My licensing agent, Julie Turkel, is back for another riveting conversation. If you didn't catch our first episode, you can listen or read that one here and learn about how Julie got her start in the world of licensing (it's such a fascinating story and involves Jonathan Adler and Nate Berkus!). In today's episode, we're talking about how an agent/designer partnership works—how to find an agent, who does what, etc. We also break down the steps of the licensing process.
If you're a creative and want to get more passive income streams, I strongly encourage you to consider licensing. And if you want to get serious about jump starting your licensing career, check out the course that Julie and I co-teach called Brand Plus Brand!
In the licensing agent/designer relationship, what are the roles and responsibilities of each individual?
Julie: (02:34) The designer is the brand owner and so they are responsible for being kind of like the owner and marketer of their brand. In your case, you're responsible for trademarking your brand name. I know that you've shared about the conversation that we had when we started working together about changing the name of your brand and then you had to trademark it and the trademarking process is probably a whole other conversation. But if there are product categories that you're hoping to get into and they need to be trademarked in order to license them, the brand owner is… one of their basic responsibilities is to own that mark and make sure that you have it across all categories that you want to create products in. And in territories where you want to create products as well because for different international territories it's like very dire that you own your trademark and others it's probably less so.
The designer or the brand owner, in your case, you're responsible for creating the design and having that design vision. So when I find a potential partner for you and they want to create products, whether you're a surface pattern designer, which is kind of like where you fit into, you've got to have the patterns ready to send over to the licensee. And whatever ways in which you need to do that, whether you're doing it all on your own, whether you have a design staff or you use freelancers or whatever technological solution you have for giving artwork to licensees, you're really responsible for making sure that that system works.
And if it's not surface pattern based… let's say you're an influencer or a blogger or whatever and somebody wants to create a line based off of this huge audience that you have and maybe a look and feel that feels right to you or maybe you do food or something like that.
One of your main responsibilities is kind of knowing what your brand is all about and how that would manifest into product. And in the Brand Plus Brand class, one of the main takeaways from that class is the brand presentation deck—that's a template that's included in the class that we co-created. And for those of you who are listening and don't know what we're talking about, Jenna and I launched a class on licensing that's online and it's called Brand Plus Brand. And I share a lot of my trade secrets and information in that class. And there's a template that I think is very important for most brand owners to have… I guess the bottom line of what I'm trying to say is that as a brand owner, you're responsible for providing to me as the agent the materials that I need in order to be able to pitch.
Julie: (05:51) And so the brand presentation deck that we have included in the class is one of the templates that I use for my clients. That is a really pretty common format that most agents and most companies that take licenses are used to seeing. So you're responsible for providing those kinds of materials and then marketing your brand is a main responsibility of the brand owners. So, if you market through social media, then you've got to keep doing that. If it's trade shows that you like to go to, it could be a combination… If you're on television… whatever your vehicle is for people to get to know your brand and recognize your brand, you're responsible for kind of being, you know, as the agent, I might collaborate with my clients and recommend certain tactics, but really it needs to come from the brand owner. The cost is typically on the brand owner… if it costs money then it would be typically on the brand owner to absorb those costs.
In terms of what's on my plate as a licensing agent, I'm the one who's going to be out there as a champion for my clients' brands. I'm a Crusader, I think is a term I used to always feel like I am a Crusader for my clients and singing their praises and kind of finding every way possible to reach people who I think would want to license their brand. I pretty much identify a strategy. I work with the client to make sure that they're on board…
There's a lot of collaboration that happens when you get up and running with a client. As the brand owner, you might have ideas of what kind of products you want to create. As somebody who understands the market and the realities and what it would take to get into those categories, I would bring that knowledge to the table. Together we would come up with a strategy for what we want to create. I would make a request to the brand owner what of the materials that I would need in order to pitch. And then I go out there and I pitch and I find the companies, I introduced them to my clients. I'm responsible as an agent for all the negotiations of the deals between my client and the licensees. I manage those deals on the business side. So if issues come up and it inevitably they will… i.e. A designer not meeting a deadline or a look, a retailer wanting a certain look that they have to convince the designer to go with or there could be some things that come up with a territory they want to get into that they're not licensed to sell that I would need to check and make sure it's okay.
Whatever it is on that side is sort of mine to field. And I act sometimes as a buffer between the client and the licensee because that relationship needs to be very positive or it should be very positive and sometimes the communications can go awry and I'm there to kind of help manage that.
And I collect the royalties. I look over the statements and I disperse royalties and make sure that the statements comply with what the contract says that it's computed correctly. And then I disburse the payments to my client. Not every agent does that, but that's how I work.
Related: A Chat with My Licensing Agent, Julie Turkel
What do agents typically look for in their clients?
Julie: (11:11) There are all kinds of brands that have agents. There are corporate trademarks like Coca-Cola, that would have… actually, I don't know if Coca Cola has an agent now, but probably at one point they had an agent. A lot of the car companies, like BMW has a licensing agent. It's not a core function of the BMW brand. They're in the world of corporate trademarks. Not that I want to get into this too much, but in certain kinds of markets, like the biggest drivers of the licensing business or corporate trademarks and entertainment, entertainment brands. And I think I said this in the last episode of the podcast as well. Sometimes those kinds of brands will, even though they're humongous and have a lot of staff, they might hire a licensing agent.
