License To Profit
Make your play for a piece of the $100 billion licensing market.
To many, it seems to be the key to a gold mine. Putting a Notre
Dame logo, a Lion King character or a Jurassic Park graphic on your
product means guaranteed success, right?
For a sure thing, prepare for a frustrating search. But if
you're willing to put some time and effort into making your
product work, buying the licensing rights to a well-known product
or name can substantially increase your chances for success.
Licensing is a $100 billion retail market worldwide, with $70
billion in business in North America alone, says Murray Altchuler,
executive director of the International Licensing Industry
Merchandisers' Association (LIMA). But "a license is not a
[prescription] for instant success," he cautions. "It
gives you the borrowed interest of a name that is either unique or
has some consumer acceptance, but it still takes good selling and
marketing to succeed. A license is, in essence, a tool, and when
used well, it's an extremely cost-effective marketing
tool."
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Licensing offers three major advantages. "First of
all," Altchuler explains, "it may mean you have something
unique your competitors don't. Second, it may mean getting a
little better margin because it is unique. And third, it may mean
that 10 percent of the retailers you call on that you have never
been able to sell to will finally take a look because you have
something different. And when that happens, you can sell the rest
of your line." Another benefit, Altchuler adds, is that
licensing positions you as a leader.
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