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Do I need a working prototype before I submit
my idea?
No. Ideally, everyone who comes to us would
have a complete working prototype. But we realize that this
is beyond the skills and means of most inventors. In fact,
most times we'd advise our clients NOT to take
this step until after their item has been evaluated because
of the eventuality of changes. Our teams can work from rough
prototypes, drawings, video concepts and even clear written
descriptions. Just submit anything you feel is going to do
the best job of getting the idea you have in mind across to
us!
How long will it take after I submit my idea?
Generally all Market Opinion testing on
product submissions is completed within four weeks of receiving
your product. If your item has shown extraordinary market
potential and we begin shopping it to the industry, the standard
duration of a contract with Rehtmeyer Inc. is 18 months. If
your idea catches the attention of a prospective company,
they will generally need up to 8 weeks to complete their own
internal review. If a company picks up your product, the rule
of thumb is usually one year from the time your item is licensed
to the time it hits store shelves.
How much can I make on a licensing deal?
The rule of thumb is that inventors are
paid 5% of wholesale gross. So here's a simple formula. Say
you have a doll, and that doll will retail for $20.00, it
would then likely wholesale for $10. You'd get $.50 per doll
royalty. Now suppose that doll sells 300,000 units. That makes
a total royalty of $150,000!
What's a "Royalty"?
Royalties are a "rent" that the
company pays for the use of your idea and patent. This is
how you would be paid in a licensing deal. There is almost
no limit to total royalties, but royalties are based specifically
on the sales success of your idea. If the product sells well,
both you and the toy company make money. If it doesn't sell---
there's no royalty.
How long does the royalty last?
The royalty stream continues for the products
full life cycle. Trendy products are often called "flash
in the pans". These are products with very high sales
that last a short life cycle-- typically this is a three year
cycle. "Evergreen" products are ones that continue
year after year. Some products last for decades.
Are there other ways to make money from my
idea other than in royalties?
Absolutely. You can be the "toy or
game company" yourself. You can have a quantity of your
product manufactured and sell it directly to retailers or
buyers. We call this "Self production". The advantage
of self production is that you maintain full control, can
"push" your item with passion only an entrepreneur
will have, and will gross a larger return per item.
How does my financial return for licensing
compare with that of self production?
Taking the same scenario of a $20.00 retail
doll, in licensing you would make $0.50 cents per unit sold
(less returns, etc.) divided by the percentage you are sharing
with your Agent. On average, this would equate to an earning
of $.30 per doll sold. For self production, you would earn
the difference between the cost of goods and wholesale. In
the doll scenario, you'd earn $5.00 per doll sold. In licensing,
you are gambling that the volume of sales will be substantial.
In self production, you are gambling that you can sell a minimum
of 10,000 units to typically make money.
Do you do anything aside from just toys &
games?
Rehtmeyer Inc. specializes in consumer
entertainment including: toys, games, sport, novelty, candy
novelty, electronic entertainment (not gaming software), juvenile
(baby care) and entertainment properties.
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