While licensing may seem like a great way to go there are downsides to licensing your product
What is a Licensing Agency
Licensing can be simply defined as a business arrangement in which one company gives another company permission to manufacture its product for a specified payment. Licensing allows you to use the existing production, distribution and marketing systems that other companies have spent time building.
What do You Get In Return For Licensing Your Product?
Calvin Klein is a Great Licensing Example
A good example of a company that takes advantages of licensing is Calvin Klein: roughly 90 percent of the $160 million a year in sales at Calvin Klein Inc. comes from licensing its brand name to makers of underwear, jeans and perfume.
One of the downsides to licensing your product or services is that you settle for a smaller piece of the pie. Overall Calvin Klein generates $5 billion in sales a year and the over whelming majority of that money goes to licensees and retailers.
Next, we will discuss the difference between what services a licensing agency and a design studio provide.
Industrial Design Studio
For instance a full service product design studio will generally specialize in all aspects of product development. Unlike a licensing agency promises you that they will find someone to buy your idea from you, a design studio will help guide your idea from initial concept all the way to manufacturing.
Design studios empower their clients with creative design solutions that will help thrive in a competitive market. Design studios consists of talented, highly-trained professional creatives specializing in aesthetically pleasing easy to manufacture products that are highly patentable.