You’ve got great ideas, but you don’t have the time, inclination or reach to take them to market – but you can still have a viable business through product licensing. This is particularly true if you’re a prolific artist or inventor and want to obtain the broadest possible reach for your creations.
Handing control over your product to someone else for development and marketing can be a little scary. If you’re careful, however, those royalty checks will start rolling in sooner than you expect!
So what are some of the most important things to keep in mind when you intend to license your products to someone else? Here are the basics:
Protect your product and ideas
Patents, copyright and trademarks all have their purposes, and you want to make sure that you retain authority over your work as much as possible. Find out what legal protections are available for your ideas and creations before you start approaching potential partners.
Research your potential partners before you sign any deals
It can be tremendously exciting to start talking deals with a marketing partner – but you need to look carefully before you sign on the dotted line. Ask yourself important questions, like:
- Does this potential partner have an established licensing program? What sort of success have they had?
- Does this company have a good reputation among both consumers and partners? What type of fanbase do they bring to the deal?
- Does this company connect with your target market? Will they be a credit to your designs and give them the exposure they actually need for success?
Understand what you want out of the agreement
You don’t want to give a marketing partner or licensee too much authority over your ideas without getting what you want in return. You can negotiate details like:
- The royalties you’ll receive per sale (which can vary a lot based on the partnership)
- How often royalties will be paid and what happens if they are late
- How long you will allow your product to remain licensed
- What will end the licensing agreement prematurely and the procedure for doing so
Whether you’re entirely new to the licensing process or you’ve done it once or twice in the past, experienced legal guidance can help you avoid critical errors and negotiate the best possible deal for your growing business.