Getting What You Pay For
Having worked with thousands of inventors, we are constantly learning about the obstacles that have obstructed their product’s path to market. One might believe that the majority of hurdles are erected by the industry itself; by licensing companies who are unwilling to hear about your idea; by small retailers whose profit margins are minimal; by manufacturers who won’t produce an affordable prototype. In fact, these problems are easily avoidable. They arise only as a result of the inventor’s most harmful, easily-avoidable pitfall: a reluctance to invest your own capital.
Many inventors we’ve worked with have, at some point during their journey, bought into the illusion that if their product is good enough, interested, reputable licensees will seek them out, or will eagerly hear their pitches, hopeful that the product will make it to market on its own merits, with little financial investment. Unfortunately, many of the best ideas out there are gathering dust, specifically because the inventor is unwilling to invest the necessary capital.
To ensure that a licensed product is successful, licensing companies invest hundreds of thousands in manufacturing, packaging, shooting a commercial, distribution, marketing campaigns, etc. They only make such massive investments on product they are confident will generate a profit for them. Every day they receive unsolicited pitches in the form of email, letters, or prototypes, from inventors who have no business plan, or knowledge of the market. It’s not the inventor’s job to know these things. The inventor’s only job is to invent. However, though an inventor may have a truly promising product, with real potential, it’s unlikely that a licensee would risk their vast resources on an underprepared, unrepresented client. With minimal financial investment, the inventor can enlist a partner in Lightning Launch, with long-standing relationships with reputable licensees, knowledge of the market, ability to form a cohesive business plan, and once a deal is secured, ensure that that deal is numerically in the inventor’s best-interest.
It can be much easier for inventors to independently sell their product in specialty retail, because retailers risk less, or none, of their own resources when they stock a product on their shelves, or host it on their website. We’ve worked with many inventors who tell us about previous retail relationships, in online stores, catalogues, etc. in which they sold units, but didn’t make much profit. The reason for this has nothing to do with the retailer, or even the product itself; it has to do with the product’s branding, and how it is presented to consumers. For a product to have maximum impact on potential consumers, and reach a vast audience, the inventor needs to really view the endeavor as a business, and take a holistic approach. In addition to creating professional sales materials that are essential to reaching larger retailers, a strong social media and web presence needs to be maintained, with constant promotions, updates, blog posts, etc., which not only serve to educate, but also direct consumers to ongoing sales. Another important (and expensive) aspect of brand building is attending trade shows, where many buyers and retailers are present, and constantly looking for new products. However, many inventors go about this process in the wrong way. In an attempt to be thrifty, they rely on sales reps to get their product into retail, manage their web presence on their own, and attend trade shows independently. As we’ve discussed in other posts, because sales reps rely solely on commission, and take hundreds of products onto their roster, they often only focus on the few they perceive to be the biggest earners, while ignoring the rest. While you may not be wasting vast amounts of money on a sales rep, you are wasting your time, which is perhaps more valuable in this industry. And when inventors attend trade shows, they do so having spent thousands on entry fees, booths, and advertising materials, and leave with nothing more than promises and business cards. While this may not represent a reluctance to invest capital, it does speak to the tendency to invest capital in the wrong ways, in the interest of maintaining “control.” To us, it is important that inventors retain control of their product, while also spending their money wisely. For a smaller investment than it would cost to attend most trade shows, Lightning Launch will manage your brand, hone your messaging, pursue retail opportunities that will generate the largest profit margins, and effectively represent the product at industry shows.
If you’re serious about achieving success, and truly believe in the potential of your product, the greatest disservice would be to sit on your hands waiting for a risk-free opportunity. It’s not only important to take financial risks, but to allow the right partner to help you calculate those risks, and make sure your money is being put to work.