Things to Know about Fashion Licensing
Licensing is when a brand in the fashion industry grants permission to an organization or company for using its name on merchandise. Apparel manufacturers in USA mostly license their brands. Below are a few things you should know about fashion licensing.
Why Do Brands License Their Name?
Brands who are the licensors often license out their names to other organizations that can produce goods needing special manufacturing and distribution. For instance, sunglasses and eyewear are special products that need special types of production, and they are often distributed in a different way to core products of a fashion brand such as bags, clothing, and shoes. Therefore, the license, under the guidance of the licensor would create the product and then distribute it.
Who Does Actually Benefit from Licensing Agreements?
Usually, licensor is the one who benefits from the royalties that are paid to them by the licensee. They also benefit from brand awareness which is mostly associated with a wider range of products. For instance, you can easily improve your customer base after offering them products such as sunglasses and perfumes for a lower price. This makes the products more affordable to a broad range of people when compared to high-end clothing. The licensee can get money after selling the products that are licensed; when they have a strong portfolio for their brand, they could attract more customers and licensors easily.
How Much Control Does the Licensor Have?
Though this factor often depends on the contract, licensors should maintain a very strong level of control to make sure that their brand is represented properly. For example, in the case of a perfume license, the licensor would mostly work with the “noses” of the licensee for developing the scent. They would also work on how the products are packed and marketed. The licensor would most probably have an agreement and this means that they will have to approve almost everything.
Downsides of Licensing Agreements
When a licensor does not seem to have as much control of their licenses, it can result in the damage of their brands. When Rose Marie Bravo took over at Burberry, they started to rebuild the brand and one of the initial things that were done by them was buying back a lot of licenses. Seemingly, the bran had over two hundred licenses that went on damaging the brand before. They were able to get control of the brand again, by buying back all of those licenses.