Two weeks ago we shared the results from our inventors-driven licensing survey. Today, we gain some insight from product scouts with our follow-up survey. This survey was to get the scout’s perspective and opinion on the industry. Here is a breakdown of the results.
The scouts we surveyed are reputable figures in the industry and review at least 500 products and/or ideas every year. With such a large pool of products that get reviewed, the percentage of those products that get licensed are small. Overall the average percentage was less than 1%.
The scouts represent brands, and do not get involved in the inventing process. Instead, they are looking for products that are marketable, and ready to go, not in the ‘idea stage.’ We pick their brains and discover what product scouts are looking for from inventors.
As far as the most frustrating things they see, a few of the problems include:
- Submitting ideas only.
- Lack of research of similar products in the marketplace. Not finding out if it has been invented already.
- Lack of understanding of what they have in their patent.
- Not Listening.
- Know-it-all syndrome.
Is a working prototype necessary? Our inventors revealed that they were split on the subject, but scouts do need a working prototype that portrays an accurate representation of your product design or invention. A prototype will demonstrate to you, and companies, that your idea is feasible and allows for potential investors to take you seriously.
A must-have item for inventors who want to license is a sales sheet describing the prototype with pictures, as well as a video explaining the product according to the agents.
Our scouts 100% agree that a patent or patent pending product IS necessary when trying to get licensed. Whether you want to write the patent yourself or have a professional do it, make sure it’s very, very good. “The better the patent, the better the deal,” one source told us.
Having a professional write your patent is one thing, but having a third party come in during the process is another. Our scouts do not think third parties will add any value to your product, or the process, and you should thoroughly investigate any company prior to working with them. One of the biggest challenges inventors face are scams, and before jumping in the deep end, realize you must know as much, or more, about your invention, than they do.
And everyone we surveyed ALL have relationships with product scouts, or someone similar, that helps bring them innovation directly.
“How many of the products they licensed make more than $30,000/year?” The answers varied. One response stated that all of their licensed products make more than $30k/year, while others remarked that the percentage was smaller, that closer to 1% of licensed products made more than that. We followed up that question and asked “of those products that do make money, what is the average amount made per year?” Everyone surveyed remarked that there isn’t a standard and the range was diverse.
There are circumstances when royalties are paid upfront, but it’s very rare for licensees to buy inventions outright before they go to market. One scout noted that advances are typically small.
A question we often receive from inventor’s is “how long does it take to get a product to market after it’s reviewed and/or licensed?” It’s different for each case, but the average answer was one year. It can take longer, or if you go the DRTV (Direct Response Television) route, the time is shorter.
Anyone can have a big idea, you just have to find a home for it. Be sure to get all your ducks in a row — do your research, develop your idea and ask yourself questions throughout your creation process. Explore submission guidelines, don’t be hasty and before signing anything, decide your own criteria for your licensed property. The more you invest in doing things right, the better your chances will be.