The Top 10 Industries to License Your New Product Ideas in 2021 Where to target your creativity this year.
By Stephen Key Edited by Jessica Thomas
Opinions expressed by Entrepreneur contributors are their own.
In my last article, I described five inventing and licensing trends that will dominate this year. For independent product developers, the question of where to target your creativity is always an important one. Below, I list my top 10 industries to consider designing for in 2021.
Related: 5 Inventing and Licensing Trends That Will Dominate In 2021
1. Toy and game
The toy industry has embraced open innovation for many decades. According to Brian Chapman, president and head of global design and development at Hasbro, 50 to 60 percent of the company's portfolio started as an idea from the outside.
More recently, leading toy companies like Hasbro have begun inviting novice and amateur toy inventors to pitch them their ideas. Why? Because this industry requires a steady supply of new and novel ideas every year, much like fashion. Turnover is fast and furious.
In the first three quarters of 2020, toy sales in the United States rose by 20 percent. No surprise there: Forced to stay at home, families have developed new habits, traditions and ways of entertaining each other.
Bring your enthusiasm and prototypes to pitch!
2. Pet
Who doesn't adore their dog or cat? Americans have continued to spend more on their furry friends every year since 1994. The American Pet Products Association estimated that people in the United States would spend nearly $100 billion caring for their pets in 2020.
The pet industry has been working with independent inventors for many years now, and I have seen many products get licensed in this industry since the pandemic began. Prototypes are preferred. Intellectual property is not as important.
The president of one family-owned pet company for over 65 years told me explicitly: "If we have a product that we feel we can manufacture and be first to market, we will move forward and we will work on the royalty agreement even in the absence of a patent."
3. As Seen on TV
Also known as "direct response television," this extremely fast-paced industry is known for marketing highly memorable hit products using video and calls to action. Today, ASOT companies do not just market their products on late night infomercials, they also make great use of social media. This is industry is rough and tough, but you can hit a goldmine with the right product at the right price.
In the past, ASOT companies exclusively sought products with mass market appeal and that hit a narrow range of price points. That has changed. Today, because niche consumers can be targeted very specifically using social media advertising, this industry is looking for a wider range of products at different price points.
If your product idea has a demonstrable wow factor, this is a great industry to pitch it to. A small improvement to an existing product won't cut it. They are looking for products that are truly new and novel, and prototypes are required.
4. Kitchen/housewares
This industry has been licensing ideas from inventors for many years now. If you have the next kitchen gadget, try to reach out to those companies looking for something brand new. There are also numerous kitchen companies seeking minor improvements to popular products that have been selling for years. You can use a sell sheet — a one-page advertisement highlighting the big benefit of your idea — to pitch these companies.
Be prepared to create a prototype if and when you get some interest. Proof of concept is a must. The financial and health benefits of cooking at home mean this industry never goes out of style.
Related: Inventors, Here's How to Avoid Getting Ripped Off
5. Hardware
This is another industry that has thrived during the past year and will for the foreseeable future. Arguably, there has never been a better time to submit your ideas to hardware companies, which have been working with independent inventors for many years. Make sure to file intellectual property and have your prototype ready.
6. Novelty gift
This has always been one of my favorite industries to create ideas in, partly because the stakes are low. These companies are inventor-friendly and do not require prototypes to pitch them. In most cases, no intellectual property is required, but it never hurts to confirm.
Here's a pro tip: Try creating something that will sell every single day, not just a seasonal item.
7. Baby and juvenile
Historically, this industry has been difficult to break into, but I have been seeing more and more ideas get licensed in this particular industry. So get those creative juices flowing, moms and dads. I know you're dealing with problems with your children every single day. Think about what types of products would make your life easier, then go create them.
8. Outdoor/gardening and BBQ
Gardening and other outdoor activities like barbecuing are thriving. The fact that homeowners have invested in making their outdoor spaces more livable will continue to affect their behavior and spending habits in the future. These industries have historically been very inventor-friendly.
Related: How Do You Know If You Have a Good Idea? Try These 3 Tests.
9. Home fitness
This industry is on fire. Most gyms are closed, but everyone stills need to stay in shape. When there were only a few major players manufacturing large pieces of equipment for home use, this industry was not been terribly receptive to independent inventors. But that's changing. Home fitness is no longer about bulky, expensive equipment, and doors are opening as a result.
10. Health and beauty
This industry has a long history of working with outside product developers. If you plan on approaching a large market leader, make sure to have filed intellectual property first, because it's typically required. Large market leaders have the resources and the incentive to enforce their intellectual property portfolios. In this industry, proof-of-concept is very important.
Before you decide to submit any one of your product ideas, do a thorough background check on the company's history of working with inventors. Are they inventor-friendly? Check to make sure.
Keep in mind that midsize companies are hungrier for new product ideas than large market leaders — they will get back to you faster and are more likely to appreciate your hard work. And, of course, before reaching out to any company, make sure you have filed the correct intellectual property.
Related: Inventors, Here's How to License Your Idea and Make Money
