Big Companies Aren’t Always the Best
Everyone wants the big sale. You know the one, the one that is going to make you mega bucks so you can retire to an island somewhere and never have another care in the world. So, to hopefully achieve that goal you want to submit your idea to the biggest company in the land. That’s great, but you may find that the big companies just aren’t as appealing as you thought. Most big companies also mean big hurdles and more levels of bureaucracy to go through and more people that have to say yes to a project.
Since they are the Big Company they also get inundated with large volumes of ideas. These ideas are from professional Inventors and amateurs. A large number of them get turned back because the company doesn’t look at unsolicited ideas, they have a particular submission protocol and you didn’t follow it, or they want you to go through a broker/agent.
That is why I strongly suggest researching the company upfront prior to contacting them to see what their policy is and if any paperwork is required from the company to allow you to submit to them. They will sometimes have it posted on their website. So check that out before you call. That saves you the long distance call and the company from being overrun with calls. And you are not wasting your first contact with them on information they will tell you to check out on their website. It doesn’t look like you know the company you want to do business with very well if you haven’t even taken time to check out their website.
I learned early in my career as a comic book writer that it was great to write for Marvel comics, D.C. Comics and Disney comics. The drawback was that I was competing against hundreds of other comic book writers for a single slot. My odds were slim at best. This also limited the amount of times I got published with them. I was constantly working on ideas for only their characters hoping for an opening. What I neglected, for a time, was to see that there were a large number of medium to small publishers producing great comics.
I started sending submissions to these medium size companies and was surprised to find that they were very open to my submissions and my acceptances went up dramatically. This was not because I am a fantastic Writer, but more due to the fact everyone else was concentrating on the big companies the same as I was. I also started making more money due to the volume of writing. Yes, Marvel and the others paid better, but it isn’t worth anything to you if they don’t use you.
This same rule applies to the inventing industry. Everyone wants a Mattel, Craftsman, or Tupperware type company to license their idea and get filthy rich. It wouldn’t hurt my feelings either. What they don’t realize is they are not alone in this pursuit. That is why a number of the large companies use toy brokers or some other organization to filter through the mass of submissions they receive. You cannot send your idea directly to them.
The down side for this is that these middle people usually charge a fee to just review your idea. Most I have seen charge about $175 to $250 on average. You may find some lower or higher. Some are now doing it for free, but ask a higher percentage on the royalty side if they get you in.
Some of these companies tell you that for another fee they will put your idea in a proper professional format for submission to the company. So, you are paying money to basically try and get in front of the company. If you get a “NO” you are out the review fee, any other money you spent and have to look elsewhere. If you get a “YES” that’s great, but don’t forget you now have to share that royalty with the broker who got you in the door. I am not against anyone making a living you just need to be sure you need certain services before you spend money on them.
Another thing to keep in mind is that some of the large companies only look at ideas passed through certain brokers they know and feel comfortable dealing with based on a long working relationship. So, if you want to try another company you may have to use a different broker, which means another review fee. Do you see how quickly your money can go out the door?
Another factor that Inventors don’t seem to consider is longevity. Let me use the toy industry as an example. If you get a toy picked up by a big company you are now one of the many toys they carry. Because they are the Big company they command a large area of shelf space in the stores. The next time you are in Wal-Mart or Toys R Us look at who commands the most shelf space. You will also see smaller companies with good quality toys trying to get a foothold on these same shelves.
Now, because they are the Big company they want a large return on their investment from your toy. If your toy is a steady medium seller say selling 500,000 units the chances of you getting dropped off the shelf is high. So, you may get a one year or two year spot on the shelf and then get pulled due to low figures.
These low sales figures that got you dumped by the Big Company would be a huge seller for a medium company. You could even be considered their flagship toy. Your lifespan with them would be years. Obviously, they would also be very open to your next toy idea. Those medium companies want to be the next Mattel and are always looking for that toy that could push them upward and command more shelf space in the stores. You want to build a relationship with the companies that actively look at outside ideas directly from Inventors.
I have contacted large companies to ask if they look at outside ideas and gotten some rather interesting responses. One company promptly told me they didn’t look at outside ideas because they had their own research and development group and if they needed new ideas they would come up with anything the company needed. She was sure any idea I could come up with they could also. That seems a little arrogant to me, but they are in charge of their company. Another large company sends out a pamphlet that gives you two choices.
(A) You want to help the company and are giving the idea completely without benefit or royalty to the company. You no longer have any claim on the idea and it is at their sole discretion what they do with it.
(B) You have patented the idea and are making the product and want this company to distribute it for you through them.
As an Inventor looking for royalties from my ideas (A) wasn’t an option. (B) wasn’t much better. If I had already paid for the patenting, and had the product produced and ready for shipping, I’m done. I would have started my own company selling them. I wouldn’t need them.
The market seems to be turning around as more and more companies are seeing a value in seeking ideas from outside Inventors. You see more Inventor Hunts and Inventor contests popping up. Be careful about joining any of these unless you have read all the rules and are okay with them. Some state that by joining the hunt you give them first shot at your idea and they can hold it for up to a year before deciding yes or no. So, you are stuck with them for that period.
Another thing that can challenge a new Inventor is the old “You can’t get experience without a job and you can’t get the job without the experience.” That is called the Catch-22 syndrome. That is another reason to look at small and medium companies. They are more willing (I AM NOT SAYING EASIER) to let you get your foot in the door.
Once your foot is in the door you still need to have a great idea before they will risk their money. With a smaller company comes a smaller budget. So, they are just as stingy with their money as you would be if you were investing in someone’s idea. They want to and need to see a return on their investment so the company can survive and grow. If you are lucky enough to get your idea picked up you now have something to show when making calls on other companies.
You will find that once you have a couple of ideas on the shelf it is helpful to have a website to display the items. You can get a website hosted for $10 a month or less. There are a number of domain name websites that have pre-made templates you can use to plug-in and edit your website. It doesn’t have to be fancy, just functional.
A website is a useful method to promote yourself and your business. You will find that if you can refer a company to your website to see inventions that made it to market you are showing them someone else took a chance on you and you produced a marketable item. No one wants to be the first to give you a chance, so you really have to sell yourself and your idea to that first company.
Another thing that seems to be trending lately is companies establishing “Wish Lists.” These are great. The company will send you a list of areas they are actively looking for ideas. A toy company may send you a letter saying they are looking for backyard toys or foam products. This does not mean they will buy anything you send them in this area. It will still have to pass reviews and make the cut. You have to also be very aware this is on spec. You are not going to get paid one cent for this work unless they want to license it from you. They are just narrowing the area you should think on before submitting.
They are doing you a big favor by doing this. You could have a great yo-yo idea, but if they are pushing towards flying toys or foam products you would miss their target and get a rejection. This prevents you wasting time thinking in the wrong direction.
So, broaden your scope and don’t just shoot for the big companies. Give them all a fair chance and good luck.