Re: How to get into the aftermarket business
This is not a short topic, but I'll try to keep my response short anyway.
There are only a few options, as you know:
1- License it to an established manufacturer
2- Pay someone to make a prototype(s), and then pay to have a low volume run made.
3- Manufacture it yourself
To have a licensee make it works best for a mass-market product, otherwise it is not very lucrative for either licensee or licensor. There is a large up front investment they need to make to get a design that not only works in its eventual use, but also works for the manufacturing process, be it injection molding, sand casting, forging or billet machining. Specialized molds or tool dies must be made. Once that is done, the large scale manufacturer can produce most things cheaper than anyone else, but only after enough units are sold to amortize the upfront cost. If you have a product that has the real potential to sell 100,000 units or more per year, you might consider it. A racing product generally doesn't have that many potential customers, unless it can also be used on street cars.
The good news is that we live in time when rapid prototyping and CNC production is increasingly common. There are companies that do one-off and low volume production of complete transmissions, cases, cylinder head and block cores, turbocharger impellers, exhaust systems, you name it. Many of these companies advertise in trade journals, such as Race Engine Technology magazine, or have displays at SEMA or PRI. They can be costly as well, but not so much as #1. Plus, you will receive all of the sale proceeds, not just your royalty.
Making some or all of the product yourself is more feasible than ever before. Software is available to turn your model or CAD drawing into a 3-D design file that can be used by a CNC machine or a 3-D printer to create a prototype. You can buy the production equipment yourself, or pay someone to run it for you. For pieces smaller than a loaf of bread, the equipment cost can as low as 4-figures.
I recommend a book entitled "Makers- The New Industrial Revolution" by Chris Anderson. From this you will find sources for scanners, for free apps that can change photos on your iPhone into a 3-D file, and for desktop 3-D printers. A few of the companies that make the desktop printers also make larger scale machines, some of which can print aluminum or steel.
The book also paints an optimistic picture for the future of manufacturing in the United States, worthwhile for that alone.
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Tony Curcio 1860 STK
Last edited by Tony Curcio; 01-01-2013 at 03:48 PM.
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