Going For The Gold
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The Olympic experience of the product licensees who sell the Games is much like that of the athletes who compete in them: For the select few who qualify for the world's greatest sporting event, it is an opportunity to reap golden rewards from the unparalleled exposure unleashed by a medal-winning performance.
Gross revenues from merchandising this summer's Centennial Olympic Games in Atlanta, for instance, is expected to exceed $1 billion-more than twice the total licensing revenues for the 1984 Los Angeles and 1992 Barcelona Summer Olympic Games combined. And those numbers don't include the sales raked in by companies that launch themselves to a new level as a result of participating in the Games.
Even better news for small-business owners is that you don't have to be a traditional powerhouse to break in. "The major companies get most of the Olympic licenses, but that doesn't mean small companies don't have the opportunity to get in," says Karen Raugust, executive editor of The Licensing Letter, a licensing trade journal. "If you have a distributing niche or a unique product that no one else is making or that no one else is making well, that's your edge. You have to convince the licensor you are the right company and have something that sets you apart."
Although the merchandising arm of the Atlanta Olympics accepted only 130 or so of the more than 10,000 licensee applications filed, approximately a dozen small companies, including those profiled here, demonstrated that certain je ne sais quoi. Contrary to popular opinion, though, the Games don't automatically mean instant success. Profiting from Olympic merchandising is a labor more resembling a marathon than a sprint.
"The Olympics are a one-shot deal," Raugust says, "but if the licensees are successful, they're going to become known to other sports licensors, and that could provide them an entree to other opportunities." That could include other ways to tap the sports licensing industry, which Raugust says produced $13.4 billion in sales in the United States and Canada last year. "The Olympics also represent a chance to reach new customers, besides the target audience, that will help a small business in the long term."
Of course, the short term can also be quite rewarding if you calculate your risks correctly. That includes figuring out how much product to produce, how many different lines to use, what your competition is likely to do, and planning how to react to any unforeseen changes in the market that occur during your production time.
On the plus side, there are several inherent advantages to marketing Olympic goods you don't get from licensing other products. First and foremost are the Olympic trademarks and symbols.
"The Olympic marks [such as the five interlocking rings and the torch] are some of the most recognized marks in the world," says Darby Coker, director of communications for marketing at the Atlanta Committee for the Olympic Games. "They have close to a universal appeal. Demographics show they're equally recognized by males and females, old and young, rich and poor. All kinds of positive images come with the Olympic marks. Products with the marks are already well-positioned in the market; little development is necessary because people already understand them."
The second major bonus of licensing Olympic products is the marketing support you receive from the merchandising division of the organizing committee. The marketing program in Atlanta, directed by Atlanta Centennial Olympic Properties (ACOP), is a comprehensive retail and marketing support effort that includes assistance in distribution, promotions, public relations, mailings, point-of-purchase materials and a score of other areas.
On the following pages, you'll meet three companies that are reaching their Olympic goals. Each is a creative leader in its field, and each brings something different to the table. Each also has advice to offer other entrepreneurs interested in merchandising future Olympics.
Energy in Motion
Mack II Inc. owner and president Mack Wilbourn is a walking ball of energy. He doesn't even sit down for interviews. The 52-year-old former McDonald's franchisee answers questions about his color-changing coffee mugs, color-changing glassware and other products while bouncing off what some people say should be his color-changing walls.
Indeed, Wilbourn's downtown Atlanta office is painted a most eye-opening shade of pink. While the color was his decorator's idea, he likes it. The vibrant, feel-good shade suits him, especially when he's asked why he chose to get involved with the Olympics. Shaking imaginary pom-poms and imitating the leap of a high school cheerleader, he says, "Because of the excitement!"
Wilbourn's products change colors and show motion when either hot or cold liquid is added. Pour coffee into one of his mugs, and the soccer player on the side drills a shot into the back of the goal net; into another, and leafy ornamentation appears over various Atlanta Olympic symbols. Pour a cold beverage into his Coca-Cola glass, and the route of the nationwide Olympic torch run shoots across a map of the country.
A previous owner of four McDonald's franchises, Wilbourn was in the market for other entrepreneurial challenges when an associate showed him the product. He was so impressed, he decided to start a new business in 1994 selling the glasses. "The product had appeal, and I knew I could do something with it," he recalls. "I knew this was something people would take home to friends and show them. Olympic products are also collectibles, and we want families to have something they can look back on and cherish."
