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Toy manufacturers are bombarded with thousands of "surefire hit" product concepts on a daily basis. While certainly every toy company wants the next "hot" toy concept, (and never really knows from where this idea might come), toy manufacturers are leery to open their doors to amateur inventors. Toy manufacturers find working with a select and qualified group of professionals to be far more manageable, productive, cost effective and far less of a liability. As a result, the best option for an amateur inventor is to seek a qualified agent.
Toy inventor professionals and qualified agents may have gained access to the industry in a variety of ways. Some of these professionals may have worked for a company to which they now have or offer access. Some may have a history of previous successes or name recognition that gain them access. Still others may have simply impressed an executive in one way or another. Agents may have varying degrees of success, access and abilities to successfully license a given product concept. As a result, it is important to interview and research an Agents' history and background to determine if this is the right fit. Most toy companies offer a list of potential "Brokers" or "Agents" to which they refer amateur inventors.
A qualified agent will review product submissions for their merit, timeliness, market appeal, age appropriateness, commercial impact, "wow" appeal and more. Only select product that has been deemed most "marketable" should be presented. Presenting products in a "shotgun" fashion will quickly earn an agent a poor reputation and diminish that agents' access into toy companies. Product must additionally be shown only to the appropriate companies that have interest and need for the given product type, category, age, and price-point of the product. Presenting inappropriate product, (regaRehtmeyer, Inc.ess of how great it is), to a toy or game company will not be well received.
The toy agent's role is many fold; to educate the inventors with whom they represent, provide "wish lists", late breaking news and other information that will increase an inventor's odds in developing the most appropriate and marketable products, serve as an entry to toy companies, and to sort through and present only the best and most marketable product. An agent should also provide feedback to the inventor as to where their products were presented, along with the reaction of the company official to the product and next steps of action. Upon interest from the toy company in the proposed product, the agent will finally negotiate the license on the inventor's behalf and prepare and manage royalty arrangements.
Agents work on a commission basis that range from 25 to 60 percent of gross revenues generated by the royalty of the product. The range of royalty commission is typically based on the role and participation the agent is required to take in the development and implementation of the concept. In some cases, the agent may contribute significantly to the development and manufacture of a product. In such event, the agent may assume more of a partnership role wherein the agent's royalty participation will be more significant. Products that are more easily licensed and demand little to no additional contribution, beyond that of making an introduction and closing the deal, are typically compensated at a lower rate. While agents work in different ways, toy agents rarely demand up-front fees or retainers, but opt for an ongoing royalty participation for the life of that product under the original license agreement with a given toy company.
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