While taking a nice long shower, an epiphany shoots through your head: “I want to create dog shower-caps…” Sure it’s a novel idea and there might even be a few people interested in buying them, but is it worth licensing your “dog shower-cap” idea? Well, you’ve come to the right place reader, because these are the benefits of licensing your product idea. Even if your product origins are a little boring...
What is Licensing?
That’s a reasonable question, licensing in basics is “renting” your idea/brand/process to another person/entity to use for a fee. Sometimes the licensing agreement will also include how long the license period is, the minimum amount of orders the person buying the license should make with the creator’s idea and what amount of profit the creator is entitled to.
Why Should I Sell My Idea?
As George Lucas said, selling the Star Wars rights felt like “I sold them to the white slavers”. If you are the creator of an idea, process or franchise you are probably going to be pretty emotionally invested in your creation. But just like Lucas, licensing also means tons of moolah, clams, deniro (not the actor, the Spanish word) or as it’s more universally known: fat stacks of cash.
Although George is complaining, he’s doing so with 4 billion more dollars in his bank account, and that definitely takes the sting off losing the rights to an astoundingly profitable idea such as Star Wars. Honestly, that probably would soften the blow of selling your actual children to Disney.
Another benefit to licensing your product idea is the ability to scale it up without having the necessary resources to do so, while still retaining the brand being scaled up. For example: Although Lucas undoubtedly had the cash to produce another Star Wars film he probably didn’t have the Lucifer-ian legion of Marketing and Advertisement execs or the World Bank like budget Disney has available to it to promote the film.
If Lucas hadn’t sold the rights to his franchise but licensed it, he would retain the brand ownership, and once Disney spent the budget of a small country on distributing and marketing the film, Lucas’ would still own Star Wars and reap the benefits from all of Disney’s marketing efforts. But he didn’t…so boo-hoo Lucas.
The 50 Shade of Grey Paradigm
Although not exactly a product and more of an (un)-intellectual property, the book series 50 Shades of Grey is a good example of licensing (also quick money grabs as a result of incomprehensible popularity). The author E.L. James retains the rights to the books, but has licensed a movie, board games (yes, board games), underwear, lingerie, robes, pajamas, tea, nail polish, teddy bears, infant-wear (yes, infant-wear), sexual aids, paddles, whips, handcuffs, wine, jewelry and even detergent…to name just a few.
Good grief this lady will shamelessly slap the name of her book on anything that has a label, actually that’s not even a requirement. So she makes royalties from the sales of the merchandise and still retains ownership of the brand name and books.
See Also: How to Become Famous as a Crappy Writer
Do you know any other benefits of licensing your product idea? Let us know in the comment section below.