Many of our inventors say their dream is to get their product on store shelves. That makes sense – who doesn’t want to see their idea selling in a store while they line their pockets with royalty payments? But, what most people don’t know is it’s not quite that easy. One of the ways to get your product on shelves is to find a company to license it and add it to their product line. But, what are companies looking for in a new invention? Surely there’s some kind of magical formula, right? Well, not so much. There’s no magic wand when it comes to licensing, but there are a few characteristics that companies typically look for when seeking out new products to add to their line.
Unique OR Significant Improvement
A new product must offer one of two things – it could be a new concept or it could be a significant improvement on an existing concept. Both of these are equally good. Either way, it must provide something that is not currently provided. If an idea is the exact same as something that has been seen on the market previously, it is not enticing to a company. Create something new or improve something old!
Relevance to their Target Audience
Most companies have a specific target demographic of people who buy their products. Take, for example, athletic/yoga brand Lululemon. Lululemon sells pricey athletic clothes and exercise accessories, both most commonly for yoga. So, their target audience is mostly middle to upper class women who enjoy being fashionable and doing yoga. Lululemon is probably not going to carry the latest innovation in car repair. Although some of their customers may enjoy repairing their cars, Lululemon knows that the majority of their customers take their cars to the shop – and who would think to buy a car repair item at Lululemon, anyway? Companies carry items that their target audience would use and try to build a lifestyle and brand around that.
Fits into their Product Offerings
You might think this is similar to the “relevant to target audience” topic above, and if you do, you’d be correct. But, there’s a slight difference. Let’s go back to the Lululemon example. A woman who shops at Lululemon may ALSO enjoy cooking, crafting, reading, building her own bicycle, hunting, or any number of pastimes. People like different things. Even if executives at Lululemon discover that much of their demographic likes baking, they are not going to carry the latest iteration of a standing mixer. Sure, in theory, women who shop at Lululemon may buy an innovative standing mixer. However, they’re probably not going to buy it from Lululemon – they trust other brands to sell those types of goods. So, not only does a company’s product need to be relevant to their target audience, it also needs to jibe with the other products they offer to fit in with their company branding.
Staying Power – Or Trendiness!
For a company to add a new product to their line, it typically has to be likely that the product will bring them revenue for years to come. They want something that will consistently sell well. However, it is also possible that a company may add a trendy product to their line because it will bring them in a lot of money over a short period of time. This depends on the company’s brand reputation – whether they prefer a product to be classic and consistent or trendy and exciting. Some companies will carry both kinds of products. Either way, a company will take in consideration how much money a product will bring in over a period of time.
High Profit Per Unit
For a product to make a company a profit, there needs to be a significant difference in the amount that the product costs to be produced and the amount that it can sell for. If a product is made out of premium materials – higher end plastics and metals, for example – it should sell at a premium price. If a product is cheap and easy to produce, it’s okay for it to sell at a lower price because there will still be a significant profit margin. However, companies do not benefit as much from a product that costs a lot to make but doesn’t bring in much revenue. This pricey product is a dud in their eyes, no matter how cool it is or how well it fits in with their brand.
Solves a Problem
For a product to be considered relevant for a period of time, it must solve a prevalent problem. A company’s target audience must also be experiencing this problem. If a product can manage to solve a problem and remain relevant through changes in innovation, it is a product that is sure to stick around for a while.
Companies look for many things when they are considering adding a product to their line, whether they are developing their own products through in-house research and development teams or accepting outside ideas from inventors and licensing the product. If a company is interested in your idea, keeping in mind this is a difficult thing to do, InventHelp has the knowledge and experience to negotiate a licensing deal. If you think companies would be interested in your idea, contact InventHelp today.
Categorized in: InventHelp