Jameco: Design an electronics project, well kit it and pay you a royalty
Bob Lawrence (VE1RLL)
Posts: 1,720
http://www.clubjameco.com/?sp_rid=MTgyNDYxMjc5NzAS1&sp_mid=4078812
We think this is a pretty big deal, so Ill get right to the point. Design an electronics project, well kit it and pay you a royalty every time it sells!
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We think this is a pretty big deal, so Ill get right to the point. Design an electronics project, well kit it and pay you a royalty every time it sells!
ClubJameco.com is our new website where you can turn your bright ideas and electronics skills into cash.
It couldnt be easier:
1. Come up with a great electronics project
2. Identify the components for the kit
3. Write step-by-step instructions
Thats it! Jameco will source it, build it and sell it and pay you a royalty on every sale!
Go to ClubJameco.com to get all the details. But wait, theres more! Register for free and activate your account by May 17, 2012, and we'll email you a coupon code good for a 10% discount on your next order!* Every project starts with a brilliant idea. Whats yours?
Regards,
Greg Harris
Vice President, Marketing
Jameco Electronics
Greg@Jameco.com*This code will be sent to you on May 18 and is valid for one-time use, cannot be combined with any other offer and is limited to orders for stocked products that can ship by June 15, 2012.
Jameco Electronics | [URL="tel:1-800-831-4242"]1-800-831-4242[/URL] | 1355 Shoreway Road, Belmont, CA 94002 | USA1. Come up with a great electronics project
2. Identify the components for the kit
3. Write step-by-step instructions
Thats it! Jameco will source it, build it and sell it and pay you a royalty on every sale!
Go to ClubJameco.com to get all the details. But wait, theres more! Register for free and activate your account by May 17, 2012, and we'll email you a coupon code good for a 10% discount on your next order!* Every project starts with a brilliant idea. Whats yours?
Regards,
Greg Harris
Vice President, Marketing
Jameco Electronics
Greg@Jameco.com*This code will be sent to you on May 18 and is valid for one-time use, cannot be combined with any other offer and is limited to orders for stocked products that can ship by June 15, 2012.
We are careful with our e-mail communications and try to only bring you important information and updates.
If you prefer to remove your name from our mailing list, you can do so at any time.
Click here to unsubscribe. We just hope you wont!
Comments
The designer retains 100% ownership (meaningless under these terms) but Jameco has a worldwide, exclusive, perpetual, irrevocable license to the product effective upon submission to Jameco for review.
http://www.clubjameco.com/index.php/contents/view/34
IMO it's a really nasty legal agreement and furthermore it looks to be a IP vacuum machine. All it takes is for you to submit your idea and viola Jameco owns it even if they don't use it. And say you go on later to market and sell the kit on your own - BOOM!! here come the lawyers from Jameco to sue you into the poor house.
No thank you.
Besides why use them when you can come up with a kit and have AdaFruit or Sparkfun sell it for you.
Gadget Gangster made it clear that you had the right to sell elsewhere or pull your product whenever you desired.
Unfortunately they are going a different direction now and only deal with a certain type of kit.
-Phil
unfortunately not enough to have kept heathkit around outside of ebay........ And it was good stuff. My original DMM I built in 1979 while in the service only just died due to the LCDs aging out....... 33+ years of good service.......
ff
Such wonderful acronyms and phrases as only the Navy could teach one. I think BOHICA would be very appropriate for this agreement. Seems that ownership implies control over the property in question. If you stop reading at 100% ownership, well, BOHICA. If you have no control over the (non)use of a product, then you don't really own it anymore do you? You can not terminate the agreement. EVER. You can't license it to anyone else. EVER. Worst of all they get all the goodies and if you overlooked or were unaware of say an infringement, you get the cost of defending it and paying the judgement if any; not (of course) JameCo, need I say once again? BOHICA!!!!!!!!!!
Frank
And yet, look at the percentages you get IF the item actually sells. 5% to start and up to 10%.
"worldwide, exclusive, perpetual, irrevocable"
If it is worth bringing to market, DIY and reap all the rewards.
The negated terms (you own 100% of the concept but you can't ever use it) shows they gave a lot of thought to their rights. And I'll leave the statement to that.
I'm sure they'll get some submissions from amateurs, but any serious designer doing interesting stuff just won't be inclined. This seems like more of a social media event than a way to get new product. Trouble is, they risk ridicule in the social media they're trying to exploit by having such lopsided terms.
-- Gordon
IP in the tech world is FUBAR .
Again, a lot of projects like Servo mag's LED christmas tree (green tree shaped PCB with flashing LEDs), or Parallax's "learn to solder" S2 kit, are quite popular and might be good sellers. Not pushing the state of the art, not patentable, but good enough to sell with beginner appeal to the DIY crowd.
Wow. Erco's suddenly defending kits? What kind of topsy-turvy world to we live in?
4. Royalty
Designer shall receive a Royalty for each Kit/Project Design sold by Jameco as follows:
Quarterly Kit/Project Design Sales Royalty Payment
_____________________________________________________
First $200 in sales each quarter = 5% of Net Sales
Sales above $200 and up to $500 each quarter = 8% of Net Sales
Sales above $500 each quarter = 10% of Net Sales
The problem is that Jameco owns all rights to the product. They are the only ones that can do anything with the product, forever.
If they removed the "exclusive" part or reduced it's term to a year or two, then that would be palatable.
Doesn't work that way anymore.
I understand Jameco's desire to protect any investment in the kits they've already assembled, should you suddenly decide you don't want them to sell it any more. But the usual wording is you give them the opportunity to deplete their stock first.
