, at booth shows, via a television commercial or by selling it in a number of stores as a test-market.

   When using any of these methods, you want to promote your product the best you possibly can, in order to have the best possible recorded sales to present to retail outlets you approach to carry your product. If this results in stores carrying your product, you continue to record the sales you get through new outlets and this gives you an ongoing record of your product’s sales appeal. Over time, a successful sales track record will continue to help you expand into larger outlets and chain stores.

While the above steps are somewhat simplified, they give a general idea of what is involved in getting an invention marketed. Some inventors do not desire to go through this complicated process and so will instead pursue a “Licensing Agreement” for their invention. This is a contract that grants rights to a manufacturer to manufacture and sell an invention and pay the inventor a royalty percentage. Manufacturing an invention on your own will bring a larger profit percentage because royalties are relatively small in comparison. But all duties are the inventor’s to perform. With a licensing, the manufacturing/marketing company performs all the duties for you.