Six Things to Consider When Choosing Your Licensees…

Post 74 of 109

When we first launched the Jenerosity Marketing blog, we talked about how to identify potential licensees.  Then, after Licensing Show, we addressed points to keep in mind when presenting your brand.  In this post, I would like to talk about things to consider when selecting a manufacturing partner.

Choosing licensee

 

 

 

 

We all know the game, right?

You get your brand materials together in preparation for contacting every potential manufacturer that you know in the licensing industry.

You go to trade shows, read the appropriate newsletters and magazines and talk to all of your colleagues to find other potential licensees.

You finalize your master list and then you start calling… hard!

With any luck, you have a brand that people want, but even if your brand isn’t as exciting, you are still going to have to make the right decision with regards to your final partners.

Here are some things to consider when evaluating the options:

  1. Product qualityDo you like their product???  This is probably the most important factor when choosing a licensee.  Do they use top-quality materials to make the product?  Is the printing good?  Is it bright and colorful if that is what your brand demands?  Can you picture your brand or characters on the product?  Just remember, if you hate the product or if it isn’t of good quality the rest of the points listed below won’t matter.
  2. Existing licensees:  Does the partner currently have top-tier licenses?  Or have they only partnered with smaller brands you have never heard of?  Usually a licensee that has partnered with companies like Disney or Mattel can be trusted to know what they are doing in terms of manufacturing, distribution and marketing.  Alternatively, at times a potential partner won’t have any licenses but their product is so beautiful that it is worth introducing them to the world of licensing.
  3. Distribution: Where is the potential partner’s product being distributed?  Are they only distributing in specialty retailers?  If so, they might be a good partner for your initial launch but not for your full roll-out.  Are they only at mass?  They would probably be great for down the road once the brand is fully established.  You likely want to consider the value channel only after you have full distribution at all other levels so you don’t damage the perception of your brand.  The right distribution strategy can also make or break a brand.
  4. Marketing capabilities: Is the partner willing and able to put money behind your product line?  Will they promote it online?  Will they pony up for a marketing fund?  Are they open to paying for in-store signage and nice packaging?  It’s important to ensure that your product is being presented in the best light and marketing has everything to do with this.
  5. Reputation: What do other licensors say about this partner?  Are they responsive, easy to work with and generally good partners?  Do they submit their product approvals with the appropriate paperwork and do they adhere to the terms of your agreement?  It’s very upsetting when you do a deal with a company who won’t submit their royalty reports or worse, your royalty payments, as outlined.  But most of the time, you can get a sense of the partner from their other partners
  6. Deal proposal:  Finally, what does the deal proposal look like?  Are the financials acceptable and in line with the basic terms set for the brand?  Do the projections make sense based on what you know of the company’s business?  Is the manufacturer willing to put their money where their mouth is in terms of committing to a guarantee?  Note that I don’t recommend always proceeding with the biggest deal as you need to take into account points 1-5 as well.  But it is critical that the company you ultimately partner with has a vested interest in the success of the brand.  And usually, their financial plan will illustrate whether or not this is the case.

Is there anything we missed?  Feel free to provide more points in the Comments section below…

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  • Debbie

    Another important factor that seems ultra simple is: do you like them and think you’ll have a good working relationship with them? This is a tough one though as if the dollar signs are there, sometimes you have no choice but to overlook this.

    • jenerositymktg

      Absolutely true, Debbie. It is no fun to dread calls with licensees when you interact with them so closely. But also very true that if they meet all the other criteria outlined you sometimes need to overlook this and do what’s best for the brand… 🙂

  • Smithb637

    I’ve been absent for a while, but now I remember why I used to love this website. Thanks, I’ll try and check back more frequently. How frequently do you update your site?

    • Jenifer Kramer

      Thanks so much; I am glad you like it! I try to update my blog every week or two depending on the season…

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