There is a secret to the epic success of Bill Gates’ Microsoft corporation and it has nothing to do with being in the right place at the right time, unparalleled intellect, or computers!

Many critics will wonder what William H. Gates III is doing on a list of the greatest innovators of the last 75 years. The world’s largest software company is often accused of piggybacking on the innovations of others rather than inventing itself. It’s even accused of using its market clout to suppress creations from rivals.

Still, Gates deserves to be counted as a great American innovator – just of a different sort. More than anyone else, he can be credited with turning the disorganized PC tribes of the late 1970s into today’s huge industry. Gates was among the first to recognize that all sorts of companies and products would be created if a computer’s operating system and all the other software programs were separated from the hardware. The insight liberated innovation. Anyone, anywhere could concoct new technologies, not just the engineers working on a new computer. “That was a doozy,” Gates says. “We allowed there to be massive innovation on the hardware side and massive innovation on the software side.”

Just as crucial, Gates understood the importance of ‘owning’ the dominant operating system in this emerging industry. His moment of truth came in the summer of 1980, when IBM (IBM ), in a rush to produce a PC quickly, was looking for another company to supply it with an operating system. Gates provided it and persuaded IBM to allow him to license the operating system to other computer makers, a move that both expanded the market exponentially and created a standardized platform for other companies to build upon. “He’s always thinking about the competitive chess moves he has to make to make his products more successful,” says Paul G. Allen, Gates’s boyhood friend who founded Microsoft with him. “I don’t know if anybody else back then had as broad a vision of what could be accomplished or that kind of competitive juice.”

Now, Gates is at the point in his life where his legacy is beginning to take shape. He’s certain to be remembered for the billions he amassed on his way to becoming the world’s wealthiest man … and the secret to his success?

Licensing … And how you can leverage it’s power today …

How it All Began for Me

“Most people are too busy earning a living to make any money!”

This is definitely true, particularly if you are a salaried individual. This is often the case even with people who are self-employed, more so if they charge by the hour, or perform some tasks wherein they are paid a standard fee for the work.

This was the story of events in my life, just a few short years ago and how I discovered the secret of Licensing; a secret leveraged by many of The World’s Masters of Wealth.

At 27, I was spending about 70 hours every week at work. This included weekends as well and also a couple of nights every week when I got home not before 3 in the morning. Although you could say that I was earning a decent living for someone my age; like a lot of others, there was not much money left over after the mortgage had been paid and all the other day-to-day expenses were taken care of.

I was certain that there was a better way; the only problem was I didn’t know what. Watching a lot of advertisements about promising ‘get rich quick’ schemes, I even tried a few of them, but unfortunately not a single one lived up to its exaggerated promises. I even stuffed my garage with costly stocks of cleaning supplies through those pyramid selling plans, which were so famous some years back.

And just like that, one fine day, I came upon something that was the break I’d been searching for all this time. Like a lot of great business ideas, this is a straightforward idea; but unlike many schemes, it doesn’t require you to purchase large stocks or work an entire day to earn good money.

Much of our business now revolves around Licensing but back then, on average, I only worked 2-3 hours per week developing it, and for every 10 items that I handled, I’d make as much as I was earning on my full time business.

So, what do I do exactly?

I obtain the select rights for distribution of any item from its maker, and then I simply sell that right to another person.

Let me start by telling you how it all began, and then you’ll know that there is no lack of prospects here, and how you too can make this idea work for you by utilising your own knowledge. My very first idea was linked to the catering business, but you will come up with various other ideas that are connected to your existing line of work. You should put your ideas down on paper as soon as they enter your head – never let a good thought slip away!

Here’s how it all came together …

My entire working life, at the time, revolved around the food industry as I owned my own outside catering business and also ran a nice little sandwich deli of my own. In my sandwich shop, we would prepare different sandwich fillings everyday and then display the fillings in chilled units for our customers to choose from. I thought the visual display needed to be spiced up a little, so I would spend hours carving tomato roses, and swans from lemons to create a nice and attractive finishing touch to the visual display.

The only problem was that the carvings would last just two days at the most and I’d have to spend hours recreating them. Thus, every second day, I’d waste a lot of time making the carvings. Not exactly waste, but you get the gist.

This got me thinking that perhaps there must be someone who could supply them pre-prepared so that my time could be better utilised elsewhere.

I called up all the catering suppliers that I could find and asked them if they could help me with my requirements. All of them had the same two things to tell me: none of them had pre-prepared food carvings, but all of them agreed that it was a super idea and hoped they were obtainable.

