Understand what the retail value of the product should be. A lot of people come up with a great idea but they never know how much to charge. To determine the perfect price point to sell your product, first calculate how much your product will cost to make. Think about the big picture. You not only have to look at how much the product materials cost, but also the labor costs, or the price a person or a manufacturer will charge you to make it, in addition to wholesale and distribution costs. Try to use less expensive materials, and look at volume. The cost per individual product will go down if you purchase materials in larger volume. “All of that will go into the pricing structure,” says Jackson. Next, look for similar products on the market and see what their prices are. Make sure your prices are competitive (i.e. they will provide more value for your customer). But make sure you are able to still earn a profit.
Don’t disclose your idea to manufacturers. “One of the challenges you may have when coming up with a prototype is disclosing what you are doing with the components that you are requesting,” says Jackson. “Look for multiple manufacturers to make your one prototype, but never really tell them what the parts are for to keep your ideas from being stolen.” Jackson got separate components from three to four different companies to make his prototype. You can also hire a manufacturer to make your prototype, but only after they sign a nondisclosure agreement.
Use the materials that the manufacturer already has in place. If your patent is comprised of multiple parts and pieces, use parts that are already in existence unless it is absolutely necessary that your idea has to use specific types of plastic or metals, which need to be manufactured anew. “You don’t want to reinvent the wheel,” says Jackson. “If you can take components that are already being made by a particular manufacturer that will save you production time, costs, and labor.”
Visit the Inventors Insider next week for more information on how to be successful at creating and monetizing your ideas.
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