thermionic
Well-known member
- Joined
- Jun 3, 2004
- Messages
- 1,671
Hi,
Let’s say you’ve spent several years developing various blocks of circuitry. They were originally developed for your ‘own’ products, but lack of promotional finances and rent-paying duties has stalled the projects from getting off the ground. That’s not to say they won’t get off the ground *one day*. The circuits were designed by a variety of designers who you paid and you own the copyright (at great pain + expense).
So, you tell some established ‘boutique’ brands about these projects and loan them prototypes. They want you to build them, with their branding stamped on them… you think that business is no place for egos, and you’re not about to turn away cashflow (I live in the real world, unfortunately).
My question is: how do you structure the deal so it’s fair? I’ve already ‘licensed’ one product and guess what they did? They told me to engineer it so that I sold it to them for 60% below retail, which I did. They then increased the RRP so that they’re making 3-4 times what I’m making…all for picking up the telephone and telling some idiot that ‘it sounds good, buy it’, whereas I have to build and test the things…
Structure-wise, I don’t want to force them into giant MOQs because that’ll result in stalemate. Nor do I want having to stomach MOQs from my suppliers without them sharing the strain.
I really don’t want to get screwed. One benefit is that, long term, I get the kudos if the products are successful (providing they don’t try to gag me…). Currently, the only provision is that they keep the product if they sell a certain amount a year. However, this worries me legally, as they could argue they’d broken it to the market, regardless of their sales. They will also argue that they 'developed' the product using their ears, i.e. several prototypes were auditioned before final design was agreed. I guess the only way is to retain copyright to all topologies and ensure their versions are cosmetically unique. If they try and ask me to sign over circuitry IP, then I quote them a typical figure a design agency would charge.
Am I destined to get screwed? I have a good marketing brain and distributors invariably call me for advice… I’ll probably be putting together most of the marketing campaign. Am I letting insecurity get in the way of releasing my own gear? VHS won out over Betamax, but which was superior? They're risking the cash, is my problem that I don't have the confidence to risk my own? Should I resign myself to getting screwed, on the basis that success will instil confidence to do something off my own arse?
Anyway, if you’ve got this far into my rambling post, thanks!
Justin
Let’s say you’ve spent several years developing various blocks of circuitry. They were originally developed for your ‘own’ products, but lack of promotional finances and rent-paying duties has stalled the projects from getting off the ground. That’s not to say they won’t get off the ground *one day*. The circuits were designed by a variety of designers who you paid and you own the copyright (at great pain + expense).
So, you tell some established ‘boutique’ brands about these projects and loan them prototypes. They want you to build them, with their branding stamped on them… you think that business is no place for egos, and you’re not about to turn away cashflow (I live in the real world, unfortunately).
My question is: how do you structure the deal so it’s fair? I’ve already ‘licensed’ one product and guess what they did? They told me to engineer it so that I sold it to them for 60% below retail, which I did. They then increased the RRP so that they’re making 3-4 times what I’m making…all for picking up the telephone and telling some idiot that ‘it sounds good, buy it’, whereas I have to build and test the things…
Structure-wise, I don’t want to force them into giant MOQs because that’ll result in stalemate. Nor do I want having to stomach MOQs from my suppliers without them sharing the strain.
I really don’t want to get screwed. One benefit is that, long term, I get the kudos if the products are successful (providing they don’t try to gag me…). Currently, the only provision is that they keep the product if they sell a certain amount a year. However, this worries me legally, as they could argue they’d broken it to the market, regardless of their sales. They will also argue that they 'developed' the product using their ears, i.e. several prototypes were auditioned before final design was agreed. I guess the only way is to retain copyright to all topologies and ensure their versions are cosmetically unique. If they try and ask me to sign over circuitry IP, then I quote them a typical figure a design agency would charge.
Am I destined to get screwed? I have a good marketing brain and distributors invariably call me for advice… I’ll probably be putting together most of the marketing campaign. Am I letting insecurity get in the way of releasing my own gear? VHS won out over Betamax, but which was superior? They're risking the cash, is my problem that I don't have the confidence to risk my own? Should I resign myself to getting screwed, on the basis that success will instil confidence to do something off my own arse?
Anyway, if you’ve got this far into my rambling post, thanks!
Justin