By Elaine Zimmermann
Tabatha: I have a product idea I would like to market to consumers. I don't think I can come up with the money necessary to manufacture it. Do you have any ideas on how I can still make money from it?
Elaine: You do not have to manufacturer a product to make money on it. Manufacturers want new products ideas and will "license" your product, then pay you.
Many celebrities have their names "attached" to products which they do not manufacture. You see celebrities "branding" everything from towels to twin beds. In some cases, the celebrities control the manufacturing. In other cases, the celebrities merely allow their names and images to be used with the merchandising of a product line.
One of the most famous examples of licensing an idea belongs to Charles Darrow. Deep in the depths of the depression an out-of-work plumber took his idea for a board game about how the wealthy get wealthier and the poor "go to jail". You guessed it. He invented the "Monopoly" game.
The licensing fees from this one idea have kept his entire family living on "Boardwalk" and "Park Place" for decades.
Let's use the Monopoly board game to explain what you need to know about product licensing.
First do your best determine if you have any competition for your product. The Internet is an invaluable search tool. Type in the description of your product. For "Monopoly" you might try "board game obtaining property, real estate"
You might also see if the name you have for your product is already in use. Using the game as an example, go to networksolutions.com and do a search for the domain names "monopoly.com" or "monopolygame.com". Not only will you see if your idea is already in use, but by going to those domains that are already registered, you may see some of your competitors' products.
Once you are satisfied that your idea is unique, seek out a manufacturer who might be interested in licensing it. You will have to identify manufacturers of items similar or in the same category as your product idea.
What do you take to them? A prototype of the product and a strong descriptive product name are recommended.
The name "Monopoly" is memorable and very descriptive of the game. Try to keep your product name short and memorable. One or two words is best.
I am sure you are wondering if a company will try and steal your idea. Do I need a patent before I speak to a manufacturer? Not usually. Sometimes the best way to protect your idea is to protect it with copyrights and trademarks. Using the Monopoly game again, you cannot patent the action of the game, throwing dice and moving pieces around a board. But the name and the "look" of the game can be copyrighted and trademarked.
Manufacturers routinely pay a licensee about 5 percent of the wholesale costs. It sounds small, but it could be your "Park Place."
Elaine Zimmermann is a personal finance expert who was written about everyday ways to save money on cars, homes, vacations and more. For information on investing in foreclosed real estate you can visit her website at www.AskElaineZ.com.