As a brand owner who is sourcing co-packers and pitching vendors, it is perfectly understandable to be apprehensive about releasing your carefully crafted and tested ideas out into the universe. The consumer goods game can be cutthroat - the struggle is real, and the fear is legit. Knowing how to arm yourself properly is key to thwarting concept capers. Below is practical and effective advice to consider when protecting what is yours.
1.) Sign an NDA
As the business owner you are entitled to customize the language of the NDA so both you and your co-packer feel confident that this trust is binding and valid. In an e-mail be sure to include - in layman’s terms - what you require on the NDA. For example:
“Please don’t disclose you’re our co-packer if we work together and decline to speak about the fact that we work together.”
“Please don’t share our ideas or recipes with anyone. Our recipes are ours and should be proprietary.”
If there are additional concerns regarding a proprietary or special ingredient while evaluating factories you can leave that ingredient out of the conversation until you know you have found your manufacturing match. It is also a safe practice to utilize an NDA template to save in your files. These can be found on legalzoom.com or we offer one when you sign up for our coaching program. Be sure the language is clear, concise and understandable – it should be easily understood by someone else who does not work with your product daily.
2.) The 3 R's: Relax, Rely, Relationships
Manufacturing is the easy part (wait…what?!). Relax and remember the success of your physical product is YOU. It’s your unique mixture of passion, perspective and a dash of insanity that forces your product vision into reality. Few people will be willing to take the risk or have the energy to sustain the consecutive 80-hour work weeks to do what you do.
Here is a little reality check: any co-packer working in your category is probably already working with the ingredient or trending element you’re hoping to bank your business on. Finding a factory you can rely on to successfully manufacture your product is very likely already successfully managing a similar one for someone else. If they wanted to take your idea it would have already happened – it’s rare to have a completely unique concept.
A contract is only as good as the relationship built upon it. The magical symbiosis between client and co-packer is making money - if you succeed, they succeed and vice versa. Trust in your own judgment and choose a factory that aligns with your goals and values.
3.) Attorney On-Boarding
Your NDA is in place, your product launches and it’s a hit! Mazel Tov! But businesses beware - success is catnip for copy-cats. It is when you realize it’s working that you should invite your attorney to the table so they can make sure things are airtight. It is also recommended to consult an attorney in the earlier stages about patenting possibilities should you have an idea/product name/packaging method that is truly unique.
Tread lightly when playing the attorney card. Be responsible and self-aware enough not to drown your business in litigation. It is not in your best interest to sue people when you are starting out – you will be siphoning your time and money off the company you are trying to make succeed. Manage your insurance efforts responsibly and shrewdly - company reputation and product integrity are paramount.
Building business relationships are not unlike building personal ones: trust, communication and aligned values make it work. First and foremost, focus on what you do best and be the first, strongest and fastest at it. Maintain a place of trust with your partners and know when it’s the appropriate time to increase the levels of protection on your idea. Once the basics are in place the best way to secure your business’s future is making a mind-blowing product, building an identifiable brand and garnering a loyal customer following.
YOUR NEXT STEPS:
Decide if you will need a patent attorney (contact me for a recommendation).
Get a template NDA in place (we give templates to coaching clients or get them on legalzoom.com).
Draft an RFQ without your secret ingredient but describe the processes needed to manufacture.
Ask potential co-packers questions about how they handle privacy.
Choose your factory and trust them.
Focus on building an amazing product, brand and customer following. Sales beats all!
Agree or disagree? We’d love to hear from you! Leave a post below!
Want more? Videos! Watch this video on the same subject: I’m a physical product entrepreneur and vendors OR my co-packers will steal my ideas! Help!
About the author: Emily Page has over 12 years of experience in selling consumer brand products in the food industry with packaging. She is the CEO and founder of Pearl Resourcing (http://pearlresourcing.net), an international packaging and product development company where she has launched multiple 7-figure brands into retail and e-commerce with 2-5x growth in sales. Follow her on LINKEDIN for regular articles and updates: https://www.linkedin.com/in/emilypage/
Graphics by: Kat Reyes, VP of Brand & Marketing at Pearl Resourcing: https://www.linkedin.com/in/kat-reyes-design/.
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