I was losing patience and preparing to give up. Then one day, at a friend’s place, I happened to notice some pre-prepared ornamental food carvings which my friend had got back from a trip to the Far East as a souvenir for his kids. The only problem was they were plastic and I thought that would detract from the quality image I was trying to portray in the shop. But when I saw the product in my hand they were so lifelike they were perfect …

My friend gave me the number of the place where he picked them up and I called up the given number, which was one in the Far East.

“Hi, may I be of assistance?” an Oriental woman enquired.

“Hello, I’m calling from England”, I replied. “Could you inform me who your supplier is over here”

“I’m sorry; we do not have a supplier in England.”

“Oh, alright”, I said. “Could you let me know who you have supplied to in the United Kingdom or Europe?”

Once again, “I’m sorry; we have never supplied to anybody outside the Far East.”

At that moment, the thought came to me.

“Would you be willing to let me have the exclusive UK rights to sell your merchandise?” I enquired.

She answered, “Sure!”

“Would you also be willing to let me have the exclusive European rights too?” I enquired.

Once again, the same answer: “Sure!!”

To be honest, I had no notion of what to do after that, but I intuitively knew that I had something great on hand. I had chanced upon such an item that was not to be had anywhere in all of UK and Europe, and I would soon have the exclusive rights to the product. Just the thought had me so keyed up that I was even ready to foot the expenses for drawing up the legal papers and importing them from the Far East.

I’ve learnt my lesson about that. But I do know that trying to obtain the solitary rights to an item is not preposterous, even though it may sound that way. You’re essentially telling the other person that you think their product is good. Nobody would ever be affronted by that, and they sure are not going to turn their noses up at the thought of having an entire new market for their goods. Any foreign business would spend thousands of pounds to start a European branch, and here you are – doing it practically for free!

Since you are already based here, it would be very easy for you to build the required contacts, which the company would find quite hard to do.

So, that’s what I started to do – build those contacts. I called up all the catering suppliers I had spoken to earlier, and they all were thrilled to know that the item I was looking for before would now be obtainable. And then came the bolt from the blue – they needed me to stock a warehouse full of goods, so that the product would be available as and when the need arose. This meant that I would need to get an entire load of pre-prepared ornamental, carved display foods, spend money on storing them, some more money to insure the goods, and then distribute them; all of which would cost me thousands of pounds! This was certainly not what I wanted!

After this, I decided to approach a producer of other types of table and unit displays. Their Sales and Marketing department was quite excited. They enquired whether I could give them sole rights to the product, in return for which they were prepared to pay me a royalty. This got me really excited and then the CEO of the company burst my bubble.

According to him, the plastic food carvings would be competing with his current range of table display products. With plastic ornamental food carvings on the scene, people would not use his products, thus decreasing his sales. “Thanks, but we’ll pass” was his decision.

Here I learned an important lesson. Any new item should not decrease sales of present goods, but add to them, thereby providing users a wider selection.

I discussed my dilemma with a customer, and he told me, “Get in touch with the main source of distribution for catering accessories.”

“And who would that be?” I inquired.

“Those who produce the real goods – bigger food carvings and ice carvings”, he said.

Initially, I thought it was not a very great idea. Obviously, if they had the marketplace cornered with bigger food carvings and ice carvings, they would probably not be fascinated at the idea of an alternative. But then it struck me that my product was not an alternative. I had small plastic food carving displays, which would perfectly complement the bigger ones. Thus, I grabbed the Yellow Pages and called up the first number.

I talked to the Top Man and he was so thrilled with my idea that he hopped on to an airplane the very next morning and met with me. By the end of the day, we had reached an agreement wherein he would pay me a royalty on whatever sales of the pre-prepared ornamental food carvings he managed sell, and I left with a cheque in my pocket. Yes, there were some formalities to complete and loose ends to tie up, but that was just a little administrative work. The deal was on!

From then, till now, I have obtained and re-sold the sole rights of various other goods such as:

  • A product for gift wrapping presents in balloons
  • A device for keeping open bin bags
  • A collapsible bin
  • A series of novelty door knobs
  • Vending machines
  • A device for rocking babies to sleep
  • A bracket for holding paint tins on ladders

By reading all this, you are probably realising that here’s an idea which may work well for you too. You may have, in all likelihood, even come up with some possible ideas about goods that you can handle. Even if you haven’t, worry not. That’s what I’m going to do – educate you about how to search for goods and products, and come up with ideas, which will enable you to strike your own deals and earn handsome royalties. And they don’t have to be physical products – I now hold licences to distribute many digital, information products on the Internet.

