Our small company has been in business for the last 17 years and during that time, apart from our regular work for specific customers, we have also designed, produced and sold some specialised electronic products, mainly into the U.K. police and security market.
To date few of our products have sold in large numbers (>100 units) because each has been designed to meet a very specific application where no other suitable product is readily available. They are usually hand-built in small batches as and when orders for them are received.
We have recently been approached by a large U.K. company who is most interested in one particular product of ours and wishes to discuss integrating it into a much larger electronic system that they intend to produce and market worldwide. We've not encountered this business situation before so we are looking for some advice about how best to deal with it.
Two ways of proceeding immediately spring to mind, but I'm sure that there are other, maybe better, ways also. I'm currently considering either :-
(a) Trying to retain all of the design rights and just adapting our product (mechanically and electrically if necessary) to suit their requirements and selling it to them on a per unit basis.
(b) Offering to sell the company our entire design and negotiating for them to give us commission on every unit that they sell.
I'd really like to take full advantage of this possible opportunity for our design to be sold to a much larger market providing that we can negotiate a satisfactory business arrangement.
Any suggestions, warnings, or other advice from anyone in this NG about the best way for us to proceed and the possible pitfalls, will be very much appreciated.
TIA - Dave.
David C.Chapman - Chartered Engineer. FIET. ( snipped-for-privacy@minda.co.uk)
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