Distribution is typically the last thing considered. People go to the time and expense of patenting their ideas, making prototypes and producing an initial volume of products without considering whether their product is worth pursuing or how it will be sold. They rarely get off the ground.
How do you know if your product is worth pursuing? There is no simple answer. More important than a good idea are your willingness to adjust to market needs and an ability to develop contacts in your distribution network. Here are five guidelines to help you determine whether your idea will be easy to introduce:
1. The product is easy to distribute. Look for markets where a distribution channel already exists and is receptive to new products from one-product manufacturers.
2. The technology is simple. Complicated products often require extensive product development costs beyond the resources of inventors.
3. The product is perceived to be unique. Most distribution networks don't like one-product companies because dealing with them is just as much work as buying 15 products from a larger vendor. To overcome this obstacle, your product must offer benefits not available elsewhere.
4. The benefit to consumers is obvious. Your product must sell itself in a few seconds.
5. The retail price is at least four times your manufacturing cost. Otherwise, you won't make any money after paying vendors, sales agents and overhead costs.
Most ideas don't meet all five criteria at first but require modification. If you can't answer the questions, find someone in your distribution network who can: a store manager, wholesaler's or distributor's salesperson, or a marketing person at a manufacturer in your industry.
What if you've got a good idea but don't want to handle all the steps yourself? One option is licensing (see "Inventions" on page 74 for more on this topic); another is an invention marketing firm. These firms have gotten a bad reputation as a result of media expos? of shady companies that promise huge payoffs, collect a huge fee??? but don't do anything to actually sell or license your invention. While there are some legitimate firms out there, be sure to get three things in writing before paying any firm promising to help you:
1. An itemized list of the work the company will perform. No firm can promise to make you money, but they should be able to prove they will provide promised services. Ask for and check references.
2. An explanation of what the work performed will accomplish. For example, from a patent attorney, do you simply want to get a patent--or a patent that prevents competition? Will a prototype be a rough representation of your product, or will it look just like the finished product?
3. An estimate of future costs. The company should detail any additional expenses to get to the final product. Ask the prototype shop what it costs to go from a rough model to one that looks like the finished product. Don't proceed with the first step if you can't afford additional steps.
As the entrepreneurs profiled here illustrate, you should start thinking about how to distribute your product right after you come up with your idea. This helps you create a more marketable product, develop it faster and generate more sales momentum from the beginning.