4 Questions To Ask Before Choosing Your Next Licensing Agent
Licensing agents play a major role in planning and implementing licensing programs locally. Their assistance is particularly useful if a brand is new to licensing or seeks to expand into a new market or product category. On the other hand, their support is essential when your licensing workload looks overwhelming. In such case, a licensing agent may also take responsibility for helping you choose the right licensee for a particular licensing program and validate the reception of products by local consumers. In addition, per the results of negotiation, they can also aid with product concept reviews and approvals.
The commission percentage usually paid to an agents ranges between 30% to 35%. A fixed rate is calculated from the royalties reported by brand. Collaboration with licensing agents lends brands a helping hand in administering their licensing program, connecting and negotiating deals with licensees, and possibly even managing product development. If you decide to hire a licensing agency instead of an individual agent, or consultant, you will gains access to an entire team of local professionals. Their job is to assist your team and work closely with the licensee in a specific region.
Even with the best agent, however, certain duties and costs remain with a brand. Typically, those are the costs of protecting and defending trademarks, design governance, and integration of marketing and sales. Since collaboration with a licensing agent frequently implies exclusivity for specific territory (-ies), it’s necessary for a brand to confirm that the prospective candidate is the right fit for their needs. The best way to do so is by asking the following questions:
What is the general competence level of a licensing agent?
The work of a licensing agent is incredibly dynamic. Their job is to find unique licensing opportunities in the market before your competitors do. In this connection, agent’s experience and network should be seen as the top criteria of choice.
Managing timelines is one of the core challenges of the licensing program. Thus, agents should be competent enough to hit the ground running from day one. To maximize the effectiveness of onboarding an agent, your team will want to ensure that they have experience of licensing in the desired industry. A big plus to the candidate is their understanding of the specifics of your business, your target audience, and the product categories chosen for the licensing program. A sure way to validate an agent’s experience is to check the references from their previous clients. If those clients verify that the agent’s work was productive, you might have found a suitable candidate.
Are they a quick study?
A competent licensing agent is agile and quick in learning new things. Whether it’s a one-person company or a multiple-department agency, they should be generally savvy. Their team should also be able to get along with your team to secure a smooth collaboration.
Be mindful of the fact that an agent’s success will also largely depend on how well they communicate their objectives of being your strategic partner. Before the start, you might want to recall the major licensing goals and measurement metrics. After that, go ahead and should introduce an agent to your business and ensure their comprehension of your brand’s core needs in licensing.
What is your agent's commitment level?
Think about an agent as brand’s bodyguard. They will be supporting your business and mediate between your team and other licensing stakeholders throughout the licensing journey. Therefore, you need to focus on finding a professional that is ready to devote both their time and efforts to the licensing program.
Decent compensation for the work is one of the key factors that will affect agent’s work. There are multiple bases for remuneration of agent’s work to choose from. It’s a good practice to seek a balance between the retainer and commission fee to foster the agent’s motivation.
Is your licensing agent trustworthy?
Brand licensing a business that requires a high level of trust between all involved stakeholders. The partnership of brands and licensing agents isn't an exception to the rule. Certain factors may negatively affect the outcome of your partnership. Such factors include bad consumer experience, a shift in the brand’s priorities, personnel changes, or communication breakdown. Much of the agent's core duties will require them to represent your best interests. Thus, it's crucial for the seed of trust to be planted on the very first day of your collaboration.
Don't worry if you end up still seeking the right consultant, or agency, after answering the questions above. Rather than finding a quick fix, it’s more important to stand by the values and standards that matter to your brand, especially when it comes to the work that the prospective agent has to perform. To establish those significant factors, you need to take another look at your brand's core objectives in licensing.
The ultimate, and honest, question you should be asking before sealing the deal with their to-be licensing agent is:
Will they save you time, support your local partners, and bring in cash?