How will a product be made available to customers for purchase? Who will sell the product?
Selecting the distribution and sales channel and planning the sales promotion, marketing and advertising measures are all core questions in the commercialisation of a product. By means of its business plan, the company must ensure the rationalisation of these areas and the availability of the required basic expertise among its personnel.
Smaller companies will not possess all of the necessary expertise, which means that they must obtain partners to secure the requirements for success. Selecting reliable partners and ensuring smooth cooperation with effective agreements are solutions that are worth the investment.
In export operations, collaborative relationships are usually necessary, as only a partner that is intimately familiar with the local conditions is qualified to assess the opportunities for the success of a product in a foreign market.
Selling a product idea or invention
When a company or individual inventor has developed a product idea with the potential for success, the choice must be made as to whether or not it is feasible for the company or entrepreneur to invest resources in the commercialisation of the product. In many cases, it may be more prudent to sell the rights to the idea partially or even entirely to a good partner, who will then assume the responsibility for commercialising the idea or invention.
The rights to an invention or product can be sold to a third party partially. This arrangement is called licencing. In licencing, the owner of the idea grants the licensee company rights to the product or invention in question, in exchange for a fee. Usually, the rights entitle the licensee to manufacture and sell the product. In other words, the licensor maintains ownership of the product idea and receives the agreed payments for the licences.
If a company or individual does not wish to commercialise a product, service or invention, all rights to it can be sold to a third party. Once the agreement has been made, the creator of the product or invention no longer owns the idea. Instead, the buyer will be responsible for its further development, distribution, protection, etc. The details of the trade are agreed upon in a contract of sale, and the documents pertaining to the trade must be prepared with care. The actual worth of the rights to the invention or product is naturally an essential matter to be negotiated by the contracting parties.