You’ve developed the idea, put time into the patent application and construction plans, now the real question is; What is this idea going to be worth to other people? You probably gave this at least a brief thought when you developed the idea to make sure it would be worth the cost to produce. However, a more detailed analysis of the invention’s value will be needed before developing a marketing plan.
How Do You Determine Your Invention’s Value?
There are many factors that must be considered when arriving at a figure. Starting basic, you should consider what you would pay for the idea if you were buying it from someone else. Obviously, you decided that the idea was marketable, or you wouldn’t have made it this far. Next, consider what you would pay for it at the store if you needed, or wanted, it. This figure will help you determine the ultimate value of the product. There are professional patenting agencies that can help you out like InventHelp and you can check their page on Facebook – https://www.facebook.com/inventhelp/ to learn more.
What Market are You Shooting For?
If your invention is designed for the general public the price will be lower in order to reach the largest number of people. If the product, or idea, is aimed at businesses you may determine the value, and subsequent price, can be set higher. The market will have a large influence on the price you set for your product.
When doing market research you will also be able to determine if there are other, similar, products available. If there are similar products available this will help in determining the value of your invention. You will not be able to charge a lot more for your product or idea without justifying the additional cost in some way.
Simply approaching a problem from a different angle may not be enough to justify an increased price tag. Offering a more efficient solution, or easier approach, to a problem might be enough to increase the value of your idea.
Another variable in the value of the invention is whether you are planning, and able, to produce the product yourself. The value of the product becomes a combination of the cost of the raw materials, in combination with each other, and the value that the final product holds for the intended audience.
For example, if a product uses gold as one of its raw materials, and the product is not available in any other form, the value of the invention will be higher. Conversely, if your invention is just a variation of currently available products, meant to be produced less expensively, and with added convenience, the price set for it may be lower.
Many Inventors Choose Not to Produce Their Own Products
This may be due to a lack of facilities, raw materials, or desire to produce the product. Some inventors specialize in developing ideas and then selling these ideas to companies who will produce the products under their own name. Determining the value of the idea then becomes essential in setting a price. Again, the target market, and its size, must be determined to estimate the number of units that could be sold.
The final sale price of the product, minus the production cost and marketing costs, will equal the profit that can be realized from the invention. A business will not pay more for an idea than they can turn around for a profit. This means the value of the product will be based on the potential profit that can be realized by the sale of the product in the target market.
Lastly, when determining value of an idea, many inventors will do their own market survey. They will approach people in their target market and ask them questions to determine their likelihood to purchase the proposed product and what price they would pay. This research will give a real world estimate of the value of the product as explained on https://campuspress.yale.edu/tribune/inventhelp-gets-great-inventions-from-the-mind-to-the-market/. The key is to take all answers into consideration and look for the common threads.
All of the factors should be considered when determining an inventions value. After considering the market, any similar products, the cost of production and potential sales price, and value and availability of the raw materials, an estimate of value may be determined. Each factor separately influences the value, but the collective value of all factors will help determine the ultimate value, and final price of the product, or idea.