Again, I think this was more for making news via social media networks than actually selling someone's circuit. Looks like they made some news for themselves.
-- Gordon
Greg Harris
www.ClubJameco.com
Greg@ClubJameco.com
It is confusing.
The Project Brief and Project Design pretty well describe the design don't they? If Jameco has exclusive rights to that then how can the designer sell the design to someone else too? What is left of the design that Jameco does not have the exclusive rights to?
This is good.
It still reads as if it conflicts with other parts but since it is included in the agreement it would put my mind at ease, mostly.
At any rate, the agreement should be clear enough that the designer does not feel that a lawyer is needed to translate.
That's actually a pretty decent royalty rate. A lot of consumer product companies pay 5-8% royalty to an inventor for an outside submission. Those companies take all the financial risk and legal liability and do the sales, marketing, purchasing, and distribution; their percentage reflects that significant part of the business. Sure, you can DIY and take all the risk and rewards if you're supremely confident, but just like Vegas, there is a lot of luck involved. I personally know a lot of very smart inventors with great ideas. Sometimes they'll go it alone, but their success rate is well under 5%. In this recession, most inventors are happy to sell their idea to a company for 5-10%, which lets them get back to inventing, which is what they do best.
BTW, GE pays a jokingly small one-time honorarium, $1000 or less, but never a royalty. Some big companies won't accept outside ideas at all.
FWIW, if you want to get rich from an idea, don't think about a single-purchase product. That's so last millenium. Think about a service that people subscribe to and pay monthly fees. Internet provider, cable TV, utilities, service contracts, even medical care. Doctors don't heal anymore, they prescribe multiple medications for the rest of your life. "Ask your doctor how Lunesta can improve YOUR life!" Mark my words, soon there will be a cable channel dedicated to "life-improvong" medications 24/7. 60% of its time will be mentioning the many side effects. Dry mouth, depression, nausea, convulsions, etc.
But if I may, I still find the agreement very one-sided. Some considerations for you (in no particular order):
1. The agreement does not mention a timeframe for your review. It links out to a FAQ that may contain this information, but the FAQ is not part of the agreement, so anything included in the FAQ is not enforceable. As designers commit upon entry, you really need to step up to the plate and indicate a "no more than xxx days" to indicate your good faith in reviewing the submissions. Designers need to feel they can seek alternative arrangements, and a timely review on your part will avoid unnecessary guess work.
2. You say designers are free to resell the design and create a new kit, yet the wording of your agreement specifically forbids this. It says: "[FONT=&]Designer-owner of said Intellectual Property Rights shall not be allowed to grant, license, assign or otherwise transfer said Intellectual Property Rights to another person and/or entity and/or third party during the term of this Agreement."[/FONT] Your agreement has conflicting clauses. The second one recently added attempts to negate the one above, but the one above should simply be revised or removed.
There are others, but I think the point is that the agreement appears to designed satisfy certain requirements for the company, and not necessarily support your goals for the program. I think it's a fine idea, don't get me wrong. But I think Jameco needs to find a way to balance its business risk with participation among those who are more likely to give away their project idea for free (open source credo), and may find the terms backward or Draconian.
-- Gordon
FB, that's an excellent 6.8% return. Risk free, sitting on your butt, waiting by your mailbox for the check. That amount is likely optimistic; it assumes you get the posted royalty percentages on the full sales price, which may or may not be the case at Jameco. If you got those same percentages from a consumer products company, it would be 30-40% less, since sales are based on the wholesale (AKA trade) price.
Two nagging factors that continue to vex my entrepreneur friends selling their own stuff are liability insurance and dealing with "defective returns". The average consumer is (to paraphrase iRobot) dumb, dirty, and dangerous. They will break, misassemble, injure and endanger. One small lawsuit could not only wipe out meager profits, but risk one's house and personal assets unless properly protected.
-- Gordon
If you think that something like 20 units per month at $25 per should offer up a higher royalty - I doubt Jameco will think much about kitting up your project. Sell it yourself as the volume is not going to bury you.
I suggest loftier goals of a kit that will sell hundreds or more each month.
And if you have a really good winner and still don't like the terms, make a complete counter offer. I am sure that Jameco really just wants to get on with selling and increasing sales. If you have a product that everyone wants, I am sure Jameco wants in on more flexible terms.
Years ago I worked for an excavation company that bid to some of the largest contractors in the USA. Occasionally, we would be awared a bid and their rather long and nasty contract would arrive. In many cases, the work was in the range of seven figures. Would we just sign and go to work? No, we signed a copy of OUR contract and sent that to them with our terms and conditions and went to work while we awaited the return of it.
That all may seem odd, but several facts were in play. The contractor didn't want us to delay breaking ground, we were never going to agree to their boilerplate, and all the work without the signed contract could be viewed as extra hourly work. Later, the 'hourly work' could be forgiven if they signed our contract in full or came in handy in removing terms from their position.
In sum, just view what Jameco has offered as a proposal. One would be foolish to just accept it entirely on fact value if one really hopes to make big money out of their item.
And YES, Jameco could move quite a bit of product at wholesale prices. So you need to discuss what those might be.
Liability insurance? Never provide a kit that requires 120VAC mains. If it only requires 12VDC there isn't much hazard. We are not selling to infants that might eat small parts - are we?
Returns and defects? Everyone has to deal with that. Fear of lawsuits? Move to China and become a party member.
http://forums.parallax.com/showthread.php?132474-CONTEST!!!-Give-Us-New-Product-Ideas!
There is a big difference though between an idea and a documented design with construction instructions.
C.W.