Seacliff Products (Seacliff), a company with innovative ideas, has invented a fishing hook. Seacliff initially created a DIY-kit to sell while they search for a business partner to license their product. Seacliff predicts strong sales for year one and an increase of about 10% for year 2.
Seacliff has created the Supreme Hook, an innovative, live-bait holder. The increase in fish hookups has been demonstrated by tests. A higher number of fish hookups means that the user can have more fun fishing.
The Business Model
Seacliff will have a laser-focused approach to business. This allows them the freedom to be focused on their core competencies, while outsourcing those that are not of significant value. Seacliff, a design company will be focusing their efforts on creating useful products. They will search for a strategic partner, who can manage production, marketing and distribution. Seacliff will be able to make significant profits by outsourcing non-essential tasks without having to worry about marketing, manufacturing and distribution. Seacliff will benefit from steady revenue streams without having to pay the capital costs of selling a product. Seacliff makes good profits, and the product is supported with a professional marketing team and an established distribution system. Seacliff is currently seeking a strategic partner. Negotiations are expected to take place in the near future.
The Supreme hook is a popular choice for fishing. The overall market is valued at $300 million. There are over 39.1 million anglers in the U.S.A. who have fished over 618 million days while taking 807 million trips. The industry’s growth rate is even more remarkable. Between 1955 and 1996, the number of anglers grew at twice the pace of the U.S. populace.
The foundation of the business model is to focus on what your strengths are. Seacliff has taken the premise to heart and is now a design-oriented company. Willamette University JD/MBA is the owner’s education. He gained valuable insights into business development and the legal tools of patents and licenses. After graduating from graduate school, he wasn’t sure where his career would take him. He decided to go to Oregon to become an expert fly fisherman. He fell in love with fishing during this 2-year stint and decided that he wanted the industry to continue. He went back to school and got a Masters in Engineering on the premise that he could pursue the design and development aspect of fishing related products. The Supreme hook was developed by him at the close of his last graduate degree. His previous degrees (JD/MBA), made it easy for him to start his own company and locate a manufacturer to license the product.
Seacliff is an innovative company that avoids the traditional need for significant start-up capital to produce a product. Instead, it licenses a patented item. Seacliff is able to license the product and spend its time on more value-added activities like future designs by not having to pay for production capital. Profitability will be reached by month one.
The mission of Seacliff is to maximize the profit potential of its newly patented fish hook invention (the Supreme) via licensing and other means, and to further develop other innovative products suitable for the fishing gear market.
1.2 Keys for Success
Here are the keys to maximising profits from licensing this patent
- To distinguish the manufacturing and the marketing of Supreme.
- Search out a manufacturer capable of producing the hook and give them exclusivity.
- You will need to find a competent marketing company that is knowledgeable in fishing gear, who can recognize the potential of Supreme and be willing to spend the necessary marketing budget.
- Seacliff will benefit from a partnership agreement between the marketer and Seacliff that is reasonable and well-thought.
Here are the keys to profiting from the patent form make-it-yourself kits:
- Recognize that the market is smaller for the kit.
- Follow the proven price structure formula that provides attractive margins to all levels of the distribution chain (manufacturerâ€™s representative, wholesaler, retailer).
The main objectives are:
- Locate a suitable manufacturer who is willing, on an exclusive basis, to produce the patented Supreme hook at a reasonable price. This would, at the retail level, cause the Supreme to sell for under 150% of a normal hook of similar size.
- Locate a medium-sized company marketing fishing gear that recognizes and can commit the resources needed to mass-merchandise Supreme internationally and domestically. A three percent royalty will be paid on all purchases made by the exclusive manufacturer under an exclusive license arrangement.
- Market successfully the product in kits form. Reach break even point (370 kits) within the first three months. 8.333 kits sold in the first 12 months.
- Complete the website design.
- Join the American Sportfishing Association and reserve a booth at this year’s ASA tradeshow in Los Vegas.