*The Appendix has a few sample agreements, which can be altered as per your individual needs.

Generating Ideas

So, how exactly are you going come up with goods which will help to strike up royalty creating deals? Here are some useful suggestions:

  • The products should preferably be manufactured in a foreign country and not available in your own.
  • The goods should enhance products already available in your country.
  • They must be in keeping with safety guidelines.
  • They should work with regular equipment already available (for instance, electrical goods).
  • They should be connected to a field which you are knowledgeable about. (But this is not always the case).

There are a couple of methods to locate actual goods. One way is to start thinking and come up with a list of some products that you have often wanted, but never found. You can rack your own brains and also ask others who may have decent ideas. Once you have thought of a few such products, you go searching for them. The second way is to find some unusual products, and see if anything of the kind is available here.

Now you probably have a better idea why the last suggestion advises you to work with products related to an area which you know about. Else, what appears to be an awesome idea to you may well be ‘old hat’ to the very people you think will go for it.

Utilize your work experience:

  • There may have been some occasions when you hoped you had a particular product, which could make work a lot simpler.
  • Are you a salesperson? Maybe you require some items to help manage your brochures better; or perhaps some product that dispenses samples at the flick of a switch.
  • Do you often find yourself in dim areas? Maybe you could do with a small torch attached to a headgear that could be charged using your car battery.
  • Do you use your hands a lot? Possibly you have often wished for an added pair, or some product that could accommodate different things while you worked on them.
  • Does your work involve a lot of driving? Perhaps you need something to help keep the back of your footwear dirt-free, or a product to keep cash to pay for tolls, within reach?

Try to conjure up every amazing device that you’ve seen people utilizing in their line of business – the sonic measuring tape, the wet meter, the lighted screwdriver – all of these are the product of someone’s great imagination.

Look around your house or use your hobby:

Similar to work, there are often times when you may have hoped you had some device to make your housework easier. Take a look at some things that are already available. Do they bring to mind any products which would be indispensable 5 years from now, on which you can get good royalty?

  • Kitchen gadgets: the fizz-saver for drinks, synthetic ‘bears paws’ for picking up meat, mechanical bread makers etc.
  • Bathroom products: water-resistant headrests, toothpaste vending device, plaque removers.
  • Around the drawing room: ‘lava’ lights, sand photos, trays that affix to chair arms, scent atomizer
  • In your work-area: screwdrivers that can be re-charged, automatic drill chuck.
  • Garden things: ‘plug’ sectioned seed trays, roll-out pathways, click-fit watering mechanism etc.
  • Pet products: extendable dog chains, the vacuum brush, a tick collar.
  • Sporty items: training shoes purse, the golf-tee that self-adapts, low-priced fitness equipment.

Hear what others are saying:

When you speak to others about their work and hobbies, you will repeatedly notice that people impulsively tell others about how they wish they could purchase certain things. If they are aware that you are connected to the import of such items, in all likelihood, people will tell you what they want. And even if they don’t, you should come right out and ask them. People will rarely think that they can source these things on their own.

If you or your friends and family, on trips abroad, have ever happened to come across certain things that people use there, or which are available in foreign shops, then this could be a great area for new ideas. For example, the small metal clasps that outdoor eateries Utilize to hold down their table cloths, which could come quite handy at barbecues; the plastic fasteners which clip to dish-cloths and clasp onto a ring; the trendy wicker furniture from Thailand, which could look awesome in conservatories etc. Whatever such products you come across on foreign trips, which are not seen here, would do. In fact, taking a day-trip to France and scouring the hypermarkets for inimitable, unusual products may not be such a bad idea after all!

Study trade journals:

Trade journals are an exceptional supply of information. These may not help you find items to deal in, as the goods are already available in your country. How this does help however, is in the elimination process so that you do not end up handling goods that are already available and thus not exclusive. By having knowledge about what is available, you can better judge where to fit in your unusual goods. It may even inspire you to come up with related products to look for.

For example, in the catering industry, sanitation requirements have resulted in a colour coding system for chopping boards and cutting knives. Chopping boards carry a coloured dot, and the grips of knives are coloured, so that chefs do not use the same knives for raw meat, which are meant for cooked meat on a board which is to be used for dairy products only. Such colour coding could work for which other products? Is it likely that home cooks and commercial chefs would use them if their packing was attractive? Could such a colour coding scheme be used for other DIY tools as well?

