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Powerful Partners

Why do it yourself when you can have someone else market your invention?

When the time comes for inventors to sell new products, they frequently head down the same, predictable path: targeting small markets and getting small footholds. Eventually, expanding their sales network becomes a top priority-and that calls for selling to big retailers. Small businesses face some marked disadvantages here: they only have one product, and they aren't big enough to guarantee delivery.

How can inventors get around this problem? By private-labeling their products. In this arrangement, inventors market their products under another company's name. Inventors benefit because their products are supported by the marketing power of an established company. Private-label partners benefit because the relationship broadens their product line, which enhances their competitiveness.

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Marilyn Searcy, 46, was wallpapering her home when she got the inspiration for It's a Keeper, an attachment that fastens to the top of a ladder and holds either a 2- or 5-gallon bucket. It's a Keeper lets users keep their tools at arm's length while working. "It's a great product for anyone who's ever had to go up and down a ladder to get the right tool for the job at hand," says Searcy, whose company, Searcy Enterprises, is based in Fremont, California.

Searcy started to sell It's a Keeper herself in 1995, and expects her 2000 sales to exceed million dollars. Looking back, Searcy says she had bigger goals when she started selling her product, but was stymied by her inability to secure larger accounts. "I could never get into the larger retailers," she explains. "I was too small a supplier, without any advertising. Another problem I had was that, at first, my product didn't fit every type of ladder."

Searcy tried to expand her distribution by changing the product. "I improved the product so one model could adjust to fit any ladder in the market. This way a retailer would not have to worry if It's a Keeper would fit the ladders it was buying," says Searcy. But, she explains, the retailers still wouldn't buy. In an effort to penetrate large retail chains once and for all, Searcy decided last year to pursue a private-label arrangement with a major ladder supplier that sold to Wal-Mart, Kmart and Home Depot. At press time, the contract was in its final phase of negotiations, and Searcy hoped to have the deal signed soon.

When entrepreneurs sell their innovations on a private-label basis, those products sell for less than wholesale. But even at the lower price, Searcy will benefit: The agreement will eliminate her marketing and sales costs for that product, and the increased volume will have allowed her to cut manufacturing costs.


Don Debelak is a new-business marketing consultant and the author of Bringing Your Product to Market (John Wiley & Sons). Send him your invention questions at dondebelak@uswest.net.

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This article was originally published in the April 2000 print edition of Entrepreneur with the headline: Powerful Partners.

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