How I got into Inventing
In late 2008, I was out of work for the second time in 18 months. This time it took me longer to find another job than my previous layoff. Between interviews and job searching I had some free-time to hang out at the local Barnes and Noble book store. Being out of work and not wanting to spend money to actually buy the book, I would read a chapter of "The Four Hour Work Week" by Tim Ferriss every time I visited the store.
That is where I learned that I could escape the 9-5 and generate passive income through inventing. I already had six patents but pre-employment agreements meant that the patents belonged to my previous employer. I've listed four ways for you to make money with your ideas by becoming an inventor.
You could enter and inventor contest but I strongly discourage it. It's like trying to win the inventing lottery. If you really have a good idea you need to make it happen. Rarely will someone do it for you. Edison Nation offers "Product Searches" but you can often times submit your ideas directly to the company and bypass the contest.
You've heard of outsourcing. Companies ship jobs off to areas with lower costs of production. Have you heard of crowdsourcing? Wikipedia is a great example of crowdsourcing. The public contributes, usually for free, to create something bigger and better that a single person or single company could do on their own. Quirky.com is a Social Product Development website site launched in 2009 and it's going strong with over five products currently shipping and over 40 products in development.
Manufacture and sell on eBay or Amazon
Depending on how deep your pockets are and your tolerance for risk, you can get into venturing. Design, manufacture, promote, and ship your product. Each of these steps can be outsourced for a fee. The most challenging part is the promotion part. Google AdSense pay per click advertising is a cost effective way to get the word out.
Amazon.com offers a service called "Fulfillment by Amazon". After you get established and have regular orders coming in because the PPC ad campaign is humming along, you can let Amazon process your orders. Just ship them the inventory. They take the orders, process the payment, and ship the product. You sit back, collect a check minus a nominal fee, and keep on inventing. Remember, there is no such thing as a free lunch.
License your invention
What was earth shattering for me to learn was that I did not need lots of money to manufacture my product and try to sell it on my own. I could license my ideas to companies in exchange for a royalty payment. The company you license your invention to takes the risk and shells out the money to develop the product. I finally had a vision for my future with a plan to take control and invent my way out of the rat race.
This is where you rent your idea to an established company and get a royalty 1-10% of the wholesale price of the product. This is what I do and I highly recommend it.
Benefits of Licensing
- It's more efficient to license out new products rather than take up production yourself. The company does the heavy lifting of tooling, production, sales, marketing and distribution.
- It gives access to new markets that are otherwise inaccessible. By granting the licensee the right to market and distribute the product, the licensor can penetrate markets it could not otherwise ever enter.
- A license agreement can give a way for the licensor to gain rights in improvements, know-how and related products that will be developed by the licensee during the term of the contract.
- A competitor can be turned into a partner by settling a patent dispute out of court and agreeing to enter into a license agreement.
- It's passive income! Once you do the work, you can go on to the next invention idea.
It's up to you to take charge and take control of your destiny. All you need is a good idea and a little money and you can be an inventor.