Wilbourn did have to overcome one hurdle to prove that his product could move. "The challenge was to demonstrate it on the shelf, so I came up with a minibillboard for each design," he says. The small cardboard strips, which fit inside the cups, are illustrated to show how the design changes. "I wanted to be able to catch the consumer's attention in seconds, and I think we've done that."
Now the glasses are sold in airport gift shops in Atlanta and Savannah, Georgia, as well as in Texaco gas stations nationwide. Wilbourn, like many licensees, is also working on a multitude of corporate tie-ins. In addition to the Coca-Cola glasses, he is pushing pilsner glasses for Budweiser. The idea is to create products corporations will want to use in their own promos, both during the Olympics and after. At press time, Wilbourn was also talking to various restaurant chains about using his glassware in Olympics-related promos.
As for the bottom line, Wilbourn, like most smaller licensees, sees Olympic merchandising as a launching pad. "If I'm able to get my money back and get my products out to new consumers, I will consider this venture a success," he says. "This will take my company to another level because of exposure I would never have been able to get in other ways. For me, this venture is also a degree in learning about sports marketing and being able to market other products."
Advice:"You have to be patient, and you have to learn a lot. You have to understand that Olympic products are emotional products. They have a very high peak and a fast descent. I think entrepreneurs should think twice before getting involved, but it is a worthwhile project."
While Elgin, Illinois-based Copywrite Products LLC produces dozens of different Olympic products, three in particular-its in-line skate bag, multipocket pin pouch and duffel bag-reveal Copywrite's strength in innovation and construction. Copywrite is the only company producing the first two items and has created one of the best of the third.
"We realized in-line skating is a [popular] sport that a lot of people are involved in," explains Thirza Ann Duensing, co-owner of Copywrite, which makes a line of bags, briefcases, toiletry kits and stationery accessories. "We also learned the only people making bags for the skates were the skate makers themselves. Nobody was taking it to the next phase of introducing a skate bag with an Olympic logo."
Copywrite's pin pouch is also a hot item. While most serious collectors carry around large display cases (Duensing says that some $110 million in pins is expected to be sold by the time the Atlanta Games are over), few storage options existed for the novice or for the newcomer who gets swept up in the frenzy of pin trading at the Games. The pouch contains six cloth pages separated by acetate. You can also store your wallet and keys in it and wear it on your waist or shoulder.
"The bottom line is that good design sells," Duensing says. "There are a lot of products out there that have been rather indifferently designed. You see cases of a company logo just being slapped on a bag. To me, good design will always sell-and it doesn't have to be expensive."
Quality construction also sells. "These [pin pouches] have been very popular items," says Duensing, whose company first made products for large-scale events during the 1994 World Cup. "We've been selling a lot of them."
Copywrite's other Olympic-themed products include stationery and writing instruments with the Centennial Torch mark and images of Izzy, the official mascot of the Atlanta Olympics. It sells its products in sports specialty stores like The Sports Authority and to retailers, including Duty Free Shoppers, JC Penney, Uptons and W.H. Smith.
Advice:"You have to establish a reputation that lives beyond the event and provide high quality in all areas of operation. If you don't, you won't have a relationship with retailers beyond the Games. Olympic merchandising is an extremely long-term effort, and there are a lot of nuances that come with that scenario. It's also very risk-laden. You have a long planning period for production, and you have to be extremely conservative in your approach to some [areas of operation]."
Mark Abramoff, president and founder of Ralph Marlin & Co. Inc., created a whole new industry in 1986 when, sitting in a Milwaukee bar, he sketched the world's first fish tie on a napkin. The crazy idea turned into $3 million in fish tie sales that first year and spawned a $15 million worldwide business, not to mention a new industry: conversation-piece neckwear.
Now celebrating the 10th anniversary of his fish tie and his company, Abramoff is seeking to add another million in sales at the wholesale level by producing a line of 30 of the coolest Olympic ties on the market. His bold, beautiful graphic designs include several different lines. One line of classic silk ties features images of historical posters in homage to Olympics past, from the 1920 Summer Games in Antwerp, Belgium, and the 1924 Winter Games in Chamonix, France, to the 1960 Summer Games in Rome. The company also offers American Olympics (silk), American Pride (microfiber polyester) and Atlanta Games (silk) lines. For women, Abramoff produces several lines of Olympic-design scarves.
"The Olympics are one of the highest-profile events in the world," says Abramoff, a sports fanatic who can't wait to see the Games in person. "This is a great opportunity for exposure and for a company like mine to compete with the big guys. We can't compete with them in distribution, but we can outperform them when our products are side by side.
