Latest / The Empire of Wealth / How Licensing Really Works (And How to Land One for Your Brand

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How Licensing Really Works (And How to Land One for Your Brand · The Empire of Wealth

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  Speaker 1: What if I told you that your brand could be
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  loved by millions of people just with one product launch? Well,
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  it can, thanks to licensing. Licensing has been one of
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  the key reasons for the Udi's success, doing over $ 100
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  million in famous licenses such as Disney, Warner Brothers, Nickelodeon,
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  even Pokemon. In this video, I'm going to go through
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  exactly what to do and what not to do so
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  that you can launch licensing for your brand. Doesn't matter
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  if you're a tiny brand and you're just getting started,
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  these tactics can work. But it's really, really important that
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  you understand all of the risks with licensing as well,
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  so that you don't actually lose money rather than make it.
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  At the end of 2020, I was really trying to
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  figure out where I could take the hoodie. At that point,
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  I'd created all the prints myself using meme culture. Every
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  time I would see memes pop up, such as avocado
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  on toast, there was a famous politician that said, Australians
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  should stop eating avocado on toast that they could save
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  on a home loan. I would launch that hoodie and
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  it would connect with those people. Same with the sloth
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  reading the book. People could just understand who that hoodie
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  was meant for. But I was running out of ideas
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  and I didn't know where to take it. Then we
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  decided to start working with Warner Brothers, one of the
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  biggest licensors in the world. Growing up, I was a
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  huge Friends fan. I used to just watch Friends nonstop.
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  And I thought it had the perfect affinity with the
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  Udi because people just love watching TV in their Udi.
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  Warner Brothers also had Harry Potter, which I was also
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  a big fan of. So naive to what was going
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  to come next, we decided to just grab these assets,
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  put them on the Udi and do our first license launch.
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  Still living with my parents at the time, I remember
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  launching it and we did over $ 500, 000 in just a
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  few weeks. Completely selling out. If I actually knew how
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  to do inventory management back then, it could have been
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  a lot, lot bigger. You see, licensing is the process
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  of borrowing another company's IP and aligning it with yours.
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  Let's say, for example, you have a T-shirt brand. You
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  could contact anyone from Coca-Cola to Disney, even a celebrity,
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  and ask if you can use their assets or their
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  likeness to support your marketing or your product development. You
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  can either sell it on your website or sell it
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  in other places, and then you just need to pay
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  them what's called a royalty. There are also so many
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  different types of licensing that you can do. For example,
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  you might've seen the word Gore-Tex on a lot of
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  outdoor equipment. This is actually a company that creates a
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  material that is really, really trusted. Even Nike is putting
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  Gore-Tex on their sneakers because people love the material so much.
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  And it helps align a reputable brand like Nike known
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  for its quality to another reputable brand known for its quality.
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  There's also other forms of licensing, like music licensing. For
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  those that are old enough to remember, you might remember
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  the Cadbury ad, where there's the gorilla playing the drums
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  to In The Air Tonight. And finally, those that are
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  Alex Hamosi fans, he talks about licensing his actual marketing
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  framework to gyms all the time, taking his business to
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  a small business, allowing it to scale up to lots
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  and lots of gyms. For the Udi, we did this
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  really creative Nutella campaign where we would get people to
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  buy jars and they can win one of 500 Nutella Udis.
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  People would be going through the shopping aisles and seeing
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  the Udis printed on these Nutella labels, aligning our brand
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  with their really lovable, delicious brand. People would then go
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  to the website, sign up, and would be able to
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  capture email marketing leads as well. There is really no
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  limit on licensing and it depends on how creative you
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  want to get. But it's really important that we understand
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  why branding works. Sure, there's the emotional connection part. These
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  brands have built so much emotional connection over the years
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  that you can now leverage on your product. After all,
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  branding is earned in drips and lost in buckets. And
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  these people have just been collecting drips for so long.
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  But there's actually a technical element, something that a lot
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  of people are underestimating in the e-commerce community. The best
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  analogy for licensing is phishing. Let's say every ad you create,
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  let's say it's a Facebook ad. You're casting that ad
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  out there and you're attracting one type of customer. Licensing
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  is pretty much changing that bait so you can attract
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  two types of fish. You've got your initial customer audience
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  that might like your product anyway, but then you've got
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  this whole nother audience that is really attracted to your
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  product as well. So you're basically merging the customer audiences.
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  This is why licensing is so important on digital ads
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  because Facebook is able to find these new pockets of
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  audiences that it can target your product to, bringing them
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  over into your corner. But the problem is not many
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  people know how to do licensing. I certainly had no
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  idea how to get it started. But before I teach
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  you that, let me firstly do a shameless plug about
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  our new mentorship program. No, this isn't a course. No,
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  this isn't applicable for people doing under a million dollars revenue.
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  I've got a free discord for that. You can get
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  all of your information free. I'll leave a link for
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  the description for the discord. But my new mentorship is
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  called Daily Mentor, where we're going to be going over
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  this stuff. Product development, inventory management, cash flow forecast, all
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  of those kind of things. What are the best licensing
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  partners to reach out to for your brand? We're currently
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  waitlisted at the moment, especially for our Australia-based groups. Definitely
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  send me an email, click on the link below, and
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  we'll get you on the waitlist. Alrighty, back to it.
