The first three stages of evaluating a new product are as follows: Step 1, evaluation of product features and people will be reasons to buy, Step 2 to determine how the product is manufactured, and the step 3, regardless of Whether the product is not, or can obtain adequate protection of intellectual property, while not infringing on other patents.
Inventors and informing customers about new products tend to be in sync for these three steps in the evaluation of a product, although the inventors of the patents make it tend tothe most important steps, while the majority of experts of new products, the less added to the list, but never least the first three steps are very similar.
The next important phase of evaluation for the people in the industry, which is often overlooked by inventors, is the question "Can money to answer the product?" And we hope that much money. Inventors tend to feel if the product is true, it will earn money. New experts know that this is not the case. The pricing and perceived value compared to manufacturingCost is the crucial question for the experts.
The aim of this paper is to provide a better understanding of the inventors spend money with a new product to determine the whether or not involving the inventor make money every product sold. The goal is to understand the inventor to assess the perceived value of the goods to the consumer, how much they receive from the sale of each product to its distribution in relation to the selected channel, and then they will understand ifEarn money when you compare that amount to its cost.
Consider, for example, a set that makes a hard bound book for the book industry. A comparison group discussion of work on products that must be replaced to determine the perceived value of $ 30.00 retail. If the inventor of the sale of scrap booksellers through a distribution network will make its 12.00 $. As a rule, the sale of the distribution is that the manufacturers selling price should be twice as highCost to make money. Thus, a person, new products, the feeling that the product can earn money when the cost of manufacturing, including packaging is $ 6.00 or less.
Earning money through the distribution network
I start out with the area that the creators seem to understand less: the money that the inventor is determined by the distribution network. The distribution methods are the most common:
By the dealer to the retail
Price paid by end users: 100Percent
Prices paid at retail: 60 percent
Price to be paid by the dealer: 42 percent
Typical sales / marketing costs: 10-12 percent
Net Enterprise: 30-32 percent
Directly to retailers
Price paid by the end user: 100 percent
Prices paid at retail: 50 percent
Prices paid by Distributor: N / A
Typical sales / marketing costs: 15-20 percent
Net Enterprise: 30-35 percent
By dealers to commercial customers
Price paid by end users: 100Percent
Price paid to the retailer: N / A
Price to be paid by the dealer: 60-65 percent
Typical sales / marketing costs: 15-18 percent
Net for Business: 42-50 percent
Users on the sale of consumer and industrial products
Price paid by the end user: 100 percent
Price paid to the retailer: N / A
Prices paid by Distributor: N / A
Typical sales / marketing costs: 30-50 percent
Net for Business: 50-70 percent
If you are this chart you can see why most people new productsfeel a product should be produced for 25 percent of the final sales price. If this is not the case, the company is often forced to sell direct to consumers or industrial customers, and usually they can only generate a fraction of the revenue to which they can sell through distribution. These small amounts, it is difficult to cover the fixed costs such as rent and administrative salaries, including salaries to the inventor. If your cost of slides, you significantly reduce your productAbility to make money.
Value
Perceived value relates to what people are willing to pay for the product. Once you create a perceived value, we can compare the expected costs of production (which) will be discussed in the next section of this article to see if the policy can be satisfied that the costs of producing products amounting to 25 percent the end-user prices.
Inventor generally too high perceived value to their product, place andexperienced people from new products tend to be made minus the value at the end of most goods. You will see that it is important to establish before the perceived value of talking with people who understand the business and establish that you may want for your success. One reason is that you show the perceived value that will help you to claim the interest that your product to earn money. A second reason is that the evidence of your contacts, to show that you understand the importancePrices in the process of new product.
Consumer Surveys
Consumer demand for the perceived value of your product is effective if you have any consumer to an assessment of price developments, with several other products in the same category of goods. For example, the process is what I do for a poll for the garlic turn to use a new way to chop garlic offers. The inventor was the Garlic Twist suggested retail price should be $ 12.95 $ 15.95. For the price of the inventor mustreceived five to eight products that are in the kitchen with the retail prices of $ 6.95 to $ 19.95. Then, the inventor has only eight products and the people they ask to show list of value by the highest value of the product initially. I found that you can appreciate the product very well with a group of 10 or more consumers. Usually seven or eight people you poll ranking the product of two standard products. You must then bring the perceived value of the product inbetween the price for these two products.
