Licensing Business Today

Welcome to a $109 Billion dollar business

EPM Communications, publisher of The Licensing Letter, states that the retail sales of licensed products in North America in 2006 surpassed $71 billion and sales outside North America topped $38 billion and is approaching $109 billion dollars worldwide. The sheer size of the business is in itself enticement enough for most people who are entering or investigating the business. And with this kind of sales volume, its no wonder that licensing has really caught on with manufacturers, developers, creators, retailers, and consumers.

Product Categories

According to The Licensing Letter, the business is divided into eighteen “product categories.” Some examples of product categories are: Apparel; domestics; electronics; food beverage; home furnishings; health and beauty; house wares; publishing; sporting goods; and toys and games.

Product Types

Additionally, there are eleven licensing “property types.” Some examples of property types are: Art; celebrities/estates; fashion; music; non-profit; publishing; sports; trademarks/brands; and toys/games.

Growth

The business has grown very fast over the past 25 years. It is a business where one single property can generate so much volume that the overall business can be dramatically impacted in just a single year. Examples of that on the character / entertainment side would be Pokemon, Star Wars, Batman, Power Rangers, The Lion King; and Spiderman. And on the brand side, Jeep, Eastman Kodak, John Deere, and Hummer are examples of two great brands that have sold millions and millions of dollars worth of licensed products. The same holds true of Coca Cola licensed products, Anheuser Busch licensed products; and Harley Davidson licensed products among many other well-known brands. And sports licensing such as the NFL, NBA, MLB, and NASCAR perform at the same level.

Benefits for a Manufacturer

For a manufacturer, licensing can be a great marketing tool. Here are just a few examples of the potential benefits manufacturers can realize if licensing is used to its best advantage:

1. If executed and managed properly, licensing can help generate additional sales, gain new customers, and enter new channels and markets.
2. Not only can a licensed product sell on its own merits, it can help sell the rest of a manufacturer’s line by using marketing and merchandising leverage.
3. Many times, margins can be improved with licensed goods, even with a royalty tacked on.
4. Licensing can create additional awareness and recognition for a company and its product line.
5. Licensing offers a manufacturer a way to clearly differentiate their products from that of their competition.
6. Licensing can help enhance a company’s image by being selected as a licensee of a prestigious brand or icon.
7. Increased marketing opportunities are made possible by licensors, and also often come from working with fellow licensees.
8. Manufacturers can use licensing to bring excitement into the market place and to create an “event.”

Licensing may not be for everyone, and not every licensed property is right for every manufacturer’s product line, and vice versa. But the fact is, it is difficult to disregard or underestimate the powerful marketing and sales tool that licensing has become.

If you want to learn more about the power of licensing and how you can put licensing to work for you, just call us. We will be happy to answer your questions.