New products are being replaced by newer products at an increasing pace. This means that each new product sells for a shorter time that products previously sold. This greatly impacts how much money inventors are making. How do you know if your product will stand the test of time? Will your product sell long enough to make back your investment or will it keep on selling so you can actually make money? How much does your product's longevity depend on your marketing and how much depends on your product? Of course, some products only can succeed for a short amount of time, but with a well thought-out marketing plan, you can extend the life of almost any product. Let's look at Shrinky Dinks, a product invented in 1973 by Betty Morris.
Betty Morris was looking through a craft magazine and found a craft that she wanted to try with her son's Cub Scouts group. The Scouts liked the craft so much, that Morris thought she could turn the craft into a product and sell it - and she created Shrinky Dinks. Shrinky Dinks are thin, flexible plastic sheets that can be colored with different art products, cut into any shape, and then are heated in the oven to shrink them into a thicker and rigid colored design.
Morris started selling the products for $2 a kit and after finding a partner that would distribute the product, she started selling to stores around the Milwaukee area. But soon the distributor started having problems and Morris decided to sign an exclusive licensing deal with Colorforms. When the product really took off, Milton Bradley bought the exclusive rights from Colorforms.
Later, in the 1990s, Milton Bradley bought out Parker Bros. and started focusing on games, which meant they stopped producing Shrinky Dinks, leaving Morris with no income. After trying again to set up another exclusive licensing deal that didn't work out, Morris decided she needed to try something new.
Morris decided to start licensing the technology to as many toy companies as she could and instead of making money on the licensing, she would make money on selling plastic. As a part of her licensing agreement, she requires the licensors to buy the necessary plastic from her.
This new business model has taken off and still brings in more than $1 million in annual sales.
Morris obviously has a product that still has appeal even after 35 years, but at every step she has needed to carve out a business that would have otherwise failed. Very few products can last 35 years, and fewer still can sell for 35 years without changing business models. If you want to extend the life of your products you may need to continually rethink how you can make money off of your product. Like Morris, you may end up making more money if you don't actually make money off of the sale of your product. Sometimes selling materials, services, refills or parts can bring in a handsome income and when sales drop off, this might be the only way to continue to make money with your product.
Morris followed a common path to market - she established the product locally, proving it could sell, then when she couldn't make the jump herself to sell nationally, she licensed it to a company that could and she received royalties for a long time from that. But when she started having problems, she needed to think creatively.
Today products' longevity is shorter than ever, but you can turn a few months of sales into years of profits. Let's look at a few examples of how.
Morris's example provides us two ways of extending the life of a product. The first is licensing. Sometimes inventors can't bring their product to the national stage in a big way that will create sales for years. This can be due to a lack of funding, marketing expertise, or a hundred other reasons, but many of these obstacles can be overcome with a company that has a marketing staff and money to invest. If you just can't get your product out of your local area, licensing can get you going in a bigger way.
The other example Morris provides us with is selling something other than your product. Selling materials is only one of many ways to make money with your product without actually making money off of the sale of your product. Here is another example: you create a great new industrial cleaning machine that can be used by certain manufacturers. Let's say you sell to about 50% of these manufacturers and you just can't get the other 50% to buy. Is that it? Should you close up shop? What if instead of selling your product, you could create a cleaning service that uses your machine in cases where it isn't worth it to invest in your product, but your product still does the best job cleaning up. If you set up 100 clients that need one cleaning every three months, you will be providing 400 cleaning jobs a year for years to come. If you do the service yourself and make a profit of $200 per cleaning, you will bring in an $80,000 a year income. Not bad.
Other inventors succeed by creating a disposable part of their product. A disposable part is something that lasts for a certain amount of time and then people need to reorder. This is how printer companies make money. Sometimes they even give away printers and then they make all of their money when you have to order ink from them.
Another option is turning your product into a promotional product. Let's say you sell your invention for a year or two and sales start slowing down. You may be able to get businesses to buy your product with their logo printed on it to give away to clients or potential clients. You can't have a really high cost item for this, but many lower cost items can be great. You just want to find a relevant company for your product. For instance, if you have a hair styling product, companies like Great Clips might be interested in giving your product away as a promotion.
As you can see, there are many other ways to make money from your product than just selling it to consumers. If your sales are starting to drop off, try another tactic and see if you can increase the life of your product.