Licensing products, process and gain rewards

Edgar's picture

By DAVE ERICKSON

Entrepreneurs who are developing a product (product or process) for commercialization basically have two choices to get their product to the marketplace; manufacture it themselves or license the right to make and distribute to someone else. This process is called licensing out. A license, through a licensing agreement, is a formal granting of the rights to make and sell to another party, who is called a licensing partner. The entrepreneur, or licensor, is usually paid in up-front fees and ongoing royalty payments.

Licensing offers a way to reduce capital investment by selling the rights to those who are in the business of manufacturing, selling and distributing. In addition, an entrepreneur who develops a product may not have the expertise to manufacture and take it to market. Licensing provides a way to develop the product and has experts in these areas do the rest. The chances of success and gaining wealth from the development of a product are greater if you allow experts with manufacturing plants, sales forces, and well developed distribution systems handle taking the product to market.

 

To read more please log in or subscribe to the digital edition http://etypeservices.com/The%20Ozona%20StockmanID57/

Rate this article: 
No votes yet