What is a licensing agent?
The licensing agent definition is valid for a person who undertakes assignments on behalf of their clients, such as identifying potential licensees for the property of licensors, representing licensors’ property in trade shows, presents proposals and properties when negotiating the terms of sale agreement. Licensors who do not want to take the hassle of performing these tasks hire a licensing agent.
A licensing agent also assists licensors in developing their properties to become more lucrative for licensing. The licensing agent reviews samples of licensed products and collects payments, including royalties, on behalf of their client, the licensors.
How do become a licensing agent and what are the benefits?
Licensing agents can be a part-time job. All one needs is an internet connection, skills, and a positive attitude. The concept is simple for licensing- one creates an idea, submits it to companies, and is paid for that product selected for manufacturing and retailing.
It is a low-risk, low-cost business as no one can collect royalties anytime and anywhere simply by idea imaging. As innovation grows, often open-ended, companies are looking for ideas. Numerous industrial designers and other inventors have made licensing a numbers game.
The majority of inventions do not make money. Individuals do not know how to market their ideas, and they also do not have the steps required to license their ideas. Licensing agents help bridge the gap and ensure that both licensors and agents make money.
The advantages of licensing are that they offer something different from the competition and better returns. Secondly, retailers take a second look once the product is licensed and manufactured. Once this happens, then it becomes easier to sell the rest.
Role of licensing agents
- Assignment – A licensor generally agrees with a licensing agent because they are confident of the agent’s skill in handling his products or services.
- Agents objective -The agent will have clear territory areas of the properties they will represent on behalf of their client along with jurisdiction.
- Exclusivity- Most agents work exclusively for a client, and they are entitled to commission from the license for the contract period.
- Term of agreement- Usually, the license agents prefer a minimum of two to three years to develop the property, search for licensees, generate revenues, and earn royalties.
- Control and ownership- Property ownership is always with the licensor, and they have the right to approve license terms with the agent. The agent is only involved in the communication and payment part of the licensor.
- Agreement termination– The licensing agent does not guarantee property/ product/ service success. However, a licensor can terminate the agent’s role if a late or no royalty payment is late. Also is late if the agent enters into a secret contract unknown to the licensor.
Conclusion
A licensing agent ensures that products enter the market easily and quickly, which others have taken years to build. They act as a channel and help the products to generate revenue. In return, a licensing agent gets a percentage of the revenue as commission for the services or products that have the license.