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  So the first step is identifying your ideal licensing partner.
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  There are so many different ways to achieve this. The
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  one that I think you should do is go to
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  a brand that you look up to that shares a
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  similar audience to you and look at the licensing partners
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  they've collaborated with. That doesn't mean you need to do
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  the exact same licensing partner. Remember the analogy of phishing.
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  You really want to get these new audiences, get something
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  new in front of them and align your brands. But
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  you may want to do something similar. For example, if
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  they've done a Bluie license, one of the biggest licenses
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  in the world right now, you might wanna do a
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  similar kids show as well. The other thing I recommend,
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  if you're gonna try to work with one of the
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  major studios, there are gonna be some limitations on that
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  around your size, which I'll get into in just a minute.
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  But a great way to pick your licenses if you
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  are working with them is just looking at the upcoming
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  movie launches. For example, our Barbie collaboration was one of
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  our best because they did such a great marketing effort
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  and the movie was so good and we just dropped
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  it at the perfect time. Another great way to find
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  awesome licensing is heading over to Vegas, no, not to party,
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  but going to one of the licensing expos over there.
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  There'll be a lot of booths that you can go up,
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  learn more about niche licenses or big licenses, and you
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  can actually get contacts there. One of the main things
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  that will determine whether you actually get a response from
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  a lot of these licensing is size. So Disney and
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  Warner Brothers, they have so much legal paperwork that they
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  need to go through that they're not going to profit
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  if you're a really small brand. This is when you
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  need to niche down. Worst of all, you're probably not
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  going to profit because of what we call a minimum guarantee.
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  This is really standard in the industry. What that means
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  is to protect the collaboration, these major licensors will set
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  a minimum amount that you need to sell. Let's say,
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  for example, your royalty is 10% of your sales. You
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  may go to this licensor and say, I'm going to
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  sell $ 500, 000 worth of product. They might want to go, okay,
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  I'm going to set the minimum guarantee at 40,000 because
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  you're saying you're going to sell 500,000, which would be
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  a $ 50, 000 royalty because you're paying them 10%. But we
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  really need to hedge our bets and we're going to
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  put a minimum guarantee at 40,000. If you failed to
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  launch the product or failed to sell as many as
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  you forecasted, then you are going to be up for
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  that extra 50,000. Imagine if you didn't launch any product
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  because it didn't work out, you would still be up
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  for that money. This is why working with really niche
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  licenses and contacting them in the initial stages is really
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  beneficial because they're probably gonna have really low MGs or
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  maybe no MGs at all and they just really wanna
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  work with you. This is why I encourage you to
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  think outside the box with your licensing collaborations. Casetify, one
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  of the direct-to-consumer e-commerce darlings did an amazing collaboration with DHL.
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  I'm pretty sure Supreme even worked with DHL. If you
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  can align your brand properly, you'll be rewarded for this creativity.
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  So now you've identified your license, you really need to
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  contact them. So if you're at the Vegas trade show,
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  you're going to get a card, which is great. But
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  if you're just reaching out on LinkedIn, you've really got
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  to sell yourself. These people would get so many messages.
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  Sometimes these brands do have portals where you can actually
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  submit it. If not, just contact the founder on Instagram.
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  Just send them a mock-up product that you've created of
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  the overlap of your brands. And make sure you say
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  what you think you can sell. Get them really excited
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  about the collaborations. Another big part of this process is
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  actually creating a forecast, as I mentioned earlier. When I
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  was starting the Oodie, I had no idea how to
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  create this, but it is really important if you're working
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  with some of the bigger licenses, they're going to want
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  spreadsheets of like exact sales that you're going to be
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  able to do. And it can put a lot of
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  stress on a lot of your teams, such as your
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  product team, your operation team and your finance team. So
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  make sure you're ready. And then the final step is
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  the funnest part, which is where you're collaborating. For the
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  more established licenses, you'll get access to what they call
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  a portal, which is just all of their assets. You
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  can scroll for days through these things, and you can
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  talk about them, about adding them to your product. Then
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  you need to put a great marketing strategy together. The
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  marketing is key, and a lot of these licenses will
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  actually need to approve every single email, every single product,
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  every single product image that you're putting their brand on,
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  which makes sense. They're trying to protect it. The execution
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  of all of this process is really important. You need
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  to be professional. The better you execute, more that they
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  will want to work with you. About a year and
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  a half we saw the Australian Football League was selling
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  a very similar product to us. We went to them
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  and said let us do it, let us see if
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  we can do it better. We custom designed every single
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  team mascot and put it on the Udi. We even
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  set up these fun interactive booths outside of the stadium
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  where people could come and win Udis and sales were
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  incredible and now we're just extending with them because it's
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  going so well. Licensing is a whole lot of fun
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  and I hope more e-commerce brands adapt it earlier. Don't
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  forget to like and subscribe.