This action is typically avoided at all costs, however, since the termination of a merchandising license agreement can result in a loss of income and missed opportunities to capitalize on the property by the licensor, and the waste of an often-substantial investment by the licensee. Both the licensor and the licensee can benefit from the establishment of a merchandising licensing agreement.
These agreements can grant exclusive rights to the licensee, or be nonexclusive and have restrictions on geographic markets or the right of licensee to grant sublicenses.
Manufacturing license agreements are actually similar to most licensing agreements that transfer intellectual property rights between parties. Negotiating is critical. There is no set royalty rate; it really depends on the property.
Star Wars could command 20 percent royalty rates. That's probably as high as you can get. But in general terms, the fee is based on wholesale sales. The average is around 8. Aside from understanding going rates, understanding and negotiating upfront guarantees is also critical. The quality of the licensed product is obviously extremely important. If you have a great brand but it gets displayed on a poorly-made product, that hurts your brand. The same is true if too much product ends up int he marketplace, doesn't sell through, and winds up in discount bins.
That can also distress the brand. That can often happen with fashion and apparel. A major clothing brand that licenses out some product categories must be very careful about not just managing inventory but also managing where that inventory can be placed.
Gene Simmons comes to the licensing expo ever year and walks the aisles. He loves merchandise. If you think about what Kiss did, they weren't necessarily a great band but they were marketing geniuses. Paul Stanley said, "We're a band, and we're a brand. And without one, the other suffers. They embraced the commercial side of the music more than just about any other band.
And they're very hands-on. They have a renowned licensing agent but still personally approve everything. That's a perfect example of the power of licensing: The more places their name is out there, the more visibility Which is what I'm basically doing right now since I'm wearing a t-shirt with the Under Armour logo prominently displayed.
What many people don't know is that Coca-Cola does around a billion dollars a year in retail sales of licensed merchandise. Disney also licenses its movies, TV shows, and music. Even footage of its theme parks can only be used by those with a brand license. The licensed sports merchandise market is big business. Licensing your brand essentially means forging a partnership with another business. One of the main benefits of these partnerships is being able to reach a wider audience.
Working with another brand gives you instant access to their customers and audience and vice versa. No matter the size of your company, it can be hard to grow a product lineup in a meaningful way that keeps pace with those customer expectations. Licensing your brand is one way to build bridges between your manufacturing and product design capabilities. The end result? Driving repeat sales and delivering the products your customers are looking for.
The licensed product definitely spreads faster on social media. And when people buy it, they love sharing it. That's a huge part about our businesses and our positioning: we're fun. It makes a lot of sense when we do fun licenses because it puts smiles on people's faces and they love showing off their coolers. Depending on the licensed product, that incremental revenue can even help to smooth out seasonal swings in your retail store. When a brand gets big enough, counterfeiters are never far behind.
Licensing your brand can help you stay ahead of this curve. One of the first stages of the brand licensing process is to protect your intellectual property.
Breaking into a new market is risky. Sure, you can do product research, listen to customers, and keep an eye on what competitors are doing. But you never truly know whether investing in a new product will pay off until you do it. One of the hardest things about growing a retail business is manufacturing. You can drive customers to your store or ecommerce website, but as soon as they get there, you need the manufacturing process to run smoothly.
Otherwise, those potential customers leave empty handed. By sharing common costs like promotional and advertising efforts, both the licensor and the licensee may be able to save money and gain efficiencies. Protecting your intellectual property IP is one of the most important factors behind licensing your brand. The last thing you want is to accidentally give someone full, unfettered access to your brand assets without getting anything in return.
If that sounds crazy, consider Dale Earnhardt Jr. The best way to protect your brand is to work directly with a lawyer who specializes in intellectual property—and to get started early. Then you can think about licensing them down the line. That way, you can make a quick decision about which companies to approach and approve. It all starts with extensive research. However, there are some unique aspects to these agreements, some of which require knowledge of trademark law or the right of publicity.
For example, character licensing involves overlapping trademark, copyright and design patent laws. These types of licenses are often handled by special licensing agencies that represent trademark owners, fictional characters and celebrities. Merchandise, by its nature, can generally only accommodate small amounts of text. When you license text, art, graphics or music for use on merchandise, you are ordinarily required to pay the owner the licensed material a royalty--that is, a continuing payment based upon a percentage of the income you earn from the sale of the merchandise.
Royalty rates for merchandise licensing vary depending on the merchandise involved. Below are some royalty estimates:. Occasionally, a seasoned copyright owner who has licensed many properties may furnish the merchandise license agreement. However, most of the time, the licensee — the company that is manufacturing and selling the merchandise, furnishes the merchandise license agreement. Usually, prior to furnishing the agreement, the licensee and the licensor have worked out all of the business terms.
For example, they have determined the royalty rate, the rights being transferred, the length of time for the agreement and other financial terms. If you would like to purchase a sample Merchandise License, click here. All rights reserved. Self-help services may not be permitted in all states.
The information provided on this site is not legal advice, does not constitute a lawyer referral service, and no attorney-client or confidential relationship is or will be formed by use of the site. The attorney listings on this site are paid attorney advertising. In some states, the information on this website may be considered a lawyer referral service.
0コメント