Want To Start A New Company

[TBK]

I have several baits both lead and soft plastic I've designed and am exploring the possibility of having them produced and start a lure company.  I'm kicking tires and turning over rocks to gain as much information as I can.  As with any business venture, there is more than one way to skin a cat but I feel like in the cut throat world of lure making, starting is critical.  My questions are:

 

If I got the route of having someone else pour, what is involved to go from my design to a packed for sale product?

How is the process started?

What are the upfront and long term costs?

How do I insure my designs are protected?

Is there a minimum purchase requirement for something like this?

How do I go about having custom hooks made?

What is the advantage of purchasing my own production equipment vs subbing the pouring out or is there?

 

Thanks for any assistance you can provide.  If you'd rather not post here, my email is brantking@centurylink.net.

 

 

[TroutSupport.com]

Well, I hemmed and hawed at answering this but maybe it will answer some things for those that want to know and save some others the cost of finding out the hard way. There are obviously lots of variables and never any hard numbers...i'll just convey what i've found out for injection molding. If you want the lure to be poured that's altogether different numbers. 

 

If I got the route of having someone else pour (inject), what is involved to go from my design to a packed for sale product?

 

I'll answer this for injection molding...not hand pouring.

You have to have someone draw the part in solidworks or a cad program and have someone produce a production mold.   The production mold has to fit onto a production machine...so you can't just have it done by anyone unless they can get the production machine sizes and location of ports, injection, mounting, ect. typical mold 25 cavity is about 4-6k. The more cavities you have the less the final part will cost for someone else to do. the quote i got looked like I could get my bait done by someone else and package it for about 1 - $2. Maybe as low as .60 cents depending on size of bait.  Retails for $3-5. You still have marketing cost, shipping, business cost, do able but not much room. and also if your selling the bait retail for $5 the retailer will want to buy it for 2.50 - $3. not much room at all. 

 

How is the process started? You jump in ...rear end first....  actually head first if you can help it. 

 

What are the upfront and long term costs? can't cover that one completely but if you have someone else do it there might only be your cost to house the project and any lost opportunity cost of the money you spent... If you do it yourself there will be some maintenance cost. Also, if you do it yourself you may have health cost depending on how well you protect yourself from interaction with chemicals (phthalate, plasticizers, etc.) and fumes. But that will come much later if it does.  Also depends on how much your time is worth.... 

 

How do I insure my designs are protected?

tough question...lots of variables. Only real way to protect it is to invent something that you can get a utility patent on, much harder than meets the eye. Design patents will only protect your specific design. someone can take your idea and shape shift it a little and it wouldn't infringe. It would only stop people from taking your bait and doing a 3d scan and producing a mold... actually it covers a little more than that but not much... the rule for a design patent is that 'to the untrained eye or person' does the infringing part embody the original.  Utility patent is 5-10k + fees for maintenance,  design patent 1-2k no maint fees. 

 

Also, in order to protect it you must have enough money to protect it. There are contingency attorneys but you'd have to prove that their windfall would be very large before a contingency attorney looks at taking the case. 

 

Is there a minimum purchase requirement for something like this? If you mean a minimum production amount for someone to produce your bait,.... yes, more than likely but there are guys, even on this board that will really work with you on getting started like Carolina Mike...has a good reputation for smaller runs and working with his clients. 

 

How do I go about having custom hooks made? That's a little bit different, but still doable... find a hook maker and work with them until you're happy.. it will take a production run of about 10000 units to start probably.  Might consider just using one thats already designed. 

 

What is the advantage of purchasing my own production equipment vs subbing the pouring out or is there?  Advantage here is that you won't be paying for their labor or profit what have you.... but your cost to do that come with a high cost. Injection machines cost in the neighborhood of 12k-20k...  So if you have that kind of money or more then you still have to learn how to use it...but that's probably do able.  I wouldn't invest that sort of coin until you know for sure the market will support that investment. And you may at least want to house it in a separate building from your house if you're going to do that sort of volume... so you may have some cost associated with that as well if you really want to protect your and your families health. 

 

Also, consider the market your entering and your marketing power and depth.. it takes time to build a customer base and an unhappy customer base can kill your business in a heartbeat as well. Even with the internet all sales are still mostly word of mouth. Customers that arn't exactly sure if they are  happy are not don't really sell your product either. But if you have something out of this world, and provide good customer service then you have a chance. There are more than a couple companies that are making it doing it this way. There are probably many many that fail as well. 

 

I hope this helps.. i'm sure others could put in cost if I am way off on something, and I don't mean to scare anyone with numbers...there are certainly creative ways to do it very low cost... and with high personal effort. 

 

Good luck, 

[agarrett]

Very well written TroutSupport. I am a marketing/entrepreneurship major and can only speak to the marketing and legal aspect/protection.

