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Anyone familiar with my articles or the work we do at Inventor Angels knows that our core message to inventors is to conserve resources as much as possible. Simply put, work smart and don’t waste your money. In my last article on going “all in,” I discussed the perils of getting ahead of yourself and investing too much, too soon. Small, well-placed steps are always the better move and they allow you to go forward with control over your venture without ending up a victim of it.
There are many ways to reduce costs and at the same time increase overall chances of success. One of the best things you can do to help ensure successful results is to work backwards. Yes, backwards. You see, most inventors go boldly forward through the development process propelled by a single-minded vision of their finished product. They know what they want it to be and will do whatever it takes to make it that way. When completed, they may very well have a perfect embodiment of their idea - but were they truly successful? Maybe not.
A number of factors govern the successful introduction of a new retail product – market need, appeal, effectiveness, etc. Most of all however, the numbers need to work. Your product can be everything it's meant to be and do everything it’s supposed to do, but if in the end it costs too much, it won’t get very far.
Many inventors fall victim to poor cost viability simply because their sights are only set on completing their product. As such, they miss or ignore the all-important first step of deciding what market-ready parameters it will need to satisfy. Before starting any development work, it is vital to identify successful criteria first and then work backwards from there. Begin by looking at the market and see what comparable products in the category are selling for. That’s your target price range. Does your product have a unique feature that can justify a higher retail price? If so, factor that in, but be conservative. Maybe your product is something that offers similar benefits to others but in a more economical way. If so, plan on offering a lower retail price. When you finally have your target retail price figured out, divide that number by five. Now you have the manufacturing cost your product will need to meet. All your development activities should be geared towards arriving at or below that mark.
We recently helped an inventor develop a new pet product and like most, he had a vision of how it should be constructed and function. Having evaluated the market first however, we realized that the target retail price for such an item was low which meant compromises to his design. When we faced functional difficulties, most of the solutions considered would have added to the final cost, so we ruled them out as options. It can be frustrating and there are times you may need to decide if the product is viable at all. Sure, you can make it work, but if the resulting product simply costs too much, it can ultimately be just a waste of time. We stuck to our guns and eventually came up with a design that met all the criteria, including cost.
Not long after, we presented it to one of the leading manufacturers in the category. After reviewing, the head of product development replied, “great item, but it will all come down to the numbers.” Since we knew that before we even began and planned accordingly, we were exactly where we needed to be. Just imagine getting that far, only to be denied by a poor manufacturing cost. The last thing you want is to spend time and resources on development, only to realize you need to go back and start over with changes.
Cost is by far the biggest factor, but there are often other issues that need to be considered as well. Do your research, look closely at other products in the category and make a list of essential criteria. Once you have the ideal version of your product that is best positioned for market success, go back to the beginning and get started!
Glen Eckert, Inventor Angels