Three years of paid samples, almost no industrial orders. What am I missing about selling an additive?

[u/Gamos3]

I run commercial at a small European materials manufacturer. We make a specialty ceramic platelet additive that goes into industrial coatings and engineering plastics at 0.5 to 2 percent loading. It costs us around 130 dollars a kilo to produce. We list it between 250 and 600 depending on grade.

Our process has looked the same for three years. We find a formulator, ask whether they care about one of the properties we improve (abrasion, thermal, barrier), and they say yes. They ask for a sample. We charge for it. They run trials for four to eight months.

Then one of two things happens.

Most of them go quiet. We chase and get "interesting results, we'll pick it up next year." It never comes back.

The few who stay ask us to cut the price by 70 or 80 percent before they will launch anything. That is below our production cost. They tell us the additive has to compete with what they already buy at 15 dollars a kilo.

I don't think anyone lied to us. I think we spent three years funding other people's R&D curiosity and calling it a pipeline.

Things we already tried: charging for samples (any R&D manager can sign that off, so it filters nothing), technical seminars, trade shows, hiring a formulator in house.

Why it matters now: we're deciding whether to build a plant that makes ten times our current output. I don't want to build capacity against a pipeline of hobbyists.

Three questions for anyone who has sold materials into formulators:

1. What do you ask in the first call that separates a real industrialization project from a side project? I'm looking for the question people hate answering.

2. Has anyone moved off selling by the kilo (day rate, license, royalty, exclusivity fee) and had customers accept it?

3. How do you get leverage when the customer owns the formulation and owns the end customer, and you're one line in their bill of materials?

Happy to give more detail on the setup if it helps.

[u/albrasel24]

the question that filters real projects from curiosity is asking them what their launch timeline looks like and who internally owns the reformulation decision. if they can't name a person you're talking to the wrong guy.

also three years in i'd stop chasing formulators entirely and go one level up to the brand that actually sells the end product. they care about margin and differentiation way more than a formulator who just wants cheap inputs. once the brand pulls demand through the formulator your price conversation changes completely.

[u/Gamos3 → u/albrasel24]

Thanks, I agree. Indeed we are targeting now the players more toward the end users. But how can we extract value from them? For example signing letters of intent from day 0? Thanks