Apply creative lateral thinking:

If you aren’t finding it easy to come up with fresh ideas from existing ones, attempt the exercise of conjuring up different uses for a common, everyday item. The item that is mostly used in this exercise is a brick. Majority of the people can think of various uses, but essentially, there are only two – using the brick as a building material (for e.g. making walls, pathways etc), or as a weapon (for e.g. to throw at retailers windows, knock someone’s head with etc).

But those who actually tax their minds, and who think apart from the obvious (lateral thinking), are the ones who really come up with fresh ideas and unique uses such as: brick door stopper, ashtray, holder for matches, match striker, using bricks as steps in a ladder, vehicle jack, ruler, tyre wedge, feet warmer (after a little time in the oven), paperweight, added in the toilet cistern and used as a water saver, stand for cooking dishes, animal hobble (with a rope or cord), stepper for exercising … can you come up with some more?

Undertake the same exercise with different items and check what you wind up with.

Are any of the ideas any good?

Making the effort to work out a deal with a product maker isn’t going to do you any good, if the product is not going to be wanted. It could get worse if you actually made the effort to locate someone to carry your products, and then realised there were no buyers for it! That won’t earn you any money, nor any friends.

You thus have to evaluate each product that catches your fancy, with regards to its marketability. Simply because an item enjoys tremendous sales where it is made, does not essentially indicate it will do well here too. Some items that I have mulled over, and rejected, were a collection of bow-ties and cummerbunds in one-of-a-kind designs, and even a device for printing photos on dinner shirts. Although they sell a lot in the US, they don’t in UK. Why is that?

Because of the fact that, men’s evening attire market in the UK is quite traditionalist. Perhaps more than 75% of dinner suits are worn to Masonic dinners, where any attire except a black tie and a plain white shirt, is frowned upon.

I have even discarded the idea of a type of computer software for self-hypnosis, as I foresaw various kinds of legal problems; and a crossword puzzle book, in which every square had to be scratched to disclose the letters beneath. It appears that people would rather write using a pen.

Perhaps a sure fire way to evaluate whether or not a certain item will sell is to go through the initial process of trying to sell it to the wholesale merchants. Here, I’d like to give you a few words of caution: NEVER, UNDER ANY CONDITIONS, DISCLOSE TO THE WHOLESALERS WHERE YOU OBTAINED THE PRODUCT FROM.

Don’t mention who the manufacturer is, which country it originates from, how you came by the item, and don’t even mention any other goods that the manufacturer produces.

If you let this information slip, the wholesale merchants can go right to the source and cut you out – which most WILL do. If they enquire where the item is from, tell them you aren’t ready to part with that information till such time that an agreement has been signed. It would even do to imply that you are just about to sign the contract for exclusive rights with the maker.

It’s really a positive indication if they attempt to get this information from you. They wouldn’t try if they didn’t believe the product to be feasible for their market. Contact at least 6 different wholesalers in various regions of the country/county, and check whether all of them have a similar reaction.

If anyone is not excited about the item, ask their opinion about why the item won’t sell, and then evaluate the answers. If all but one say Yes, you must keep an eye out for the one who said No, as he might have said that to discourage you, and may well be planning to do it himself. Do you still remember that first table and unit display maker, who said No to my ornamental plastic food carvings? Well, the thing is, he has recently announced his own line of pre-prepared food carvings. Perhaps I’m suspicious without reason, and he’s simply trying to profit from the market I created. Then again, perhaps I’m not.

Internet Ideas:

If your creating an internet product do a search on Google Keyword Planner to see how often it’s searched for.

There are hundreds of niches you probably didn’t even know existed that are searched for every day and there are products that you’d expect to see hunted down with surprisingly few searches.

Have a plan of action:

  • Prepare a list of the various items that you’ve always wanted but could not locate in the stores.
  • Enquire of your friends what stuff they’ve always sought but could never find.
  • Study as many trade journals you can lay your hands on.
  • Start speaking with wholesalers.

Locating Suppliers

If you wish to find a certain item that you’ve thought of, or you simply want to know what’s out there, you have to start by finding some likely product manufacturers. I get a host of products from the US and Asia and have built up solid contacts there, but the entire universe can be your arena. As I said earlier, launching a foreign operation is very costly for any producer. The further they are from their target market, the more difficult it is for them, particularly if English is not their native tongue.

Foreign languages do not have to be a barrier for you. You can correspond with your manufacturers through letters and faxes, and the Chamber of Commerce in your area will assist you with any required translations. This may not even prove to be necessary as English is now used widely in global business.

