Getting a Product to Market : writeup
We had a hugely successful event last Friday, January 17th.
All involved were blown away by Steve’s depth and breadth knowledge.
We recorded most of the talk here.
Here are MikeOut‘s notes:
Skateboard brand Flameboy & Wet Willy
Steve likes retail products
walk through stores, pick up box and find a product that would fit
find manuf name on box
contact that manuf directly about your product mockup
-outside submissions- inventor relations – on the manuf website
option fee – 5k to not show it to anyone else – 30-60-90 days while they do their due diligence and test it, manuf cost, etc.
patented products
flipbookit – brought to market
chess2go – at rei, big5 someday – roll up pocket chess game
when you have an idea, will this be made at a price the market will pay for it
is it too expensive to produce?
50,000 items for retail, not 1,000 specialty items
completely self contained light engine that lights up a product using internal refraction in plastic
made this product mass producable, light fitted on
retail $60, walmart sold for $39.
4 or 5 times markup for manuf cost even if self manuf
skateboard is under $10 landed (after shipping, production, warehousing)
% split 40idea/40partner/10inventor/10producer(running around, etc.)
License, don’t make it yourself
licensing agent – has the rolodex, know who to call. 10% too 30% – he will get a product to market
royalty paid on wholesale sales
4% of $25 per skateboard (made at $9) $25 is wholesale price to walmart
retailers like to buy from large manufacturers, not a single line product
not skateboard only, take back product A and replace it with product B
option might be, contract or license or royalty payments
then you get an advance on royalties, non refundable advance
they have to get product to market within a certain amount of time
the closer you can show them an actual product, even with packaging, the easier it is to sell to the manufacturer licensee
NIH = not invented here
“skateboard light engine” patented
in 6 months this could be yours, when license contract expires
could have gone directly to manufacturer – inventors, contact us page on website (many manuf have this on website)
options can bring $5-15k per 3 month option where manuf renew every3 months, or you bring to new manuf every 3 month option
one friend made 2.5MM just on options for a doll to mattel, hasbro, etc.
steve made 100k on options to 2 products that never made it to market
toy inventors fund
ron dubran made tickle me elmo
licensed product fee is split with the inventor (Elmo, Disney, Marvel, etc.)
license fee is between 2-10%
kross brand skateboard, steve and them make 6% instead of 4% (which is split with wet willy license holder)
used to have first to invent patent laws
now we have first to file patent laws
when you have an idea, you have to run off and file a provisional patent
provisional patent is a long long brain dump of everything you can possibly think of filed as a prov patent – get it all out and on to paper and file it with patent office. it is not examined, just sealed and put away. $750 for a prov filing.
file date of prove pat – priority date is 364 days then you file utility patent
everything you say in utility patent has to be in the provisional patent
secret to provisional patent is to put everything in there
no drawings are read in provisional you can put them but not required
patents are good for 20 years – utility patens
you cannot mention the idea to a friend or it immediately goes into the public domain
if you were to disclose to a potential buyer, you would need an nda with that buyer
business case: check your market
mattel makes 70% of their profit from 10% of the product and more came from outside submissions
patent agent – $3500 – is minimum
2 people can file patents: lawyer or agent (or inventor)
prototype: make it as easy and cheaply as you can. make it as close and as quickly as you can to a final product
work from off the shelf stuff as much as you can
asic on board – cob = chip on board
you macgyver the product if possible
always need a try me feature on in-the-box packaging – if there is an active component
acrylic which would break vs polycarbonate which won’t break (you can drive a truck over it)
fulfillment ouse to house products that you build yourself and ship straight from the warehouse
fulfillment center costs about 10% with pick and place at hourly rates, stocking parts, and shipping $0.25 per item in the box)
plus shipping
fulfillment house would do warranty replacement, but for $2.50 each, better to do it in house
finance via kickstarter, po, buy orders, etc. costs 10% maybe
flag waving thingy – if anyone wants to sell them qty 45k in storage
licensing agent can contact manufacturers for you – has to be in the right industry (sports gear, toys, etc.)
licensing agent will come back with ideas for making it better from manuf
shady invention companys, uspto lists shady companies
avoid anyone who asks for money up front for your ideas – invention promoters
in licensing agreements there is “your right to audit”
never quit your job to be an inventor
alibaba.com has an agent that will work for you in china, prosource, charles brishon
to develop products and spend time in the factory helping them design it correctly
hovercraft frisbee with 1 propellor
steve went to toy fair
chinese company manufactured 100k for them and then another 100k to other companies (copied the design and sold it behind his back)
found 6 copies at the toy fair
steve@stevegoldstein.com