Brand Licensing…Simplified!

Brand licensing is all around us, but if you do not know what you are looking for, you wouldn’t even realise. As an industry, it is massively growing in revenue, products and people. And yet, despite the fact that more and more companies and brands are becoming involved in the industry in one way or another, there is very little information to explain how the world of brand licensing works. This is where we come in.

This blog post will outline brand licensing in it’s most basic form, so whether you are somebody starting out in the industry, or a brand looking to expand into the world of licensing, this post could be an excellent place to start, to master the basics!

So, what is brand licensing?

The purpose of brand licensing is to generate an income and increase brand awareness through the partnering of a brand with a manufacturer so that new branded products can be produced and sold.

The key parties involved:

There are four main parties typically involved in brand licensing:

The Licensee: the manufacturer, also known as the supplier. They are the party that is permitted to use a trademark or a brand.

The Licensor: the brand who owns the intellectual property rights to the brand name or logo, also officially known as the brand owner.

Retailers: the party that agrees to sell the products developed.

The brand agent/agency: This party facilitates the deal and is entrusted by the licensor to find appropriate licensees and secure retailers to produce and sell their product. This is what we do here at The Point.1888.

All four parties work in collaboration to produce new licensed product that can be brought to market.

What is in it for you? (Regardless of which party you are…)

Brand licensing can be extremely beneficial for all parties involved when executed correctly. When a brand is growing, competitors are never far behind and therefore brand licensing is an excellent way to stay ahead of the game. Brand Licensing can be perfect for expanding your reach and offers opportunities to connect with consumers in different areas. For example, using brand licensing can expand your incremental shelf space and consumer touchpoints via licensing into a new category that is not primarily associated with your business. This means the brand gains incredible exposure in those categories in every retail store which the product is sold.

For the manufacturer, more income is generated and more profit, as well as expanding your exposure and business which could potentially reach new retailers for alternative agreements and future opportunities.

I am interested, but what makes a business right for brand licensing?

No matter the size of your company, brand licensing is always a possible option for a business wishing to extend their brand.

Having said this, extensive retail expertise, a good understanding of the commercial and legal strategies behind deals, and good communication skills are important to ensure high levels of communication and professionalism throughout, so as not to cause damage to brands. Below we have outlined what is needed from each party involved in a licensing deal for it to be successful:

As the brand…

As a brand, firstly, you need strong and credible brand values and purpose, so that the licensee makes products that clearly resonate with your brand and will appeal to your consumers and the retailer alike. Additionally, you need to have a clear logo or brand identity that can be widely recognised in licensed product, as well as strong legal protection for your intellectual property, so no one can unwillingly use your brand assets. It is also beneficial to have a good following on socials and a good brand licensing agency on side that aligns with their core values and beliefs and that you trust to choose the right manufacturers and products to take to retail.

As the manufacturer…

As a manufacturer, you ideally need a proven track record of making similar market leading products where possible, to ensure you have the top manufacturing facilities needed to deliver quality products to retail. As well as this, established routes to market are needed as well as the ability to form good channels of communication and relationships between all parties. One of the most essential factors though is that you have a strong a passion for the product you create. Additionally, as is important for all parties, a well written contract, especially with the brand in this case is crucial to the smooth, legal execution of the deal. Finally, it is important that you have the correct accreditation to make you stand out as a leader in your field, as well as the ability to make a broad range of products to stay relevant and agile to produce whatever the brand and agency come up with.

As a retailer…

As a retailer, one of the most important aspects is a passion to work with the manufacturer to list the product and give it as much exposure in the store as is possible. Sometimes, especially if you are working with a smaller brand, it can be a big leap of faith selling the product in your stores, and therefore belief in the brand and the products is crucial to an effective agreement. You need to have an excellent idea of what is on trend and what is not and knowing where there is the demand. The desire to see branded product in a different or specific section of the store is often the reason why a buyer would look to list that branded product. The final and most important aspect for the retailer is a solid understanding of their own consumer base. When a retailer backs a brand, cross-category offerings, instore POS, competitors, and social media presence as well as social posts from the brand owner need to all be completed to promote the product and activity.

Overall, for all parties, Communication and organisation is paramount, you are constantly juggling multiple balls, and need to keep in control of all components of the deal in hand. Moreover, if you are creating multiple products across multiple categories, there will lots of potential deals to juggle.

This is where a licensing agent comes in handy. Licensing agents can speak truthfully to all parties and communicate effectively across parties to ensure smooth procedures and strategy. Here at The Point.1888, we operate on a retail first model, meaning that we ensure that every brand and licensee we work with has somewhere to be sold before proceeding any further with a deal. Therefore, using a licensing agent can be extremely beneficial for a business wishing to venture into the world of brand licensing.

If you are interested in brand licensing, or want to find out more about what we do here at The Point.1888, find us on LinkedIn or take a further look around our website.

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