One of the crucial parts of the commercialisation process is implementing a distribution strategy for a new product. The inventor has put in the hard- yards (both in capital and time) and now it’s time to determine how and where the consumer will buy your product through the most appropriate distribution channels. Reaching your target market is crucial for successful market entry and commercialisation. These are the key points to consider in a distribution strategy:

Target Market

Consider the target market, e.g. market size, market opportunity, market segmentation and target market applications. Decide which territories both locally and/or internationally you wish to sell your product.

Exclusivity

Some distributors will request for exclusive rights to distribute your product within a set territory or market segment. Consider the commercial implications of this type of agreement and whether this will impact your product’s ability to reach the market.

Price of the Product

What price will the distributor pay to the manufacturer for the product?

Past experience

Consider the size and relevance of the distributor. A distributor that distributes medical devices in your chosen speciality or has existing products that are compatible with your device will have experience and a proven track record in reaching targeted markets.

Protect your IP

In the search for the perfect distributor, you may have to reveal commercially sensitive information regarding features of your medical device. Ensure confidentially or non-disclosure agreements are signed prior to undertaking these discussions.

Performance Measurement

How will you test, monitor and measure the performance of your chosen distributor? If a distributor is not up to scratch, clauses that allow for termination for cause and convenience should exist in the distribution agreement.

Draft a distribution agreement

These are the agreed upon terms and conditions upon which the distributor agrees to distribute the goods. Inner Maven can provide assistance with this.

At Inner Maven, with our links to industry in Australia and in key markets around the world, we can assist inventors in implementing an effective distribution strategy and to find the right distributors for your medical device or technology.

The commercialisation process is an arduous and complex one. You invest your heart, energy and your finances, funding an invention hoping to be the next popular innovation in medical devices. Before implementing a market entry strategy, however, it is crucial that extensive market research is performed on potential competitors and whether similar products already exist. Armed with this valuable information, it is then possible to position your product more competitively.

To perform a competitor analysis, consider the following points about your own invention:

• How is your invention better than others?
• What are the key features and benefits of your technology?
• Can it be manufactured to a higher standard?
• Is there a strong market need for your product?

Once you have reflected on your own invention, it is time to perform external research on your competitors. Consider:

• What prices are your competitors selling their products?
• What are the advantages and disadvantages of their technology?
• What territories are they in and how big of a market player are they?
• Is their IP or patents associated with their technology and how?
• What stage of development are their products?
• Do they have a portfolio of products that is aligned with your technology? If so, you could consider a potential license agreement, partnership or even a joint venture to get your product to market.

At Inner Maven, we perform extensive competitor analysis to assist clients in understanding the market and developing an effective market entry strategy.

A partnership is an association of people who carry on a business as partners and receive income jointly (ATO). The partners are all joint owners of a business and equally responsible for decisions made on behalf of the company. In other words, all profits, losses and responsibilities are equally shared, unless specified otherwise in a partnership agreement. One such example for an inventor looking to commercialise an innovative medical device, would be entering a partnership with a medical institution. This would foster medical device innovation and provide access to patients during the early stages of product development. At Inner Maven we can assist inventors to consider the pros and cons of embarking on a partnership.

Pros

• Ability to raise funds for the commercialisation process is enhanced, as multiple partners are able to contribute personal funds if necessary and borrowing capacity is increased. This is particularly helpful during the startup phase capital requirements are high.
• Partnerships allow people from different areas of expertise to pool together knowledge and experience to run a mutually beneficial business.
• Responsibilities and workload are shared amongst partners.

Cons

•  Profits are shared between the partners and an agreement must be reached as to how funds are distributed fairly and equitably – this can sometime cause friction.
• Profits are shared between the partners and an agreement must be reached as to how funds are distributed fairly and equitably – this can sometime cause friction.
• There is unlimited liability. For partnerships with equal responsibility, partners are also equally responsible for the debts and obligations incurred by other partners, during the normal course of business.
• There is a potential for disputes in decision making, as different partners have different expectations and objectives for the business. Professional advisors or consultants can be valuable in this case to provide independent advice.
• Decision-making can be slow, as consensus needs to be reached between all partners. You do not have complete control over the business.