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An Introduction to
New Concept Licensing
What Makes a New Idea Marketable?

Have you ever wondered where the idea for a new product comes from? In some cases, an individual designs a product and brings it to the market themselves. They might invest thousands of dollars or more on research and development, packaging, etc., but buyers and retailers are reluctant to place orders and commit their valuable shelf space to a new company.

In other cases, the developer of a new concept will attempt to interest a manufacturer in marketing their product in order to save themselves the effort and expense of producing it independently. However, most major manufacturers will accept submissions only from reputable agents, not individuals, and the smaller companies that will accept submissions from independent inventors usually don't have the resources to properly promote a new concept.

Most inventors, however, will bring their new concept to a licensing agency, who will present their idea to manufacturers and negotiate a license agreement on their behalf. Obviously, choosing the right agency is one of the most important decisions an inventor has to make.

What is Licensing? A license is an agreement between an inventor (or their agent) and a manufacturer that grants the right to make and sell an invention in exchange for payment (called royalties). The license agreement details the terms of the license, such as advance payments (how much the manufacturer will pay up-front for the license), royalty rate (the percentage of the manufacturer's selling price that the inventor receives), and the report schedule (how frequently the manufacturer will send an accounting of all pieces sold, along with a royalty check).

What is an Invention? For the purposes of licensing, an invention is any new concept that is commercially marketable. This might be an all-new concept (the telephone, for example), a combination of two or more concepts merged together in a unique way (the telephone/answering machine) or an improvement on an existing concept (the push-button telephone).

What makes an Invention Marketable? This, of course, is the most difficult question of all. First, it must be determined what group of consumers your invention is intended for. Is it a unique woodworking tool aimed primarily at hobbyists? Or perhaps it's an idea for a new toy or game, appealing to children and families. Next, the competition, or state of the art, must be examined. Is there anything substantially similar already available on the market? Is there a place in the market for another product in that category?

Finally, consumer demand for the concept needs to be evaluated. Is there a need or desire for this type of product? How much would the prospective consumer be willing to pay?

Even given a full understanding of all these elements, it's nearly impossible to predict which products will be blockbuster hits, which will sell moderately and which won't sell at all. It costs a manufacturer a great deal of money to introduce a new product. There are cost and marketing studies, tool and packaging production, promotion expenses like TV and print advertising, and the production of inventory. Regardless of how good the economic conditions are, no manufacturer takes the plunge with a new product unless they feel sure they will see a sizable return on their investment. That's why they rely on the presentations and recommendations of Anjar Co.

All of the major manufacturers know about Anjar's thirty-year commitment to bringing new and innovative product concepts to the market. That's why thousands of inventors are referred to Anjar each year by our licensees throughout the world. They know that we'll carefully analyze each submission we receive to find the ones that are just right for them. They know that we've done all of the necessary preliminary work and our presentation will be smooth, thorough and professional. And they know when it comes time to hammer out the finer points of a license, we're tough but we're fair.


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