January 2010
Although each independent innovator's path to market success is unique, successful innovators tend to share 2 complementary traits - the ability to act on incomplete or inconsistent information, and resilience. We help manage risks to our market success by learning from other innovators and participants in the innovative process, by networking at trade shows with representatives who can open doors for us, and by thinking carefully. But we can never eliminate risk. For example, the timing of getting a new product to market is important to market success. The market's rule often is "first come, first served." In order to synchronize our innovative efforts with market demand, sometimes we must act before we have a perfect plan, before we have all the answers. So we sometimes hit unexpected bumps in our path. When that happens, resilience (keeping our eyes on the prize) helps us to learn from our mistakes, to recover, and to continue on our path.
Mr. Robert Dunlap (founder of The Cement Solution LLC; inventor of a reusable bag for mixing concrete; holder of the world record for fastest cement mixing) exemplifies those 2 traits. Based on what he learned while traveling his bumpy path, he recommended 5 ways to help us manage our product distribution risks.
1. Trust, but verify.
If a distributor places a large order with you, dig for the details. Know what you are getting into. Is the order subject to any unstated conditions, such as a particular kind of packaging or a variable price?
2. Get it in writing.
Conversations are a necessary and helpful part of negotiating a deal, but an agreement is not usually final until all parties sign a written, binding contract. So don't spend any money on manufacturing an ordered product until you receive a signed purchase order from the distributor.
3. Show me the money.
What net income does your distributor guarantee to you? Are there any unstated conditions on receiving that income? For example, a distributor may intend to pay you only after it recovers all of its distribution costs.
4. Don't get in a hurry.
Business deals can take time to negotiate, especially if the company you are dealing with is undergoing internal changes. Developing a strong distribution network for your product might easily take 6 years.
5. If it sounds too good to be true, it probably is. Don't forget that you are the little guy.
Mr. Dunlap also recommended investing in a good patentability search before starting work on any nonprovisional patent application. It's usually better to spend $2-3,000 on a search and find out that some other genius already thought of your invention than to find out the same thing by spending up to $20,000 on a denied patent application.
Thank you for sharing your hard-won knowledge with us, Mr. Dunlap. Good luck with your product distribution!
Mr. Robert Dunlap (founder of The Cement Solution LLC; inventor of a reusable bag for mixing concrete; holder of the world record for fastest cement mixing) exemplifies those 2 traits. Based on what he learned while traveling his bumpy path, he recommended 5 ways to help us manage our product distribution risks.
1. Trust, but verify.
If a distributor places a large order with you, dig for the details. Know what you are getting into. Is the order subject to any unstated conditions, such as a particular kind of packaging or a variable price?
2. Get it in writing.
Conversations are a necessary and helpful part of negotiating a deal, but an agreement is not usually final until all parties sign a written, binding contract. So don't spend any money on manufacturing an ordered product until you receive a signed purchase order from the distributor.
3. Show me the money.
What net income does your distributor guarantee to you? Are there any unstated conditions on receiving that income? For example, a distributor may intend to pay you only after it recovers all of its distribution costs.
4. Don't get in a hurry.
Business deals can take time to negotiate, especially if the company you are dealing with is undergoing internal changes. Developing a strong distribution network for your product might easily take 6 years.
5. If it sounds too good to be true, it probably is. Don't forget that you are the little guy.
Mr. Dunlap also recommended investing in a good patentability search before starting work on any nonprovisional patent application. It's usually better to spend $2-3,000 on a search and find out that some other genius already thought of your invention than to find out the same thing by spending up to $20,000 on a denied patent application.
Thank you for sharing your hard-won knowledge with us, Mr. Dunlap. Good luck with your product distribution!