This is a frequent question asked by inventors and creative people.
And, like anything else in life, to succeed at licensing requires practice, patience, and determination.
I believe that most creative people come up with product ideas because that's just the way their mind works - you create instinctively - you can't really even help it - your brain just works that way! People like you will create whether they are getting paid for their ideas or not.
I know that one of the reasons I created products was the desire for acceptance from others.
But, I also realize that most people would like to profit from their creativity - and some of you hope for the "Big Money" in the game.
It can happen. I’ve seen students license hundreds of ideas. But I can also tell you that usually the "money" part of it was not their main goal or motivating factor. What is then?
Inventing products that help people, put a smile on a face, or change the world is something almost every inventor is passionate about. That's the payoff - the intrinsic reward of something positive that your product puts forth.
To increase your chances of success here is my formula.
1. Create a lot of ideas, not just one.
The most likely way to generate revenue from licensing is to have a lot of ideas not just one. The next steps will help you to do this.
2. Know the market. Become an expert in a micro category.
Look at all the companies that are producing products in the category in which you create (hardware, housewares, etc.) Know their points of difference from your product(s). Study their product lines. Know their products inside and out including details like the material from which they are made. Know the wholesale price, the retail price, and what retailers and consumers are saying about those products. This takes practice and time. You will need to do a lot of research utilizing the internet, trade journals, retail stores and maybe even trade shows.
And if you’re going to create in the toy industry this process will take even longer because of the massive amount of creativity we have seen over the years in that category. (That’s one reason why I left the toy industry- for me it took too much time and there was too much history to come up with truly new and unique ideas.)
3. Build a relationship with the companies in your industry that are inventor friendly.
Start slow, introduce yourself, and submit product ideas to them utilizing whatever requirements the company has for that process. It's likely you will face rejection at first. Don't give up. Keep submitting product ideas. Try to develop a relationship with a person inside the company and ask them why your products are getting rejected. Ask them what the company is looking for - when they realize you are not going away they may begin to see you as a great asset. After all you are developing products for their company and they don't have to pay you (yet).
If and when you license an idea - that’s when you get paid.
Visiting a trade show may allow you to meet your contact in person - strengthening the relationship and giving you an opportunity to better understand the category, the company, and their needs.
4. Get to know the retail environment.
Visit the stores that carry products in your category. Visit as many as you can - get to know the retail environment, how the products are packaged, displayed, and merchandised. What do these products look like on store shelves? Which ones have eye-catching packaging? Who has benefit statements on their packaging? Ask retail managers what is selling and what products they wish they had to sell that they don't. The retail environment is Ground Zero to understand the category - it simply is a must that you understand how products are sold.
Having said these tips - here's one more piece of advice. Don't quit your day job just yet! Have the discipline to work on your product ideas every day doing one of the things I have described. Stay in one industry - don't jump around! Exhaust all possibilities when you’re coming up with new ideas. What I have suggested takes time not money - just keep at it.
You may or may not ever make your living from licensing, most people don't. Creating new ideas from scratch is truly magical. And it’s that magical feeling that keeps people going. The money you make is the "icing on the cake".