Unable to Grasp the Concept of Licensing? This is Your Perfect Guide Let's dive into the world of licensing

By Aastha Singal

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

graphicstock

We all have worn the Disney hats and costumes once in our lives but has it ever occurred to you that it is not the Walt Disney Company that is actually manufacturing these products. However, they have agreed for other companies to manufacture products using its name for a specified payment and that's exactly what we called Licensing.

Licensing could be used as an effective marketing tool if used efficiently. It has become a billion-dollar retail market worldwide. Apart from revenues generated through organic sales and investments, the established companies earn a major chunk of their income by tapping into the revenues of the companies selling products or services under their license.

Licensing Agreement?

Granting a licensing patent allows the business to grow more profitably. Apart from generating additional revenues, the strategy offers multiple advantages in terms of having a better present the competitors, increasing of margin rate and reaching out to people who were inaccessible earlier. This adds up to the USP of a brand.

For a company looking to obtain a licensing agreement, it must be strong in terms of finances, manufacturing and marketing to be able to establish distribution channels as expected by the brand it is paying fees to. For better understanding, licensing fees typically amounts to a small percentage of the sales price but can add up quickly.

Some Inspiring Examples...

Did you know that about 90 per cent of the sales profits at Calvin Klein Inc comes from licensing the designer's name to makers of underwear, jeans and perfume? Its women's apparel lines are the only merchandise the New York-based company makes itself. Many large corporations generate less significant proportions of their revenue from licenses.

IBM, after energizing its efforts to license its thousands of technology patents a few years ago, now attributes $1 billion a year of its corporate sales to licensing. The downside of licensing is that you settle for a smaller piece of the pie. Calvin Klein-branded products, for example, generate $5 billion in sales a year, the vast majority of which goes to licensees and retailers.

Opportunity to Explore More

If you are looking to explore the space more, India Licensing Expo 2019 is a perfect opportunity for you to do so. The serious business-to-business brand licensing show offers a galaxy of possibilities for your business growth and diversification. The expo is a true showcase of numerous licensing opportunities in diverse capacity, ready to be extended in multiple industries.

Offering a great mix from all brand segments, the opportunities displayed can be encapsulated as a special collection under the existing range, or can even be strategically launched as an individual brand in the Indian marketplace. The show also is full of value-adds that enhances the whole experience of the show, comprising of integral theatres, brand spots, character parades, visitor ease out zones, and much more.

Register for the event here.

Aastha Singal

Entrepreneur Staff

Former Features Writer

A business journalist looking to find happiness in the world of startups, investments, MSMEs and more. Officially started her career as a news reporter for News World India, Aastha had short stints with NDTV and NewsX. A true optimist seeking to make a difference, she is a comic junkie who'd rather watch a typical Bollywood masala than a Hollywood blockbuster. 

Business News

Elon Musk's xAI Claims Its New Grok 3 AI Is Better Than ChatGPT and DeepSeek: 'Seeing the Beginnings of Creativity'

xAI debuted the new AI on Monday, claiming it has 10 times the computational power of Grok 2.

Business Ideas

70 Small Business Ideas to Start in 2025

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2025.

News and Trends

5 Things to Know About Zomato's Nugget AI

With the Indian conversational AI market projected to grow from USD 274.5 million in 2022 to USD 1.03 billion by 2029 at a CAGR of 24.58%, Zomato's entry into this space aligns with broader industry trends

Business Solutions

Get a Lifetime of Powerful PDF Tools That Won't Give You a PDF Headache

Banish frustrating PDF issues forever and just breeze through all of the old problems with editing, formatting, converting, annotating and more.

News and Trends

Gen Z Leveraging Fintech to Fuel Aspirations, 2025 to Have Increased Demand for Capital: Report

Borrowing patterns last year are also poised to influence habits in 2025, with Gen Z increasingly using lending solutions such as mPokket, Slice, and the like.

Growth Strategies

Volvo Cars To Change Customers' Perception Of EVs: India MD

For Volvo Cars, it's not about market share. It's more about how do we change the mindset of people to buy more electric cars, says Jyoti Malhotra, MD, Volvo Cars India