Invention tips and warnings
Invention Tip 1: An idea is not an invention, companies rarely pay for ideas.
Invention tip 1 is that anything can go wrong with an invention idea no matter how good it seems. Silly things can disable an idea like current fashion not favouring the inventor, certain heads or executives of companies not being able to see the brilliance of the inventor’s invention idea or innovation like the inventor does, things like a great product wrongly packaged or poorly marketed. Companies will normally pay for a business that has a good product that they can add to their range. They can then see if the business is growing, they can survey the product’s acceptance in the marketplace and can therefore forecast the profits that may be earned and that will give them a value of your product or business for which they would be willing to pay. So invention tip 1 is that in most instances the inventor needs to progress from their idea to a real invention and then to a business to prove its worth before they can put a value on it.
If you have an invention idea or innovation, try to find out whether there is a market for your invention or product. You may have to produce a prototype to show people which can often be produced with a 3D printer even if it has to be scaled down in size.
Check appropriate sources to see if your invention idea or innovation already exists in the public domain or as Intellectual Property. Use magazines, publications, Yellow Pages and the internet (Google) to find anything similar. Check the patent searching sites on the internet including “Google Patents”. Do not discuss your idea with anyone if possible.
The market determines the value of the product not the inventor
The inventor may think that he or she has a great invention idea that is worth millions or zillions of dollars, but the market will determine how much it is worth, not the inventor. A product, idea, innovation, invention or business is only worth what someone else is willing to pay for it. A survey of companies indicated that an inventor’s most common blunders are greed, distrust and hesitation so keep this in mind when thinking of the income from the product.
Invention Tip 2: Do not pay any money in advance to a company regarding your invention until you find out exactly what you are getting for your money.
Invention tip 2 is that if an organisation offers to develop an inventor’s patent , innovation or invention idea they should be very careful and not let greed cloud their good sense. History has shown that inventors are easy prey to scammers who promise to evaluate, patent, manufacture and market their product. All they have to say is ” Wow, that is a great idea!” and inventors are putty in their hands.
First they do an assessment at the inventor’s cost and come back of course with a glowing appraisal. Next they promise to contact thousands of investors or companies that would be interested and that will cost them a lot more. Next they promise to patent it which will increase the costs further. Most times the results are nil so after the inventor has spent a lot of money they charge them a much higher cost to advertise to a wider, worldwide audience with assurances that they will get plenty of offers. Usually there are none. Ask yourself are the companies indicating they will assist with aspects of the invention or are they just involved in marketing?
So invention tip 2 is If you approach an Invention Promoter then request the following information: How many inventions have they evaluated? How many of the inventions presented got positive or negative evaluations and the total number of happy, satisfied inventors. How many of those inventors received a net profit from the promoters services. How many of their inventors have licensed their inventions or innovations due to the promoters services? What are their contact details?
Invention Tip 3: Is your idea economically feasible?
After the inventor has found that there is a market for their product and they know what colour, size or other configuration it should be produced in then invention tip 3 is to check to see if the invention idea or innovation is economically feasible. Are the inventor’s manufacturing costs and overheads sufficiently low for them to make an adequate profit. In most cases they will need distributors to sell their product because they already have customers coming to them to buy such items.
Inventors need to try and sell at retail from 4 to 10 times the manufacturing cost. They may have to give discounts from the retail (or “list”) price of up to 40% to the retailer who orders bigger volumes and 60% discount to the wholesaler, especially if the wholesaler is overseas. Then the inventor needs to add the cost of freight. So with a $100 item, the bigger retailer will buy at less 40% ($60), the wholesaler will buy at less 60% ($40), freight costs might be $6 which leaves the inventor with a selling price of $34. So to make a profit of 100% the inventor needs to pay $17 for the item to be manufactured and properly packaged. That $100 list price is just under 6 times the manufacturing price so remember inventor tip 3 to make sure your invention idea is economically feasible.
Invention Tip 4: Selling your product or service over the internet and advertising
Inventors are tempted to market direct by contacting buyers themselves and using the internet, advertising and websites to market their product. Most advertising produces enquiries that are about 0.5% of the total audience of the advertising. So a local paper ad to 20,000 households might give you 100 enquiries if you are a big ad on the front page so you are seen. Small ads are not often seen, boring ads are not seen. The right hand side will be noticed more than a left hand page. What if the circulation volumes are poorly stated and there are not that many distributed at all? What if they go to old people predominantly who are not going to buy your product?
If you use a website do you know about “keywords”? Use the wrong ones and you will never get anyone looking at your site. Worse still, use no keywords and you will get no visitors. Making money from a website audience will only begin once you have around 200 new visitors a day, or 73,000 new visitors a year. How are they going to know you exist? You have to be quite skilled in the techniques to make this work, all the hype is true if you pay experts to set everything up and you have a big budget. Even the bigger companies rely on lots of other advertising to send people to their websites. You can do it if you know what you are doing and target a very specific audience for your product. So invention tip 4 is to thoroughly investigate whether to sell your product direct or to sell it through distributors.
Invention Tip 5: Confidentiality and alternatives
Inventors must approach agents, manufacturers, or companies with a proposal, so they should try to take a confidentiality agreement (available from Innovic website) with them and get it signed. Many companies will not sign one because the inventor’s idea might have already been thought of by them, but not yet developed. So by signing an agreement without knowing what it is they might not be able to produce their own product in the future. An alternative is to divulge enough information to interest them, but not enough detail for them to understand its operation. So invention tip 5 is to secure your confidentiality one way or another.
Invention tip 6: Patent searching, drafting and alternatives
Be aware when doing patent searches that all information on inventions is not contained in Intellectual Property office files; their files probably contain something less than half of published data. The rest of the information is already in the public domain in magazines, newspapers, websites etc. and often this is what large companies get their researchers to investigate to invalidate patents to avoid paying commissions or royalties.
If you are preparing a Patent yourself or hiring somebody to do it for you then ensure that where a material such as stainless steel, brass, gold or ceramic is required that you specify the properties of the the material and not what the material itself is to be. For example if the invention requires oil or water then list it as a fluid not what it actually is because if you specify a material and somebody copies your invention using a different metal or fluid then your patent will not hold up under examination against the competing model. Be as vague as possible in your specifications so that if they are rejected you can tighten them up and resubmit, but if they are tight to begin with you will have nowhere to go if they are rejected.
A cheaper alternative for inventors to patenting is to source your components from different manufacturers which makes it hard for anyone to copy. Low volume products that go to a diverse distributorship are rarely copied anyway.
Good luck with your invention, these tips and more are given by our guest speakers throughout the year although you may have to attend regularly to hear what you need. Our feasibility committee will also give you this type of advice and you can ask questions during networking and supper of other inventors or a committee member.
You can join IAA(Vic) here and save yourself a lot of time and mistakes