Over the last seven days, I went to the pediatrician five times. Incredibly exhausting physically and emotionally, but the whole time I was burning a trail to the doctor’s office, I kept thinking to myself, “Thank God I have a licensing agreement with Summer Infant!” Otherwise, my company, 2 Virtues Inc, surely would have gone under by now. It is a near-impossible juggling act trying to grow a business and a family at the same time–something or someone, always gets the shaft.
I have recently had the great fortune to work with a few women by way of my Coaching by Email program. These women have fabulous products and have already achieved success by any measure. But these women also have families and have begun to feel the strain of being a “one-woman operation” and a mother trying to do right by her children. I have started to notice a “theme” and it seems to be “I’m tired of this insanity and I want out!”
From my own experience, I know that licensing is the best way out–you ditch the workload but enjoy the profits. Licensing, it seems, is the Holy Grail for mom entrepreneurs.
Licensing: How it works
When a company licenses your product, they take over the manufacturing and distribution (sales) of your product. A license agreement also gives them the right to any patents and/or trademarks you hold on your product.
The company that licenses your product is called the licensee, and they pay you royalties on any sales of your product. Typically, royalty rates are 3-10% of sales.
A license agreement is usually for a set period of time, like 5 years, and at the end of the agreement, the company may either renew the agreement or have first refusal.
Since you’re the expert about your product’s features & benefits, you will usually consult with the licensee to educate them about your product and then retain some involvement with the process throughout the agreement.
For mom entrepreneurs, a licensing agreement is a great deal–it offers the gratification of seeing your product taken to a larger “audience”, handsome royalty income and essentially, none of the work!
Here are a few juvenile product companies that accept product submissions for licensing consideration:
Pitch Your Product for a Licensing Deal in 5 Steps
1. Do your homework! Before you even consider contacting a company to discuss licensing opportunities, make sure you do ample research on a handful of companies that seem like a good “fit” for your product. Know who their key people are, their product assortment, their target market/customer and their current distribution channels. It is also helpful to read their press releases and financials (if they are a public company) for the latest news on them–you can learn a lot and sometimes even see where they are “headed” by doing this and it can work in your favor.
2. By letter or email, introduce yourself and your company in 2-3 sentences.
3. Describe your product, including any awards, press and noteworthy sales figures in 2-3 paragraphs. As mothers who have invented products, we sometimes assume that everyone wants to hear every blessed detail about how we dreamt up our big idea–not so! Keep it short, targeted and professional.
4. State why your product would be a good “fit” for this company. Give specific details like, “I recently read that you are expanding your line of nursing products and I believe my nursing cover could significantly increase your profits in this category.”
5. Ask for a meeting & follow up! Let them know that you are interested in discussing licensing opportunities and that you would like to meet with them. Tell them you will follow up in a few days (by phone or email) and then DO IT!
This article was written by Heather Allard, The Mogul Mom. She offers email coaching to help creative moms get their products developed, distributed, and licensed. She also offers copywriting and marketing assistance.