Time for New Business
The licensing market has a supply and demand problem.
There are many more rights available to buy than licensees, manufacturers or retailers willing to buy them. This may have always been the case but in my 25 years in the industry I don’t think the imbalance has been quite this acute.
One reason for the growth in rights being sold is the fact that Licensing is a successful business model and there are many success stories that inspire others to replicate this success. The financial rewards can be great and in some cases licensing can help brands reach market sectors they can’t on their own.
In a sense, the more players in the market, the more we can point to licensing as a successful business story. In some cases it is also relatively easy to get started in licensing and shows like Brand Licensing Europe provide a great forum for companies to try to sell their rights.
That said I think as an industry we have not done enough in bringing in new licensees. This is not to say that efforts aren’t being made and to be fair LIMA are doing a good job of advocating the potential benefits of licensing to manufacturers. But I think those of us on the rights selling side all have a responsibility to ‘sell’ licensing to new companies and to do our bit for new business development. We shouldn’t sit back and just trade on old contacts.
Existing licensees provide the backbone for many campaigns but they simply can’t do everything that is available. They don’t have elastic portfolios.
It is vital we all do our bit to seek out new manufacturers and retailers – this can be in existing sectors but also in new areas for licensing. I think there is a need to be imaginative , ambitious and daring : maybe allocate a day a week or specify a new business day to really think about where new business might come from and then make an effort to cultivate it. Identify some new product areas to develop business in and challenge yourself to consider genuinely new areas …these may be the harder ones to break into but could make the difference to your business.
Licensees could reflect on new retailers for licensed products: are there retailers that you haven’t pitched to or is there a retailer that could provide a great outlet for the right products? Take a custom approach.
One challenge when meeting new companies is explaining the concept and benefits of Licensing – there are central resources that can be used here to help but I think as professionals we are all capable of addressing this and selling the benefits of our business to newcomers. We should accept the challenge as our investment in our industry. Once you get over this hurdle the process of selling your brand can begin. It is our business and we all have a collective responsibility to extol the benefits of it.
Here I would also encourage you to think about brand fit and how your brand will benefit the new company. The best licensed products are ones that take a bespoke approach and are a great match. That said even at the mass market end of licensing we need to maintain a quality standard. It is essential consumers get an added value experience with licensed products – they need to be best in class products not average or below average. Saving a few pennies now could be costly in the future as the prestige of licensing and licensed products is diminished.
It is tempting to compromise on product quality and design to move quickly and to get to retail fast. But low quality product is self-defeating. Think about this when developing product. Investing in quality now will bring rewards in the future and help ensure licensing is regarded as a quality focused industry and not one that is looking to make a quick buck.
Do your bit as a salesperson to sell licensing to some new companies. It’s payback time.