Making money inventing can be puzzling.
The difficulty for many inventors is not knowing the process and strategies involved in bringing a new invention to market.
It can be like putting together a complicated puzzle without the picture on the box. There are so many pieces and we are never sure if we are doing it right.
Inventing a new product is a creative process. It is challenging and time consuming. It takes skill, ingenuity, patience, persistence and a lot of testing.
Yet despite these capabilities, most of us seem to spin our wheels when trying to get our hard won creations on the market.
The reason for this has to do with understanding how inventions are developed, manufactured and marketed for profit.
This process has a big influence on how we design our inventions. Many good inventions are not marketed because they do not fit the criteria for generating profits - or they can potentially interfere with products that already generate large profits.
Making money inventing is about making money selling your product.
In business, a new invention is conceived in one department - research and development.
A business will co-ordinate many departments within their company to evaluate the potential profitability of a new product. It is what they are in business to do - make profits.
Each department has a specific function and purpose. A product will flow through each department for evaluation.
At each stage they will want the answers to questions. Can we make enough profit from this invention to justify developing it? Will anyone buy it and how can we prove that? What is the life-cycle? How long can we make money on this? Is it scalable to new versions?
Prototypes will be created and demonstrated to see if anyone would be interested in buying the product.
Manufacturing will evaluate material and production costs, quality control and packaging. Marketing will evaluate sales potential, projections, advertising, promotion and retailing.
Legal will evaluate contractual obligations, liabilities and government regulations. Distribution will evaluate shipping/receiving, warehousing and related logistics.
Finance will review all costs and profit margins, return on investment and so on.
Making the "Cut"
In large companies you can have hundreds of people working in many departments evaluating dozens of products on a regular basis. Those that look the most profitable (not necessarily the best) will make the "cut" and get on the market.
Most profitable means profitable for everyone involved in commercializing the product - wholesalers, retailers, etc. Everyone involved has to make a profit.
Making money inventing, regardless of whether you try to license your new invention or market it yourself - requires an understanding of the various steps involved in making your invention profitable.
If people cannot readily see the profit potential - it will be more difficult for you to successfully market your product.
Making money inventing is directly related to establishing the profitability of your new invention.
"Do your homework, then take a big bite," William Lear, inventor of the car radio and the Learjet.