A product sold under a brand name owned by a company, rather than a generic name is called proprietary product. Proprietary products or services allow businesses to develop customer loyalty and continuously build on their offerings. Proprietary product lines and brands give excellent gross margins and enhance the profitability margin for the distributor.
A proprietary product is one that is manufactured and marketed by a person or persons having the exclusive right to manufacture and sell the product. Proprietary products, ideas and objects are the property of the owner. Without the permission of the owner these products cannot be recreated. These products are subject to a variety of restrictions and disclosure requirements.
The makers of proprietary products enjoy numerous advantages for their exclusive products. From quality control to revenue, in every aspect developers of these products take maximum value. Adobe Acrobat , whose Portable Document Format ( PDF ) files can only be read with the Acrobat Reader is one of the prime examples of a proprietary product. Apart from that, Microsoft, Fuji are also well known for their proprietary approach.
Protecting Proprietary Technology
Once a company builds amazingly innovative products, it must safeguard its inventions and invest in proprietary assets. Businesses spend a huge amount of money, time, and resources on developing proprietary products. So, it is important to properly safeguard their proprietary technology. Along with signing non-disclosure agreements (NDAs) with the employee, Companies may also require to continuously update their security systems to make sure there is no data breach.
A maximum number of foreign companies has highly sophisticated their production line. The manufacturer owns the design, and the specifications are set by the manufacturer, not the buyer. The buyer often chooses from a menu of specifications. Proprietary product lines give a distributor with complete control and ownership. From image to branding, quality to price, it is the distributor who controls the entire products. It gives a unique opportunity to the distributors to come up with an exclusive marketing strategy for their product and build a steady brand building game plan. Proprietary product lines and brands give excellent gross margins and enhance the profitability margin for the distributor.
Proprietary products or services allow businesses to develop customer loyalty and continuously build on their offerings. When you’re taking advice from financial institution on the purchase of proprietary products, check if the institution promotes third-party funds. You may be limiting your chance of building your asset with the institution if it only offers proprietary products. It is suggested to enquire what will happen to the asset if you move your account away from the institution that issued it. There are proprietary investments that are not portable. As a business owner you might have to sell them before going to another firm. This may result in a capital gain/loss.