 

It is truly incredibly difficult to protect your ideas in the fishing industry. If it was that easy, there would only be one company making soft plastics and one company making crankbaits. Within days of the A-rigs big debut win, other manufacturers were making their own versions. It was patent pending but they only needed to change a little bit in order for it to be different enough to not infringe. We also don't know Mann's has a design or utility patent application for it either. It's unlikely to be a utility because other versions have been used and it would require a much more dramatic changes to the concept.

 

The only way to bring a new lure design to the market and be successful with it is to either have something that is truly revolutionary like Livingston Lures and get the utility patent (and spend lots of money trying to protect it through legal channels) or to launch that product with enough force that you are able to capture a lot of market share before others are able to duplicate it (kind of like Mann's and the A-rig). The best way to do this is probably going to be licensing your product/design to a larger manufacturer and letting them take it to market for you. They already have the structure in place for a mass launch of a new product. There are legal forms that they can sign to "protect" your idea when pitching it to them. The downside is that the commission on this is typically fairly low.

 

The biggest issue with having a lure company is not being able to create products. Anyone can come up with a design that catches fish and then pay a larger manufacturer to make them for them. The biggest problem is marketing and distribution. Not many companies are able to or know how to do this on a large scale and most companies die locally or at a certain volume of sales because they are unable to create a enough demand (marketing) or handle the shipping and logistics from their own home (distribution). Think about all of the big name soft plastic companies. Then think about the mid sized companies. What are they doing different that got them the name recongnition they have and what sets them apart from the local guy that is starting his own company?  The large companies like Strike King, Yum, and Zoom have market share and name brand recognition they can just keep doing what they have always done. The mid level companies like Poor Boys, Reaction Innovations, and others are emulating what other successful companies are doing (or have done) and are being successful at it. It's not enough to just have something interesting that catches fish, you have to be able to sell it on a large scale to people that may already have brand loyalty with other companies.

 

I'm not trying to deter you from starting a company or launching a product but I did want to share this so that you make sure your timing and method of launching is done correctly. Make sure you have everything in place first so that you can reach your goal. Whether that means launching on your own or with another company. You must make sure that either your product as is will create enough demand or that your marketing will. Then you have to make sure you can handle that demand through manufacturing and distribution. If your idea is the next million dollar idea and you are missing any of these, then it just became someone else's million dollar idea.

 

Hope this helps.

Edited November 19, 2013 by agarrett

[Dumzlures]

I own a manufacturer 

 

If interested, contact me

[carolinamike]

First off, let me clear some things up. A quality large scale production machine will run you somewhere in the neighborhood of $50,000 to $70,000. This piece of equipment has the capabilities of producing 15000-25000 pieces in about 8-10 hours. The cavity count in a mold is just according to the bait. For instance, a straight worm, you may get 60-70 cavities, or a creature bait such as a craw, you may only have 25-35 cavities. The standard production mold is around 30 inches tall. The width depends on the length of the bait. Trout Support is correct in saying that the mold is specifically designed to the injection machine producing the product. Not all machines are the same. It's hard to give an exact cost when it comes to production work without having some information about the particular bait. It's basically based on how many can be produced in an 8 hour period, and the actual weight of the plastic that it takes to fill the mold.

 

Packaging costs will vary, most packers charge per bag of baits at a cost somewhere between .10-.25 per bag. Again this has several variables, it's mainly based on how many packs of baits can be produced per hour.

 

The advantages of having someone else to produce your baits is you have time to do marketing and promoting of product. You don't have employees to worry about as far as production goes. So you basically have time to concentrate on sales. The advantages of producing your own baits are not that great unless you are doing a large amount of baits. Keep in mind when you are running production equipment that most measurements are based on 5 gallons of plastic. You have to have a pretty good knowledge of how plastic flows. Also you have to be pretty mechanically inclined. And you have to have sufficient space for production and storage. Just for a basic setup of 1 machine, you're probably looking at over $100,000 by the time you factor in the machine, the mold or molds, the initial startup material, such as plastic, coloring, flake. Also you're going to have to have a cooling rack, a 7-10 HP air compressor, sufficient electrical capacity to run everything, also sufficient space for scrap storage and you will also need a sufficient cooling system.

