Articles covering best business practices and important insights

Are You Confident Your Recipe is Confidential?

Can a Proprietary Food Recipe Be Protected?

Are You Confident Your Recipe is Confidential?

Holy smokes, you came up with the best chili recipe in the world! Your friends are going crazy over it. So, you decide to sell it and share it with the world, but then a question pops into your head: “Can recipes be plagiarized?”

This is a common concern among food entrepreneurs. In an age where information is freely shared, plagiarism is running rampant.

Next question: “Can recipes be legally protected from being copied?” The good news is that any proprietary food recipe can be legally protected. This prevents anyone from trying to make a quick buck off your hard work, but it’s not always easy. Food recipes can be classified as intellectual property. As such, you have some options to protect yourself and your delicious chili.

Patents

A patent is a legal certification that you are the owner of a particular invention. This means that no one else can sell that invention without your express permission. Patents are pretty standard in the scientific and technology spaces.

So, can food be patented? Can you patent a drink? Few know that patents can apply to proprietary food recipes. This is because Patent Law doesn’t discriminate between edible and inedible objects.

The main problem with patents is that you need to prove the product is something new and novel. This is easier said than done. After all, how can you say that your chili is different from all the other chilis before it?

Verdict: If your proprietary food recipe is something that no else has done (and you can prove it), then a patent might work for you.

Can a Proprietary Food Recipe Be Protected?

Trade Secrets

A trade secret is a process or technique that only your business knows. Think of KFC’s “11 Secret Herbs and Spices” or the Coke formula. All of these are trade secrets.

Once protected as a trade secret, no one else will be able to use the exact recipe legally—but (and it’s a big BUT), someone else CAN try to replicate the recipe itself based on your product. This is called reverse engineering, and it is totally legal.

To make a trade secret work, you need to enforce it with everyone you do business with.

Verdict: Trade secrets are an effective way to protect your proprietary food recipe – if you’re careful

Trademark

Trademarks are less about protecting the recipe and more about protecting the brand itself. In this case, you reserve the right to use the name and logo that will represent your food product. Think of Paul Newman’s “Newman’s Own” line of salad dressings. You can try and replicate their recipes, but can’t sell them using the same name.

This is useful if you have a unique tasting product and savvy branding. Yes, it won’t prevent anyone from copying your recipe, but it WILL prevent someone else from ripping off your “Mark’s Best Southern Chili” and selling it as their own.

Verdict: If you have the marketing chops to create a valuable food brand, it doesn’t matter if people copy your recipe. Sometimes, a brand is much more powerful.

How to Negotiate Minimum Order Requirements

Don’t Have a Budget for a Minimum Order? How You Deal With Who You Deal With May Make All the Difference in the World

If you have ever tried to order items directly from a factory then you know of the minimum order requirements. But do you know how to negotiate minimum order requirements? Whether you are ordering your items from a local factory or online, you will find minimum order requirements.

The manufacturers usually set a high minimum order quantity (MOQ) because they are looking to make more sales. It is also a way of keeping expenses down because they can produce in bulk.

For small businesses new to the market, the huge MOQs can be intimidating. You can, however, learn how to negotiate minimum order requirements before you make a purchase, to ensure you get what you want.

What is minimum order quantity?

The minimum order quantity (MOQ) is the least number of units of an item that a manufacturer is willing to deliver in one order. The value is set depending on the products that you are buying, and the cost.

However, in most cases, the manufacturers will set a high MOQ, as a tactic to sell more in one order; all the more reason you need to learn how to negotiate minimum order requirements.

If you have experienced this on a product you were interested in, then read on to educate yourself on how to negotiate minimum order requirements. Here are some tactics you can use:

  • Pose as a first-time buyer.Tell the manufacturer that you are purchasing for the first time, and you would like to test out their product with a smaller order.
  • Combine different types of items in one order.Order a variety of products from one manufacturer, but with the MOQ of just one order. This is a great business move, because it also allows you to spread your risk on different products.
  • Order with another person. Buy together with someone who is buying a similar item from the same manufacturer.
  • Ask for products that are ready to ship.The manufacturer could have some items ready at the warehouse; such items should not require minimum order quantities, because they do not have to be manufactured for your order.

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If you are not successful with any of the above, or you just want to avoid the hassles of having to know how to negotiate minimum order quantities, then you can order from smaller manufacturers.

What is minimum order value?

The minimum order value is the least amount charged for your product/service in order to make a profit. This is used to determine the MOQ.

How do you find the minimum order quantity?

To determine the MOQ,the manufacturer first determines how much they would want to make for every order; they then consider the expenses for the order.

What does FOB mean?

FOB means free-on-board, where the seller loads the goods on the ship that has been hired by the buyer; the seller clears the goods for export.