Licensing vs manufacturing

That is not to say that serious and real life issues of control and ownership do not show up. They do. The reason why the manufacturing route yields a higher return is often because those in those shoes recognize a high failure rate of product introduction and properly negotiate a higher return for their taking on the risks that they do.

Sometimes — as I indicate to Benny — the highly technically skilled inventor who merely thinks that he can do it all because he read a management book or a legal book , is the most difficult person to guide, is the person who has some of the most unrealistic expectations.

Your continued efforts to shape those expectations are very much appreciated Gene. Keep up the good work. Our website uses cookies to provide you with a better experience. Read our privacy policy for more information. Accept and Close. Gene Quinn 7 years ago. Join the Discussion 2 comments so far. Anon August 17, am Good point Benny — I would extend that to the management arena as well — especially when management has arisen from the technical ranks or in some very small firms, the management hat is merely another hat the technical person wears.

View Comments. Add Comment. Varsity Sponsors. Latest IPW Posts. Junior Varsity Sponsors. IPWatchdog Events. However, large volume can make up for the lower percentage per unit you receive. Manufacturers are not always distributors. If you license your product to a manufacturer that also distributes products, your licensing agreement should pay you even if the manufacturer can't sell the product. However, if you have a separate distributor from the manufacturer, you can use the distribution agreement to entice the manufacturer, which will see a ready market for the product.

You can limit the amount of time a manufacturer has to make your product. At a date in the future, you can regain full rights to your product, which will allow you to find a new manufacturer or to alter the product into a follow-up product.

Licensing vs. Along these lines, starting an inventory of your product is very costly on your own. Some inventors will seek investors to help them cover the beginning costs of the manufacturing process.

This practice helps the inventor maintain creative control while gaining some help with expenses. Inventors who decide to handle manufacturing on their own will usually need to start a business of some sort. Corporations are a good choice because they allow for many investors, but they take time and money to start. You can see how this manufacturing process can quickly get very complicated and time-consuming.

Maintaining control of their product is worth the effort to many inventors, but others will choose the route that is usually easier by going with licensing. Basically, manufacturing offers a higher potential for reward but brings higher risk along the way.

Licensing is a lower risk with a typically lower cash potential. If you need help with understanding licensing versus manufacturing, you can post your legal need on UpCounsel's marketplace. Manufacturing it yourself and licensing each has its rewards and pitfalls. Regardless the route you take, be as informed as possible, set realistic expectations and minimize your risks. But in the end, the consumer will be the final judge.

Welcome to the Machine is a regular section spotlighting trends and offering timely advice on two of the most crucial aspects of product development — licensing and manufacturing. Inventors Digest is the longest running magazine dedicated to the individual inventor.

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Licensing vs.