Brand Licensing For Dummies Cheat Sheet

When you’re ready to get into brand licensing, you can benefit from some inside knowledge of how the business of licensing works. The goal of this cheat sheet is to provide you with a basic understanding of brand licensing’s key elements.

Things to know about a brand licensing deal ahead of time

Finding the right brand license to help you sell more products means doing research on the brand licensing marketplace. Here are some key questions to consider when seeking the right license:

• What’s the best license to connect with my product or service?
• Where do I look for licenses? How can I compare licenses that are available?
• What are the financials involved in acquiring a license? Is it a standard rate, or do different licenses price differently?
• What if the license I want is already being used for a similar product? Will the brand consider licensing for a similar product?
• What steps do I need to take before approaching a brand licensor?
• How difficult is it to secure a license for my product/product category and retail distribution?
• How complex is a licensing contract? Do I need a lawyer to go over it before I sign it?
• How long does the licensing contract last? What about renewals?
• Does this license require an advance on the minimum royalty payment guarantee when I sign the contract?

What you need to know to get started in brand licensing

Licensing is a great marketing tool to sell products using the equity of well-known brands. To get started, you need to figure out what brand goes best for the product or service you’re trying to sell. Here are a few guidelines to follow to find the best license for your product:

• What’s your budget? How much do you have available to spend on acquiring the license? Certain licenses are more expensive than others, so figure out your budget before you approach a licensor.
• What’s your track record? Most licensees have a track record of selling products at retail. Your ability to show a licensor your sales record at retail goes a long way toward helping you get a license. Don’t worry if you’ve never had a license before; the licensor just wants to know you have a viable product and have sold it successfully at retail.
• Is your product unique? A unique product gives you a leg up in getting a licensor to say yes.

Dos and don’ts for a new licensee

As in any business, there are some basic rules you will want to follow as you start to establish yourself as a new licensee. Here are some of the basics that will assist you as you begin your journey:

• Do be positive when speaking to a licensor about its brand. Even if the licensor initially turns you down, stay positive.
• Don’t argue with a licensor over set royalty rates in the first meeting. If the rates are too high for you to pay, politely decline the license. You never know when you may want that same license down the line, so don’t burn that bridge.
• Do do your research ahead of your first call or meeting with a licensor. Understand the brand and why it’s so valuable for licensing.
• Don’t forget everything you need in your first meeting with the licensor. Make sure you have product samples, retail references, and your previous successful track record handy.
• Do do your homework on different brands that can work as licenses for your products. This way, if your first brand choice says no, you have other options to choose from.
• Don’t make a licensing deal if you don’t believe 100 percent that the brand is right for your product.
• Do stay up to date on available licenses that align with your product.
• Don’t be late in making your royalty payments. Late payments are what trigger audits and also make licensors very unhappy.
• Do utilize the licensor resources available for you. such as style guides, retail development. and marketing updates.

Don’t get discouraged if you have a difficult time securing a license. Hundreds of great brands are available for licensing. Eventually you’ll find the right one.