What is Licensing?

Licensing is an agreement between and retailer and a product developer/inventor (YOU). The agreement states that the retailer will manufacture and sell the product for the developer/inventor.

Basically, its having other people spend their money to produce and sell your idea and you getting royalties in return. You don’t have to build your own business this way!

You don’t have to put any upfront money into creating your invention, you can just sell your idea!

You have a couple options;

(1) You can sell your idea outright for one lump sum (the idea is no longer yours to profit from)

Or

(2) You can choose to receive royalty payments based on each sale. The royalty payments are a lot less than if you were to create your product yourself and sell it, BUT you don’t have to spend a ton of your own money or try to find funding to build your product…all at the risk of it possibly not selling in the marketplace.

Companies are now looking more and more to find outside inventors (people like you with great ideas!).

They want to outsource their product development because it brings down the costs associated with having an in-house product and development team.

Also they see outside inventors as better product developers because they tend to be someone who has experienced a problem and is inventing a product to solve that problem.

One company that is seeking outside inventors is Proctor & Gamble with their Connect and Develop program. You can read more about this program in my article Submit Your New Invention Ideas to Proctor & Gamble.