*****************************************************************
*****************************************************************
THE ONLINE
INVENTOR –
(c) 2009 Market
Launchers, Inc.
http://www.marketlaunchers.com
Editor:
Paul Niemann
*****************************************************************
*****************************************************************
Dear Inventor –
It’s been a few weeks since the last issue, so here’s
another good article for you. If you
wish to distribute “THE ONLINE INVENTOR” to your local inventor group
or friends, please forward the entire issue, including he message in the middle
from PRIMO Design Imports.
Now,
on with this week’s issue …
Best
Regards,
Paul Niemann
Paul
Niemann
http://www.MarketLaunchers.com
800-337-5758
217-224-8194
******************************************************************
CLEVER QUOTE: “The
best part of inventing is that you don’t always have to get it right the first
time, unlike with brain surgery”… adapted from a quote by Robert Cromier
******************************************************************
“There are only two things that
businesses need”
by Paul Niemann of MarketLaunchers.com
First of all, since you are developing products -- which
includes running the business side of things – from now on I will refer to you
as product developers, rather than as inventors. Anyone can invent something,
but it takes more skill, persistence and hard work to develop the product all
the way to a store shelf before it can be considered a successful new product
(or invention).
There are two things -- only two things -- that businesses
need:
1.
To increase revenues
2.
To decrease expenses
and this is something that you should focus on when you go
to sell or license your new product.
In an oversimplified nutshell, these are the only 2 things
that businesses really need to do, because all businesses are in business to
make a profit. Since you will deal with either manufacturers or retail store
managers, or both, depending on whether you’re planning to manufacture and
sell your product to consumers or license it to an existing business, let’s
look at what motivates these two groups:
RETAIL STORES: When retail store managers make decisions on
which products they will carry, they are concerned with 2 main things: How well
will it sell, and how much profit is there for the store from your product? Do
you really think they care whether they sell more Coke than Pepsi, or vice
versa? If the profit is the same from each brand, then it does not matter to him
which brand he sells the most of in his store. But he doesn’t want to carry
Bubble Up ® because nobody ever bought much of the stuff, and he has a limited
amount of shelf space to give up.
HOW CAN YOU BENEFIT FROM THE RETAIL STORES’ SITUATION?
First of all, to sell directly to the retail stores means
that you will have to manufacture the product yourself, which can get expensive.
But if you can manufacture and sell it, then you increase your chances of having
a company buy you out. Some products start off this way, and it reduces the risk
of the acquiring company that you sell the rights to because you prove that
it’s a successful product with a track record.
(continued after
the break)
**********************************
ADVERTISEMENT:
PRIMO Design Imports, Ltd:
ARE
YOU THINKING OF HAVING YOUR INVENTION MANUFACTERED OVERSEAS?
If
you want to have your invention manufactured overseas, but don’t know where to
turn, WE CAN HELP
...
·
Direct Importer & Invention Manufacturer
·
One-on-One
·
Free Cost Evaluation on Producing & Delivering Your Invention
·
Qualified Account Representative to Handle Your Account
Contact Us Today
Tel: 310-324-7900 ext. 103
**********************************
MANUFACTURERS: Manufacturers need new products
continuously, and this is a big expense for them. It is an expensive 5-stage
process of generating new product ideas, screening out the bad ones, evaluating
the concepts with consumers and middlemen (i.e. wholesalers and retailers),
estimating the profitability, test marketing and rolling out the product
nationally. And that’s even if the product SUCCEEDS!
What if it fails? Then all that work and expense is lost
forever, with no revenues to show for it.
HOW CAN YOU BENEFIT FROM THE MANUFACTURERS’ SITUATION?
Two ways: First, you provide them with ideas that they
might not have thought of themselves (increase revenues). A little
outside-the-box is good for anyone. Second, by developing the product yourself
and paying the costs as you go, the company saves money from developing a new
product itself (decrease expenses).
I mentioned 5 stages or steps in New Product Development.
Well, a research study by a leading consulting firm many years ago estimated the
costs of each stage, and the number of product ideas that survive to the next
stage, as follows:
Generating new product ideas ($1,000 each). Start with 64
ideas x $1,000 each = $64,000.
Screening out the bad ones ($2,000 each). The 64 original
ideas get reduced to 16 ideas x $2,000 each = $32,000.
Evaluating the concepts with consumers and middlemen,
including focus groups ($5,000 each). The 16 ideas get reduced to 8 ideas x
$5,000 each = $40,000.
Estimating the profitability and test marketing in 2
markets ($100,000 each). The 8 ideas get reduced to 2 ideas x $100,000 each =
$200,000.
and …
Rolling out the product nationally ($1,000,000 each). One
of the two test-marketed products succeeds x 1 = $1,000,000.
The grand total in this situation is $1,336,000 for 1
successful new product!
Now are you convinced that a company should be open-minded
when an inventor comes calling???
#
# #
******************************************************************