Unable to Grasp the Concept of Licensing? This is Your Perfect Guide

Let's dive into the world of licensing

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We all have worn the Disney hats and costumes once in our lives but has it ever occurred to you that it is not the Walt Disney Company that is actually manufacturing these products. However, they have agreed for other companies to manufacture products using its name for a specified payment and that’s exactly what we called Licensing.

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Licensing could be used as an effective marketing tool if used efficiently. It has become a billion-dollar retail market worldwide. Apart from revenues generated through organic sales and investments, the established companies earn a major chunk of their income by tapping into the revenues of the companies selling products or services under their license.

Licensing Agreement?

Granting a licensing patent allows the business to grow more profitably. Apart from generating additional revenues, the strategy offers multiple advantages in terms of having a better present  the competitors, increasing of margin rate and reaching out to people who were inaccessible earlier. This adds up to the USP of a brand.

For a company looking to obtain a licensing agreement, it must be strong in terms of finances, manufacturing and marketing to be able to establish distribution channels as expected by the brand it is paying fees to. For better understanding, licensing fees typically amounts to a small percentage of the sales price but can add up quickly.

Some Inspiring Examples...

Did you know that about 90 per cent of the sales profits at Calvin Klein Inc comes from licensing the designer's name to makers of underwear, jeans and perfume? Its women's apparel lines are the only merchandise the New York-based company makes itself. Many large corporations generate less significant proportions of their revenue from licenses.

IBM, after energizing its efforts to license its thousands of technology patents a few years ago, now attributes $1 billion a year of its corporate sales to licensing. The downside of licensing is that you settle for a smaller piece of the pie. Calvin Klein-branded products, for example, generate $5 billion in sales a year, the vast majority of which goes to licensees and retailers.

Opportunity to Explore More

If you are looking to explore the space more, India Licensing Expo 2019 is a perfect opportunity for you to do so. The serious business-to-business brand licensing show offers a galaxy of possibilities for your business growth and diversification. The expo is a true showcase of numerous licensing opportunities in diverse capacity, ready to be extended in multiple industries.

Offering a great mix from all brand segments, the opportunities displayed can be encapsulated as a special collection under the existing range, or can even be strategically launched as an individual brand in the Indian marketplace. The show also is full of value-adds that enhances the whole experience of the show, comprising of integral theatres, brand spots, character parades, visitor ease out zones, and much more.

Register for the event here

Aastha Singal

Written By

Entrepreneur Staff

A business journalist looking to find happiness in the world of startups, investments, MSMEs and more. Officially started her career as a news reporter for News World India, Aastha had short stints with NDTV and NewsX. A true optimist seeking to make a difference, she is a comic junkie who'd rather watch a typical Bollywood masala than a Hollywood blockbuster.