I have successfully licensed a number of products into various products categories – clocks, games, calendar & toys. Here is what I learned along the way.
When you come up with a viable product idea you may have a choice:
• Licensing your product
• Manufacturing, marketing and selling your product yourself
So what are the advantages of licensing your product idea.
1. It takes away the pressure of you having to manufacture, market , and distribute the product yourself.
2. Reduces your development costs and gives you a royalty income stream. (5 -10%)
3. Your licensor has an established reputation in the marketplace –so your product idea has instant credibility
4. Your licensor has an established sales force – so your product gets to market more quickly.
5. Your licensor is responsible for marketing and advertising your product - thereby achieving instant consumer awareness for your product.
What are the disadvantages of licensing your product idea?
1.You may lose control of the final product design.
2.You are dependent on the licensor to manufacturer the product to the quality you may expect.
3.Licensors often have hundreds of new licensed products to introduce every year and yours may get lost in the shuffle.
4.You are dependent on the licensor to market, promote and advertise your product - which is often calculated on a particular product’s initial sales projections.
BEFORE YOU CAN LICENSE YOUR PRODUCT YOU MUST HAVE:
1.Developed your product idea to a tangible stage whereby a potential licensor (or licensing agent) can touch and feel the product. i.e. a prototype or sample.
2.Documented all your product, category and industry research and have become an expert in these fields.
3.Developed your product idea into a product line (choices)
4.Developed your product and packaging design
5. Developed your BRAND – yes licensors will license a new brand if it is well executed – enabling you to continue to add new
products to the license- The products I licensed had all been developed through to a Brand image.
5.Executed all your legal documents: patents (if applicable)
Copyrights on all designs and images
6.Researched all possible licensors in your products’ category
7.Researched licensing agents who specialize in your products'category – If you have no reputation in the licensing or product development fields you will most probably have to work with an agent. – Make sure you have all agents you meet sign confidentiality agreement.
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Causes Leonie Mateer Supports
St Judes Children's Research Foundation
Conservation international Foundation
Breast Cancer Research Foundation