If you think your idea is immune to market constraints, think again. The fact is, most patents fail to turn a profit — and it will happen to yours too if you don’t look into whether or not it is fiscally viable. So somewhere between scribbling your ideas down in your notebook and successfully launching a profitable business, it’s important to actually pinpoint whether or not enough people are willing to buy your product.
Fortunately, you’re not alone in this effort. There are a litany of research tools primed for your market-research arsenal. Listed below are some of the best in the business, hand-picked to help you better understand your idea’s market potential:
1. Do Your Homework
Your “ah-ha” moment may have been a crowd-pleaser on the onset — but how many of your supporters would actually buy your product? Before investing lots of personal capital into your invention, take a truthful look at how differentiated your invention is from other products that exist in the marketplace today. This is helpful for two reasons: One, it will likely help you obtain patent protection more easily down the road, and two, it will probably give you a clear picture of potential buyers.
If you’ve decided to conduct market research, there’s a few things you should know. First, the simplest way to do it is through searching your product’s keywords on Google. You should see products pop up that are pretty similar to your own. Pay careful attention to whether or not your idea is similar, but not identical, to existing products, as there may still be room in the marketplace for your innovation.
For a more in-depth dive into your idea’s market, try searching for your idea in public record databases such as the U.S. Patent and Trademark Office, the European Patent Office and through Google Patent Search, which are all free. You can also use Edison Nation Medical’s inventor resource library for even more useful patent search tools.
Second, rely on actual people — as in, talk to your target consumers. Start by asking them what sorts of products or improvised solutions they currently use to solve their problems related to your idea. This not only reinforces your novel idea, but it can inform some of your marketing efforts later on.
2. Be Analytical
Would-be-inventors, often times, are so enamored with their ideas that they are not able to see its actual worth or market potential. Don’t be like this. Instead, ask yourself difficult questions, while trying to detach your emotions from the answers. Doing so will ultimately save you time, money and heartache down the road. Answer the following questions truthfully after you’ve conducted your market and patent research:
- Is there a market for this product?
- What is the size of my market?
- Will people actually buy it?
- How much will my idea cost to produce and market?
- Do I want to start my own business or sell my idea?
3. Make Money
If you’ve made it through the research and analysis phases and still believe your product has the market for a business, it’s probably time to start thinking about the ways in which you can actually turn a profit. While it’s not simple, there are some core opportunities from which you will likely need to choose — so if none of these sound particularly good to you, it may be time to pursue an alternate path from your invention-entrepreneurship.
Generally speaking, you have the following options: sell your patent, license usage rights or market the product yourself. Each of these options have distinct pros and cons primarily around the risk/reward profile one desires to undertake. Ultimately, it’s important to carefully assess your overall vision for your product and your personal risk appetite.
- Sell your patent: Thousands of inventions are patented every year, but only a select few actually turn a profit. Choosing to sell your patent, however, results in a quick and definite payoff. So if your product is a slam dunk, you may have signed your rights over for a nominal amount while the new patent owner could eventually make significantly more in profits.
- Licensing your usage rights: When an inventor chooses to license their invention, they are assigning ownership of their idea to another party in exchange for earning royalty payments, which normally a percentage of the product price. In this scenario, a licensee will agree to annual volume minimums, geographic exclusivity, and a set royalty percentage. The risk, however, is in the case of an unsuccessful product after you make a large upfront payment.
- Market your own product: Opting to sell your product yourself means that all profits go straight into your pockets. But the downsides may outweigh the one, big benefit. Any money you make will most likely get eaten up by overhead costs, such as legal and accounting fees, business start-up costs and the actual cost of producing, marketing, and selling the product.
If you believe your idea has the potential to be great, assessing your product’s market potential is the logical next step. While it’s completely normal to feel intimidated by business strategy and intellectual property, the more an inventor understands, the less his or her money and time is wasted on an idea that has little chance of building a profitable business.