To use the Garlic Twist, the inventor, in order to evaluate these products:
NorPro bread slicer with Crumb Catcher: The suggested retail price $ 19.99 Progressive Vegetable / French Fry Cutter: The suggested retail price $ 14.99 Trudeau Adjustable Cheese Slicer: 9.99 Borner Food Safety Holder Suggested Retail: $ 6.95 suggested retail NorPro Grip Ez-Professional Meat tenderizer $ 7.95 suggested retail Progressive International Egg slicer Suggested retail price $ 12.95Boerner fine julienne vegetable shredder Suggested Retail $ 13.95 Note: All these products are available at Amazon.com
They do not talk to anyone about any product, prices, and you want to try a product display with prices to your subscribers, will not know. How do you classify your affiliate products so as to be the highest value first, you will be able to create a perceived value of your product. Before going to the industry, people, prepare a summary of the experiment, showing the goodsThey used to assess the price of the product and a summary of what the participants have given your values, and your other products.
Store Polls
Another tactic to show the perceived value, especially if you can not compare a product that is easy to show people your product to competitive products. For consumer products, you can point out five or six products in the same section of the store, as you do. For industrial and commercial products you can use the lists of productsMeasuring or magazines to illustrate competitive products. You can then use the prices for these products and price your project to your specifications and advantages over the competition. Again, be ready in time to discuss a potentially valuable contacts. Its brochures or photos of competitive products and ready to show why your product better than others.
The projection of your manufacturing
Now you have a perceived value of yourProduct you must be able to demonstrate that the manufacture of the product and packaging costs are 25 percent or less of the perceived value. This means that should your production costs of less than $ 0.50 retail price of $ 2.00 is your product. What makes this process difficult is that the cost of $ 0.50 is in full scale production. As the inventor always start low, sometimes they have only a prototype, the costs are high, often very high, because they do not have the volumegenerate lower prices and costs will almost never succeed, the threshold of 25 percent. An important skill for inventors is to estimate a multitude of tactics available to what is the price to be loud. Since the cost of products includes both manufacturing and packaging, you need to appreciate both.
The simplest way to estimate the cost, is to sell will find products for construction and packaging industries at very similar. You have two different products, and for the useConstruction and one for the packaging, if you can not sell, products such as packaging will be produced similar to yours. Then use the cost on this product, as well as your in the manufacture of small series. You can use the difference in percentage of the price to determine your estimated costs. Here are the steps:
1. Products are similar in design. These products should not be in the same industry, only one product with a similar design. For example, if your productGardening in the high-impact plastic and holds such as calculators and is 24 cm high and 24 cm wide and 18 inches deep with 12 places for garden tools, you can find another product of plastic parts of high incidence of similar complexity. This could sort laundry owner, a system of underground storage, a stereo rack, or any number of products from office supplies.
2. You want to make the cost of your product in large quantities. You will use the sale price of the product and it is multiplied by 25Percent (or 0.25). This price should be near to the price of the manufacturing sector in most retail products in four to six times its production costs.
3. Your price is not the same as the equivalent product, there are differences. You must therefore offers from manufacturers for your product and for the similar product obtained.
4. You must determine how the product is made comparable. If you do not know, you can contact SCORE, which are a group of companies, people in retirementwith a variety of experiences, many of which are in production. They meet at no cost to you. You can find the nearest SCORE office by the http://www.score.org/findscore website.
5. Once you know the process that your product, you just need the manufacturers, which can be found on the production of 1,000 and 5,000 units offer. You can see from these manufacturers:
– Ask your contacts in the industry
– Look in the Yellow Pages or a business to businessPhonebook.
– Locate the directory of your state and the neighboring industrial states that are in major libraries.
– Look through the Thomas Register of American Manufacturers. They have classified a fairly complete list of manufactured goods by category and state.
– Check the Web site Job Shop Technology Magazine, which included a list of manufacturers by category.
6. If you have a quote for your product and the comparable product, you can see what theDifference. Saying that the estimate of the product by 25 percent higher than the comparable product. Then the cost of your product for high volume production the cost of comparable products in step 2 are obtained by multiplying by 1.25 or 125 percent.
The final analysis
Take your production cost in Step 6 and compare the perceived value of the previous section. Industry people believe the product has a chance to win money if the cost is for the productionless than 25 percent of end users.