"It's also a chance for us to build equity in our company. When a small company like mine adds a high-profile property like the Olympics, it improves our position in the marketplace."
Adding the Olympic lines is another step in Ralph Marlin's tre-mendous growth (1,500 percent since 1986). The company's other lines cover more than 90 licenses and include all the major U.S. sports leagues; Harley-Davidson; bands such as the Rolling Stones and the Beatles; Hollywood-themed neckwear featuring the likes of Marilyn Monroe, The Three Stooges and more; and an assortment of neckwear related to cartoons, occupations, fine art, hobbies and a dozen other categories. The collections are available at department specialty stores; Ralph Marlin stores in New York City, Minneapolis and Indianapolis; as well as through mail order catalogs, home-shopping channel QVC and the Internet.
Advice:"Make sure you understand all the elements of the Olympic merchandising deal-the amount you put up in advance, who your competition is, how many people are licensed in your category, etc. Find out as much as you can, and get as much out of that as possible."
Entering the merchandising game starts with the application process, which begins several years before a particular Olympics. While Olympic marketing is organized as a joint venture between the host country's Olympic sports governing body and the host city's Olympic organizing committee, you should contact the organizing committee's licensing division directly to get an application and learn its particular procedures.
Be patient. Nothing is going to happen quickly. If you are accepted, you'll pay, in advance, a percentage of your total expected retail sales. You'll also pay a certain percentage of predetermined royalties from your Olympic products.
The 1998 Winter Olympics will be held in Japan, followed by the 2000 Summer Games in Australia and the 2002 Winter Games in Salt Lake City. It's never too soon to get started; the Salt Lake City Olympic Organizing Committee is already accepting applications.
Â©For the 1998 Winter Olympics in Japan, contact the Organizing Committee for the XVIII Olympic Winter Games, Nagano 1998, KT Bldg. 3109-63, Kawaishinden, Nagano City, 380 Japan, or call 81-26-225-1959.
Â©For the 2000 Summer Olympics in Sydney, contact the Sydney Organizing Committee for the Olympic Games, Penny Baker, Retail Product Manager, GPO Box 2000, Sydney 2001, Australia, or call 61-2-297-2000.
Â©For the 2002 Olympic Winter Games in Salt Lake City, contact Rod Hamson, Director of Marketing, 257 E. 200 South, #600, Salt Lake City, UT 84111, or call (801) 322-2002.
"We welcome new opportunities and ideas," Hamson says. "We'd like to find companies with different ways of distributing their products to the market. We're looking for products that enhance the winter sports."
Unlike the athletes who compete in only one sport, small-business owners have more than one way to win the gold. Businesses that might not be able to clear an Olympic license on their own can ride piggyback on a larger company and become its sublicensee. This allows the smaller company to avoid shelling out a large advance-and allows the licensee to offer the Olympic organizing committee a broader variety and quantity of products. In effect, the licensee can offer the committee one-stop shopping and gains a big lead in the race to obtain a license.
Olympic committees are noticing the benefits of dealing with fewer companies. For the Atlanta Games alone, some 25 to 30 sublicensees are handling part-and, in some cases, all-of a particular product for the big licensees.
"Sublicensing, if done properly, can be a big help to small, minority and disadvantaged companies," says Victor Rodriguez. "There are a lot of companies that have become part of the Olympics [through] sublicensing that otherwise would not have been able to do so." Rodriguez is president and co-owner of Alpha-Omega, an Atlanta company that creates and applies graphic designs to blank T-shirts, sweats, caps and other items for Hanes and Hanes Her Way.
"There are a lot of opportunities for sublicensees that can do graphics or do part or all of a job," adds Darby Coker of the marketing arm of the Atlanta Olympics.
Entrepreneurs interested in sublicensing future Olympics should contact the merchandising division of that city's organizing committee. (U.S. entrepreneurs will have more opportunities with Olympics taking place here than abroad.) Find out what sublicensing programs already exist within each product category. If none exist, get the list of big licensees that handle products you're interested in (most of them were probably licensees in previous Olympics), and try contacting their sublicensing program directly.
While the Olympic organizing committee signs off on all sublicensee contracts, individual licensee companies manage all the arrangements. And since those licensees are generally already aware of companies they would like to work with as sublicensees, it's up to the small-business owner to make his or her company known.
Christopher D. Lancette is a freelance journalist and editor in Atlanta.