Selling your invention
Selling your invention to an investor
Below are some of the things we have learned about selling your invention from our guest speakers
Investors understand that nobody really knows the potential of a good idea like the inventor does so it is much better if the inventor is building a business that the investor puts money into rather than the investor trying to find another person to develop the market for the invention even if he owns a business that sells similar products the new product can get lost and not produce its potential without an enthusiastic person behind it.
So the investor normally needs to believe in you and invest in you before he will invest in the invention. When selling your invention to an investor you should have conducted market research to show how much demand there is for it and you should have completed a business plan showing the value opportunity to the investor. We have had guest speakers showing us how to do this and they run short courses at low cost to help inventors develop this value statement with supporting facts.
Selling your invention to a retailer
The first tip is not to approach the technical team (who may ruin your presentation). Too many times the engineer employed by the company you approach when selling your invention thinks it is his job to find the problems with your invention and sometimes they are jealous because you have come up with a better idea than themselves. They are being paid to do that so they may feel uncomfortable making you look good.
The second tip is to show how your product can increase market share for the company so that they can win more sales from their competitors.
If you approach all the competitors then there is no advantage for one of them. If your product is clearly better than their existing product then there is no reason for them to change if it only makes the same amount of money for them. Research the market and show the Marketing Manager how your invention will win more market share rather than just replace something already on the shelf.
Another overlooked aspect for inventors is that the consumable is often the most valuable part, not the invention that uses the consumable. A good product might sell once, but consumables can sell forever. A better electric sanding machine is good, but if it uses your unique sanding papers it will be much better. When selling your invention to a retailer try to develop a consumable for it which will make you and the retailer more money.
Become a member and start learning now
Inventors have learned these and many other things from the New Inventor Pack that is sent to all new members and from our guest speakers at monthly meetings.
We believe that becoming a member of our association is the fastest way to learn about selling your invention successfully. We do not have all the answers, it is a learning experience and we are continually bringing relevant information to you.
When you become a member you will have access to our past newsletters including a database search of those so you can quickly find what your main interest. You will also have access to our videos of meetings so you can hear the entire presentation.
The majority of inventors want to sell their good idea.
Inventors come up with good ideas and most think that selling their invention will be easy if they find the right person. We all wish it was and most of us have tried to go down that pathway to instant riches which we have found to be unrealistic.
Be careful of scammers
We are an association to help inventors and part of that help is to warn of the many scams that exist in this area. If you see a company on the internet that assures you they can sell or market or develop your invention for you make sure you type into google “complaints problems (use the name of the organisation without the brackets)”. We found the following at complaints Davison and it explains what many of our members have been through with other companies and the money they lost is similar. We only charge a modest membership fee and we try to help inventors with advice, information and direction.
BUYER BEWARE… I have been with Davison since December 2013. I was very excited to take my invention and bring it into fruition, and Stanley ** who worked there at the time was more than excited to tell me all the great things they can do for me once I paid close to $10,000 to make this happen for me. Stanley said that they have tons of prospects to bring this into fruition. Resources I never dreamed of. That they have contacts that I could never tap into. This is what they do, attend trade shows on my behalf and pursue prospects endlessly. They gave me a great prospect of who they will bring my plastic bottle to. It turns out that this company I could of shown just as easily too myself.
After I been rejected, they proposed another prospect. I research this prospect and I said it didn’t believe it was a good match and I didn’t want to pay Davison more money to re-package it and send it to them. Who else could I see as a potential client. That’s when they said that is all they have at this time but every week new opportunities present itself. Well it’s been close to 4 years and I never get an email or phone call from them. I don’t even have a representative now on my behalf. They all left.
I would call Davison and suggest things to help move this forward, also that their design would never work because the coloring is too expensive for a plastic bottle and if they could make a clear version of it, I said this from day 1. I would tell them there is a trade show for plastic bottles in Vegas, how about you put someone on a plane to attend this show as I was told by Stanley you would do from time to time.
By the way I drove up to the Davison outside of Pittsburg Pa and surprised Stanley with my visit. Stanley did come out to say hi, but could not show me the plant facilities without an appointment beforehand to see their Willy Wonka Land facility that they boost so much about, where all their brainstorming ideas come to life. Nor did he have time to accept my lunch invitation. To be fair it is a huge building and his time could be better spent than with me. Perhaps? I was impressed with all the fancy cars and their reserved parking spaces upfront, for the certain few who qualified for them.
To speed this story along, Stanley left Davison, Autumn ** took his place and now she is gone, I am left with leaving messages to legal to call me back for a refund; that close to $10,000 to make a bottle from a 3d printer is way overpriced; that the people I brought to Davison also got the same experience as me, taken badly for poorly done prototypes with expectations that they will be able to shop your invention around endlessly when in fact they don’t lift a finger without more money to them. Most likely they don’t want to make you a proper prototype because it will cost them money or they don’t know how.
They pitch make the idea of what can be done with your invention and let the person they are showing it to feel like a genius for redesigning your product and taking the credit for bringing it into fruition as you sit back and collect royalties. I want to be fair since my friends and I have lost money with no real efforts from Davison to do anything more that to take your money and rip you off. They have been sued before for something like 26 or 28 million dollars on a class action lawsuit, they have re-worded their company promises to make it look like they offer all these services for you, when in fact they are under no obligation to. Once they make you a crappy prototype they have fulfilled their services.
When in fact they still mislead you to think that they will make your invention come to life, shop it around for you and speed up the time it would happen since they have so many connections and resources in place to do this for you. Look at the small print. They mention this in their disclaimer because they have to from the class action lawsuit that settled before. I believe they still misrepresent the client by leading them on to believing they have so much more to offer than making your prototype. I want to be fair and hear your story and experience to see if I am being reasonable to bring another class action lawsuit to them and if we have enough interest to do so.”
Inventors often do not have strong business experience
Many inventors see problems and design solutions to them. It can be a gift, or it may be a way of thinking that they have developed, but most inventors do not have strong business experience and often they do not realise that selling your invention means making it attractive in a business sense because it will be a business person that you approach to purchase your idea. We have had many speakers to inform us about the way to present your invention to a business.
Below one of our speakers Lauren Rielly alerts us that inventors make the mistake of presenting an idea rather than an opportunity.
Inventor’s Syndrome – Lauren Rielly.com
“Entrepreneurship starts with an opportunity, not an idea. All too often, entrepreneurs fall passionately in love with their idea and move straight to execution, completely disregarding whether it is a potential opportunity or not. As resources are burnt, more and more commitment is applied and suddenly months or years have passed that all could have been averted with an objectivity check at the start. I refer to this very common scenario as inventors’ syndrome. Where the rose-coloured glasses distort reality and as you know, you can’t tell someone their baby is ugly. How often do you hear entrepreneurs say after pitching investors ‘They just didn’t get it!’? Yes, they did get it, the problem was that you were pitching an idea and not an opportunity.” from Laurenrielly.com – Get Started
Two important things to know about selling your invention:
- Investors have worked hard to build up their cash reserves. They are not gamblers and do not like taking chances on new ideas unless there is proper, measurable evidence that they can use to calculate the risks and the returns. A great idea only considers the returns and the risks often only eventuate as the product is developed.
- Retailers do not want to sell a better product if it only replaces an existing product. Why bother? They are making enough money now, so why should they change to an unproven product from an unproven supplier. What if it takes off and the manufacturer cannot keep up supply? What you need to show them is how your product will increase their market share by taking sales away from their competitors. To do this you need to research the marketplace thoroughly and gain as much data as you can to prove your point.
You will benefit from more of this type of advice if you become a member by joining here