How do we set up a royalty agreement with a manufacturer?
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Opinions expressed by Entrepreneur contributors are their own.Put simply, yes, you should accept your situation and work with them to secure a deal. That said, there are some preparation points you should take care of prior to going in. Talk about your product design and description with your attorney. It's important to have an outside witness to your product.
Next, aim for a non-compete, non-disclosure being signed before you present it. Now, there's about a 50/50 chance that the company will sign this. I know my companies have a policy of not signing, because most ideas are things we have already got on the table. You have to decide there and then whether you are willing to trust if they don't sign. I would just move ahead.
So, assuming they buy the idea of your product and want to pay you for it, they will either make a lump sum cash offer or a royalty offer like you want. This is where negotiation comes in. Once you have a deal, have the lawyers draw up the papers and move forward. It's not complex but it's also not easy--it depends on negotiation skills.
All the best,