In the previous post – Q – Question: How do you License Your Product? – I discussed some of the pros and cons to two licensing approaches: engaging a licensing rep to negotiate an agreement on your behalf; or negotiating directly with manufacturers yourself (rep your product to manufacturers). This post provides a template for the latter approach: being your own rep. I recommend you consult the Asktheinventors.com website for excellent in depth information on licensing.
Everything begins with the list of potential licensees you compiled from your research (see the previous post). Using this list of companies, you should plan a three-pronged approach to rep your product for possible licensing:
1. Contact each company and schedule a short meeting with them
2. Research each company to gain an understanding of their product line
3. Develop a unique strategy or approach for your product for each company
1. Contact: Think of the meeting with a potential licensee as analogous to a job interview: except the “job” is a future business relationship with them; and the candidate is your product, not you. Your presentation, then, is all about them and how your product might further their business objectives by complementing their current product line or might help them gain leverage into a new market segment. Obviously, you cannot do such a presentation without some prior research and preparation (see below).
2. Research each company – look at their website and understand their current product line. If it is a public company, review some of their current 10 Q reports (financial disclosure reports each public company must publish quarterly). The company 10 Q report discloses a lot about the financial success (or lack of it), it also describes a bit about product line strategies: which areas the company is focusing on, and which ones it is diminishing or leaving. From this, you get a sense of the strategic objectives of the company; very helpful information.
3. Develop a unique strategy towards each company for your product based upon your research of the company and their place in the industry. For example, if you are meeting with a smaller more niche competitor in the industry, you might describe to them how your product could help them to grab more market share from one of their larger competitors. If, instead, you are meeting with a large market leader, your approach might be how your product complements their existing line and adds beneficial features to help them increase their market share against smaller competitors.
Via my consulting website, inventor-center.com, I assist clients with strategic planning of this type.
In the next post, we’ll address a different topic: S – Strategies for Manufacturing Your Product Overseas.