You may believe that you can find goods manufacturers by going to wholesalers and seeing who produces items that are akin to what you’re searching. Although you can get a general idea of items from wholesalers, and you may even determine how well different products do; it is my understanding that majority of the wholesalers are far too shrewd to disclose where they source their goods from. In fact, they even remove all the labels from their items so you can’t find out on your own. To find wholesalers, look in the Yellow Pages, or in Wholesaler magazines – a good UK magazine called ‘The Trader’. This magazine gives you access to interesting ads which will help you determine what all is available.

Your closest City library, which can offer you directories on global trade, can be your direct method to find manufacturers. I always take the librarians into confidence and they then assist me to find the correct directories. The key information to unearth is which countries produce the kind of merchandise you are fascinated with.

With this information in hand, your next step is to dispatch a letter to the Commercial Department at the London Embassy of your selected nation (or equivalent trade body in your country, such as The Chamber of Commerce) . You can use one of two approaches in your letter. The first one is to tell them that you wish to import certain types of goods and would like the contact details of manufacturers of such goods. On doing so, you will get a horde of brochures in your mail. The trouble with this plan is that the manufacturers generally want you to import the merchandise on your own; or work as their regional agent, which entails making clients and delivering the orders to the manufacturer.

Thus, the second approach, which I also use, seems to be the smarter choice. I request the Embassy to provide me with a listing of all the trade magazines that are related to the goods I am interested in. I even request the British trade journals to give me information about their foreign equivalents. When I have a list of these magazines, I contact them and request a sample copy and subscription details to be Air Mailed to me.

On studying the samples provided, I determine which has the maximum usefulness, and then subscribe to that publication for an entire year. If you pay through your credit card, you neither have to concern yourself with exchange rates, nor have to pay bank charges for a non-pound cheque. Although you can locate these publications through trade directories; in order to get the most up to date information, you are advised to contact the Embassies.

Similar to British trade journals, these journals too have various adverts and also a ‘What’s New’ segment. From here you can get the details about the manufacturers that you seek. From here, you do as I did – you call up the manufacturers and enquire who they supply to in UK (or your country), and the rest as they say … You might need to speak with their Export unit or their Sales and Promotion department.

As I mentioned previously, if language is a problem on the phone, simply email them a letter instead.

Gauge the time difference prior to placing your call. The American East Coast is about 6 hours behind UK time, whereas the West Coast is about 9 hours behind us. In Europe, areas that lie east from Denmark to Tunisia, are a minimum of 1 hour ahead of UK time. All these countries employ the ‘daylight saving’ hours system, wherein their work day begins at 8am in place of our 9am.

When you call, be ready for them to ask about you (where you’re from, what you want etc). Not many ask, but you need to be prepared just in case. I generally circumvent any such queries by telling them that “I have the exclusive rights to various items like theirs, and wish to add their item to my range to expand it.”

The next chapter provides information about settling deals with the makers, but before that, a novel method to find great merchandise.

The Wonderful World of the Internet:

You’ve surely heard of the internet!

I for one, use it on a daily basis. I have global connections and I chat with my contacts frequently through e-mail. I am also a member of various websites which have excellent information sharing forums (chat groups). The forums on ‘New Ideas and Innovative Inventions’ usually provide new information from people who wish to sell new goods. You even get the latest news, have access to advertisement columns, and can participate in ‘CB simulators’, which are live discussion forums.

Just a few minutes on these forums can give you excellent marketing ideas as well as fresh new products for sale. Some of the ideas may not be novel to you, but there will be plenty that are and these could help you make your fortune.

Do a Google! (or Yahoo!)

Global Sources is a fantastic resource I have used for years – it costs but well worth it … alternatively try Alibaba

About Trade Exhibitions:

I visit trade fairs every chance I get. One more advantage of finding those trade publications that I mentioned previously is because the trade fairs are promoted in them. I tried to avoid British trade shows because even if I was to find some promising products, there is a good chance others will too. And what I needed was to discover items before others found them; which is why, the minute I could afford to go abroad, I started visiting trade shows in foreign countries and discovered many new products and suppliers.

If you do not have the means to visit the trade fair, you should at least call the fair organisers. Let them know how sorry you are to have missed the chance to attend the fair in person, due to prior commitments, and request them to send you a copy of the fair brochure. Rarely do they say no, and you get the contact details about all the booth holders.

Lastly …

Before I forget to say this – when you have located the perfect item, and found its manufacturers, please see to it that they are the exclusive makers of that product.