This is my first post to Edison Nation so I want to say hi to all and thanks in advance for your help and advice.
I've got a new product that I'm working toward monetizing. I've studied Nolo's "License Your Invention", listened to Steven Key's "One Simple Idea", and done a lot of general research but I haven't run across any advice for one specific question.
Here's my dilemma. I'm developing an improvement to an existing component to a tool that's currently manufactured by many different tool companies. If my improvement is embraced by the customers that buy this specific tool, then all of the manufacturers are going to want to be able to have it available for their tool. I know that they would probably all want to get an exclusive license but that would severely limit my market so I'm trying to find a better balance.
These are the choices I'm considering (in no particular order). Please add anything else you think I should consider.
1) License the idea to the largest manufacturer exclusively and let them handle everything. I suspect that this will result in the smallest return for me but it would probably be the least time-consuming.
2) Approach all of the manufacturers (more than 20) at once and license to all that are interested. This will likely yield lower royalties per item but the market reach could be global because nearly all of the tool companies are international.
3) Find an injection molding company that can manufacture my product to fit each of the tools that the tool manufacturers are currently selling. I would set up a contract with the injection molding company to be the supplier to all of the tool manufactures for this component. This is the way all major manufacturers (automotive, industrial, etc) get the parts for their finished product. Ford doesn't make pistons. Those come from Mahle Gmbh which makes pistons for virtually every auto manufacturer. In this scenario, my only involvement would be to monitor the relationship between the tool companies and the injection molding company. This is more involved than simply licensing and viewing from a distance but it gives me a better position in the supply chain that (I think) will give me a much better return per piece. It makes it simple for the tool companies because they don't have to manufacture the parts and it will create much better product quality and consistency because all of them are made by the same company.
Let me know what you think of my options. Thanks again!