 

The starting point for the production of a plastic bait will be to contact a mold maker, no need for a middleman to do any kind of CAD work or drawing, the moldmakers will work directly with you and do this type of work for you. Just remember everyone that you involve in this is another person you're paying. There's really only 2 companies right now producing production molds. Which are Zorn and Basstackle. Mold costs are going to average anywhere from $5,000 to as much as $15,000. It's just according to what all you want in the bait. Keep in mind the mold delegates all aspects of the baits, such as laminates and two colored tails. The machine just basically pushes plastic. I think you can trust these two moldmakers not to reproduce your product for someone else. And they both will be glad to sign legal documents to ensure this. But the bigger companies do have ways around things. So a patent is a must to ensure full protection. Most folks that can't afford to go the patent route make sure that they have sufficient production or inventory so if the bait takes off big, they can meet all demand. This really doesn't protect you from being copied, but it does establish your place in the market, and will build you a loyal customer base. Yamamoto's Senko is a prime example of this. There's a bunch of stick baits on the market, but there are those guys out there that are only going to use Yamamoto's Senko. The bait business is nothing to be taken lightly, it is very very competitive and very cutthroat. Also one thing I forgot to mention, if you do your own production work, you will be responsible for a 10% quarterly Federal Excise tax, but you're paying this tax whether you produce it or whether I produce it, or another injector. And by the way all injection companies have a minimum production run, including me. I've recently had to restructure due to scheduling, so I won't do anything less than a 4 hour (half day) run. All your other injection companies require an 8 hour (full day) run per color. Reason being, if someone comes in in the evening, and sets the equipment up for the next days run, then all the operator does is come to work and produce the product. We are currently the only company I know of that will actually change colors in the middle of the day. Even though this post is long there's still some more details. Feel free to call me and I'll be glad to answer any questions that I can. And I'll even give you names of other injectors besides myself. My contact information is listed on my profile. I hope this helps you have an idea of how the process works.

[Smallie]

<snip>The bait business is nothing to be taken lightly, it is very very competitive

and very cutthroat.<snip>

 

X10

[fishon-son]

don't waste your time..sell local pour or inject your own baits get that local market first...a good friend has been doing it for years and has southern Michigan tackle shops buying all the time..come spring he is on the road all the time...all hand poured or injected  had all his molds made local ...tubes are number one for him....and everybody makes tubes...every shop around lk.st.clair sells his baits...good luck

[pqf123]

Awesome information from all - escpecially Carolina Mike and fishon-son.  Two great takes on what to do.  My brother and I have a small - very small - bait company that we would like to take to the "next level".  What do we do?  We cannot afford to protect the ideas, let alone have Zorn or Bass Tackle make commercial capacity molds.  Then, to either buy the equipment, or have Carolina Mike shoot the baits for us, we can't afford either - as generous as the 1/2-day per color run is, we just can't do it yet.  We have a strong local tackle shop/club following, I hate to scrap the idea of offering the baits nationwide, especially based on the local response, but they are labor intensive with the molds we have,  2-4 processes per bait, just for 1 hula type grub - not including labeling & packaging!  Even with more molds, our capacity would not increase at the cavity capacity rate - if that makes sense. 

 

We are currently supplying our local(state) shops/tournament guys, as fishon-son suggests.  Just trying to figure out if it's worth pur

suing. 

Edited March 5, 2014 by pqf123

[fishon-son]

I mostly get new people just by fishing where others fish from shore.talking to other people and fishing with them works wonders..get a logo and some business cards...drop some on the display racks at stores..like dicks,bass pro,cabelas  and so on...yea some managers might call but so what..i sell to them to...lol....be creative..dont go for the million dollar contract..word of mouth works best....I over pack my bags like I cant count..don't be afraid to give out a few samples...I once gave a guy a kvd square bill crankbait I was fishing with and killing the bass on..he was in a tournament and I wasn't..he asked what I was using .I told him he didn't have one I had many..i came along side flipped a new one in his boat and a card...ive sold over 300 bucks worth to him the next week and now sell to all of his fishing buddys in his club..i like it small..and cash works best........don't think big...your small......if you good a few hundred grand to spend then go big...I sell to make my boat payment  and it works for me......

[texacan84]

This is some good advice guys, thanks. I'm in the process of trying to start a very small bait business, not looking to go global...lol.. I hand open pour all my baits, some I have designed on my own. It has taken 2 years to get this far. Lots of free samples to family and friends is starting to pay off. I started a Facebook page called Houston's Lures. The first night I put it on there, I had a guy order 300 lures from me, caught me by surprise. Have a couple of other interests but waiting on the official phone call. I'm kinda limited on the baits I have and hoping to expand in the near future. It is very labor intensive but I love doing it. Still trying to get a logo, business cards, and labels. Not looking to get rich at it but just enough to pay for material and a little time I have in it as well.

Well enough of my rambling..lol.. Never the less it's all good advice and I thank you for it.

[Munkin]

I have spent a lot of time looking into this and right now I am just waiting to have the time to dedicate to launching a business. My plan is to have carolinamike shoot the soft plastic baits for me after speaking to him. His manufacturing capacity is something that cannot be matched by me pouring baits in my basement. Even though we have not yet started our business relationship I highly recommend if you are looking to have baits produced to contact him. He spent a lot of time educating me on what I would need to do and my options which I really appreciate. Now I just need to finish college so I can dedicate the time needed to get this thing off the ground.

 

Allen