The two success secrets to selling your licensing opportunity are building relationships and securing a reference licensee.
Finding the first licensing partner is challenging. They are often the most difficult to get. Sometimes you get started as a result of someone approaching you about licensing. Look for a partner in close geographic proximity so it’s easier to meet with the them. Also consider friends and family as potential candidates for your first licensee.
The Internet is a good starting point for doing a first search. Trade shows are a great opportunity to meet a lot of potential licensees. You can also read trade magazines for a specific industry, such as apparel or toys, and learn about potential candidates. One of the best ways is through word-of-mouth networking at seminars, conferences and trade shows.
Licensing partnerships build on relationships and long-term partnerships. Licensees evaluating licensing opportunities look for two things: an IP owner they like and trust; and an IP with a great chance to make a profit.
The most successful licensor is one is one who is genuine and wants the licensee to make a profit. No one is going to invest the time and money upfront working with someone they don’t like or trust (the same is true when you are evaluating a licensee). Hard selling a license to get up front license fees is not the way to build a long-term sustaining partnership (but it’s a way to potentially end up in litigation).
The second secret is that licensor’s don’t sell licenses, licensees do. If you have an IP with multiple licensing opportunities, such as a brand, character, book, or business process, your first licensee becomes your reference licensee. Other potential licensees want to know if their successful, and speaking to an active licensee will be one your strongest selling points.
The best way to get your first licensee is to offer a sweat heart deal. Keep the licensing fee low (consider no initial payment and royalties only) so it’s attractive for the licensee to get the license and commercialize your IP.
You’ll want to spend time working with your first licensee and helping them make the licensing deal profitable. This partnership also helps you find out about making your IP licensing opportunity more attractive to other licensees.
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