Ugh! Your Product Already Exists If I Only Knew Then
Save Time and Money by Heeding Lessons I Learned the Hard Way As A Product Professional by April Mitchell
I REMEMBER the moment I had my first “idea” like it was yesterday, as well as all the steps and processes I went through trying to get it licensed and on the market.
I had years of learning what not to do, which helped me learn what to do and get things right. I am thankful for my journey, as it has brought me to where I am today.
But there are still a few things I wish I had known starting out. There is a lot of information out there to sift through; it takes time to learn what you need to do and who you can trust in the industry. In an effort to save you time and money, here are some of the things I wish I had known then.
Become a licensing student
When I started out, I tried to hire a company to get my product in front of other companies to get a licensing deal. Although there are some reputable companies that do this well, the company I hired did not. It was representing so many products that I felt mine was just a number. The company did not care about my invention like I cared about it as an inventor. It did not get it in front of many companies. In fact, after months of waiting, I was able to secure a licensing deal on my own. I learned that it is very important to know and understand the process of licensing so I could be the one to hold the cards.
Patents are situational
Patents cost so much money, often going into five figures. I hired a lawyer right away, because that’s what people told me to do—people who didn’t even really know. I spent lots of money on my first patent, and the product has never made it to market. I still have high hopes it does someday, but if not it was a lot of money spent on learning what to do and what not to do.
I am not a lawyer and am not giving patent advice, but what I have learned is that provisional patent applications (PPAs) are a great place to start. The process gives me 12 months to see if there is interest in my concept before I file a full utility patent, if I so choose. I have also learned that some things are hard to patent and for me, not every product is worth patenting—especially if there isn’t interest from companies to get the product into the market.
I have filed dozens of PPAs and only a few full utility patents. I currently hold two patents and believe they can be extremely important. I now choose which of my products are better suited to spend the money and don’t file for every idea.
Licensing takes time! I had no idea how long it can take to license a product. On average, most people pitch their products from 6 to 12 months before landing a licensing deal. They can be quicker than that or take a lot longer. Once a contract is signed, it can take 1-2 years for your product to make it to the market … which leads me to my next point.
A deal does not mean sales
When I signed my first deal, I was as ecstatic as any first inventor would be! I assumed my product would hit the store shelves and be selling off those shelves. I quickly learned that just because I signed a licensing contract didn’t mean my product would be manufactured and sold at retail. I soon found out that the company I signed with was not as enthusiastic as I was; my product that it initially liked soon fell further down on the list of priorities.
The company didn’t plan to get it out soon, so we ended the contract. It was very unfortunate, but I did learn a lot about what to look for in a licensing contract. That helped me with my next one.
Do the math
How much money will I really make? Royalty checks can have quite the range of outcomes. We want to think the best outcome with money, but we can easily get ahead of ourselves. It is important to know that your royalty as an inventor is based on the wholesale price, not the retail price. The wholesale price is typically at least half the amount of the retail price, or less.
The retail stores will want to at least double the money they paid for each unit, and some will even expect to triple the amount. It is very important to discuss expected wholesale and retail prices with licensees as well as their anticipated yearly sales, so you can understand your potential earnings.
Think long game
When I started with products, it was all about getting them licensed as quickly as I could. I needed to find the right person and fast so I could make things happen! It was all about the product and not the people. This is where I had things wrong.
When I look back at some of my LinkedIn messages and emails, I realize I may not have come across as the most professional. Some of the messages are outright horrible and embarrassing: I just didn’t know what to say or ask, and things didn’t come out right.
I have since learned the importance of building relationships. Sometimes we can ask for help right away when reaching out to someone. Sometimes there needs to be a relationship built before we can ask for help, or to be pointed in the right direction or to the right person.
It is important to know that your royalty as an inventor is based on the wholesale price, not the retail price.
Don’t take it personally
Like many new inventors, I used to take the rejection of my product as a rejection of me personally. Don’t do this to yourself. It’s a hard road to travel when you do, and it’s hard to break free from that thinking. We are in the rejection business, so we have to have the right mind-set. So take the “no” from a company in such a way that you can go right back there to pitch a new idea in a month or two. Keep that door open, and keep showing up. The company will soon start to root for you, too!