Got a Good Product Idea?
"You need to be someone who can do everything," to be a successful proprietary molder, says Richard O'Donnell, president and owner of Gaer Hardware Ltd. (Woodbridge, Ont.). O'Donnell is a manufacturin...
“You need to be someone who can do everything,” to be a successful proprietary molder, says Richard O’Donnell, president and owner of Gaer Hardware Ltd. (Woodbridge, Ont.). O’Donnell is a manufacturing engineer with experience in mold design, product design and injection molding machine operation. Since he developed a proprietary line of molded window hardware (such as hinges and latching devices), he’s also increased his knowledge of marketing, patent legislation, customs regulations, trade shows, and managing a sales network.
It’s quite the resum, and it probably holds true for most molders who’ve made the leap to proprietary products.
“Molding proprietary products is a lot more risky,” says Brendan Lowe, vice-president of sales and marketing for Weeplay (Dundas, Ont.). Weeplay is a manufacturer of rotational molded children’s toys. “You’re doing all the research and development yourself. You have to identify the market for your products, and do a lot of checking related to marketing and selling, such as focus groups and setting price points.”
“You want to differentiate your product, be unique and innovative,” suggests Lowe. “If you don’t think you can do it better, don’t get into the market. There are very few break-away products that revolutionize a market. Usually, products just enhance existing designs. This type of ‘me-too’ products just stress the profit margins.”
Do you have what it takes?
“It has always been our credo at Gaer to do things right,” says O’Donnell. When Gaer was strictly a custom molding company, O’Donnell often found himself redesigning products for customers to lower the manufacturing costs, but he found “life as a molder is just too complacent.”
O’Donnell choose to enter the window manufacturing industry, and set out to design innovative products that didn’t infringe on any patents. “I took a plastics failure analysis course, and a course in value analysis (how to make parts more cheaply). These both really helped.”
Before long, he had patented some designs, and developed a complementary line of window hardware products.
But O’Donnell had no marketing experience and little exposure to international business. He ran into roadblocks with legislation, customs and creating a network of representatives to expand into the United States.
“I tried several different customs brokers, and finally found one in Buffalo that bends over backwards to be helpful. The broker has also benefited from learning the Canadian business environment.”
In the past two years, Gaer has finally established a good network of independent representatives, and has tripled its U.S. sales. Gaer’s national sales manager is based in the U.S. and has a good understanding of that market.
“A lot of custom molders won’t have the expertise in-house for a successful foray in the proprietary business,” says O’Donnell. “They’ll need a lot of money to buy the knowledge. Even then, it doesn’t happen overnight.”
Gaer still does some custom molding — it helps to fill in the gaps left by its seasonal window products line.
Use technology to your advantage
There is one similarity between successful custom and proprietary molding: using technology to its full potential.
Gaer has 13 Battenfeld injection molding machines, many of them state-of-the-art presses with Unilog Tc40 controls. “I have a plant supervisor that understands the potential of these machines and wants to utilize it,” says O’Donnell. “We use all the features, and manage to continually improve cycle times and part quality. We’ve kept our prices stable as material costs rise by using up-to-date technology.”
Gaer also frequently uses stereolithography and rapid prototyping techniques. “It gives us a chance to see the part, get a feel for it, and make any modifications before we make the mold.”
“That saves a lot of money in the transition from an idea to a finished part.”
Marketing, the new frontier
“It is possible to use manufacturer’s representatives,” says Lowe, “but you’ll still need a lot more people to carry out the marketing function.”
Weeplay has its own sales and marketing staff, but relies heavily on dialogue with customers for direction in product development and market trends.
“You try to develop a product in concert with your customers, not force one on them,” advises Lowe.
If you are thinking of launching a proprietary product, Lowe says you need to know the marketplace before you get into it. Associate yourself with people who are familiar with your target business. If the product will sell in a retail environment, you have to consider market research, merchandising in the store, design for distribution, packaging, your sales force, and price points.
Once your product does get on the market, “be aware that if it is a good product and it’s doing well, other companies with similar manufacturing capabilities will try to copy it. You could see “price compression” happen very quickly,” warns Lowe.
However, if your new product also requires a proprietary process it will be much more difficult for others to compete. CPL