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Protecting business ideas and reaching decision-makers - Q & A

Dwight from NY calls in wondering who to contact in a business if he wants to offer some advice on different ways to distribute and market a product, and also how to protect his ideas and profit in the process?

Dwight: Hey, Sloan brothers.  How you doing? 

Rich Sloan: Doing great.

Dwight: I’m wondering who do I go to in a company and I see a product and I think of a new way that’s kind of a lateral way for them to distribute it maybe with a different partnership or in a different store.  Part one, like who do I go to in a company to talk to about that?  Would that be the vice president of business development?  And part two is how do I protect myself with the idea so that I can get myself cut into the profit?

Jeff Sloan: Well yeah, that’s a really tough one.  Tell us in a nutshell again, not specifically what the idea is but what the idea is about.

Dwight: Basically I see a product and I think of a great new way that they could market it using perhaps a- a– someone with a wide distribution outlet, but I don’t know who to approach in the company and I don’t know how to get myself cut into the profit.

Jeff Sloan: Well here’s the problem you’re gonna have, here’s the challenge.  You don’t have something that you can protect with intellectual property.  It can’t be really copy written, it can be trademarked as you present it and it can’t patented.  What you have is a business strategy or a tactic that…

Rich Sloan: Business development opportunity.

Jeff Sloan: Right it’s a development opportunity, business opportunity, a strategy for the company to deploy to do better in sales.  So I don’t think in its current form you can go in and make any money off that.  But I’ve got a suggestion for ya.If you think that some distributor is part of this equation and they can make money from it, what I and therefore the company that’s selling this thing that you’re thinking about can also benefit from it, what I think you should do is go to the distributor, cut a relationship with the distributor whereby if you bring them a product that they buy and can sell a lot of, that you’re cut in as a rep on the sale of that product since you brought the product to them.  That’s what I would do.

Rich Sloan: See there are independent representatives that are often involved in identifying new outlets or certain outlets to sell products.  And if you’re seeing outlets out there that are untapped and good places for this product to be sold, as Jeff is saying, you can position yourself as that independent rep who forms a relationship either with the distributor, as Jeff said, or perhaps directly with the company.  So those are a couple of tactics. And in terms of who you would contact at the companies, you know, there are sales forces often that companies have and in those situations where there is a central sales office you want to call the people who are the head of sales.  And in those cases where you think it might have a broader impact on the product, perhaps someone also involved in marketing of the product.  So…

Jeff Sloan: So essentially what you’re doing here is you’re being the go-between between two parties who can benefit -- all three of you can have a win-win.  You can get a piece of the deal, the distributor gets a great product to sell, they profit from that and the- the company that you’re thinking about that should distribute their current product in this method, through this distribution method, they benefit as well by increased sales.  So it’s a win-win-win if you can put it all together.  It’s a little tricky, but it can work and I’m sure it has worked and I- when it does work it can work really, really well.  Typical rep commission by the way, just so you know, is 5% on a product, somewhere in that neighborhood.  They range but that’s a good average.  And so what you might be able to do is go to the distributor and say, if you buy this product, I want 5% of the net sales.

Rich Sloan: Right.  And Jeff let’s – on Dwight’s behalf and everyone else who’s listening, let’s finesse a second here, let’s finesse the concept of a business plan for an independent rep.  Would you want to have one product that you’re trying to get into this retailer or would you want to have multiple products to try to get into this retailer so you have that one relationship but you have multiple products that you’re repping to? 

Jeff Sloan: Absolutely.  Multiple products are always the best way.  You spread your risk across a variety of products; you’ve created efficiency by making that one stop as you said.  If you can get five products on the shelf instead of one you’ve got a greater return on your investment of time and effort to get that account. 

Rich Sloan: And in case one product doesn’t sell well your fate is not doomed, that’s because you’ve got other products in that account that are doing well.  So that’s a- that’s a concept for a business plan as an independent rep.  You wanna get as many products marketed to the same account as possible. That is called efficiency.  You wanna go into that?

Jeff Sloan: And that spells opportunity.

Rich Sloan: Yeah, right on.