And I guess the reason why I'm mentioning it is because part of the reason why somebody might hire a licensing agent is because the company wants to focus their resources on their core competencies and delegate something that they don't really want to build a whole department out to. They don't want to do a whole develop and building out a whole department dedicated to the licensing function. Maybe it's not totally core of the business or it's just they've decided that it's just best to outsource it. And so those brands can hire a licensing agent and there are a lot of agents in my business that loved those kinds of brands like Coppertone and Snapple and things like that have big licensing businesses.
On the design side, which I know is what we're really most interested in. Anybody could hire a licensing agent and I guess really it does come down to the question is what would be the reason why the agent would take on your brand at whatever stage you're in? I think the main things that agents are looking for in the brands that they hire or that they decide to take on would be: Talent, recognition… and sometimes brand recognition, sadly enough, can sometimes supersede talent. And resources. I look for businesses that are already kind of healthy in and of themselves. I do get a lot of inquiries from people who are, maybe things aren't working out so well in their business and they are looking to license it as a way to minimize the cost of running their business in the way that they have. And sometimes that works if you build some traction, but if your business is not doing well, it's not a great platform to build out on.
So you know, I'm kind of answering all the questions all at once, but I think the bottom line is that, there's probably an agent for every category of brand type out there. There are people who represent influencers. There are people who represent small artists that are just super prolific and maybe don't have a lot of recognition, but just have a huge library of work that is, let's say, Christmas is a huge thing. Seasonal art is a huge thing. So if you have a ton of seasonal art work, there's probably an art licensing agent out there who would want to have your portfolio in their mix of tons of artists that they represent.
And actually I should clarify that, cause I do think a lot of people that are listening to this podcast probably fall into this category. Those kinds of agents—art licensing agents—do tend to take on tons of brands and throw it up on the wall to see what sticks. So if you have a lot of breadth in your library and you're continuing to add to it, you probably have a pretty good shot of finding an art licensing agent.
Julie: (15:03) For me specifically, I tend to want to represent designers that have more to it than just that—people who really are looking to build a lifestyle brand and have more to the story than just the art alone. And it's not even… I'm selective in part because I don't want to have tons and tons and tons of clients. I want to just have handful of them that I focus on, but also I don't really understand art licensing. I don't have that knack for like, Oh my God, this would be great on a Christmas card. Like I just don't, my brain doesn't think that way. I think more of like, what are the trends that are going on in the market? How does this person's design fit into those trends? And can I personally stand behind it? Do I love it? And can I tell this? Can I see the story unfolding in my mind when this person presents their work to me?
Another thing that's really good sign is when somebody comes to me and they either have a license in hand or they've already done some licenses and agents really love people who come to them who already have experience in licensing and have people who want to sign more licenses… that's a big draw.
Jenna: (16:25) Yeah. Good points there. And I liked that you brought up the breadth of somebody's library as being something that can attract agents or even manufacturers. If you're listening and you're like, Well, I don't have thousands of followers on Instagram or these stories in the press on my brand or anything… my audience is small. But if you can focus on like really just adding a lot of artwork to your library, that's an asset you can bring to the table. And obviously building your brand and building your recognition while you're doing that is not going to hurt.
Where can someone find a licensing agent?
Julie: (17:39) Well there's a trade organization called LIMA (now called Licensing International), which is the trade organization for the licensing industry. And I think this came up when we were doing the Brand Plus Brand class. There's not a directory of licensing agents that you can have access to without joining LIMA. I don't think they do, but I think that if you called them, they might point you in a good direction.
There is an annual trade show for the licensing industry. It's called Licensing Expo. That's in the US and it tends to happen in Las Vegas in May. Go to the show or if you can't go to the show, if you could find somebody that you know that's going to the show that can pick up a directory for you, that's another way to find a licensing agent.
Some licensing agents exhibit at Surtex. It's actually most suited for the kinds of brands that like to do one-off commissions or where a company might want to buy one piece of your artwork. And it's a lot of holiday and seasonal there. That's a big focus. So there's a section of licensing agents that exhibit at Surtex and again, if you can get there, it's in New York City and it happens in early February. If you know somebody who goes to the New York Now show or goes to the stationary show or Surtex and pick up a directory for you there, there might be a few agents in there.
In Brand Plus Brand, we included a list that I obtained from a blog that was from 2009, but a lot of those companies are still in existence that are on that list. And to be honest, I'm kind of working on a solution for this lack of cohesiveness and in the licensing industry, I'm hoping somebody, maybe possibly me, will solve that issue. But those are some good pointers. There's also a couple of trade magazines like License Mag is another… There you might find some information on agents. There might be like an issue of licensing agents.
What are the stages of booking a job or signing a deal with a manufacturer or retailer?
Julie: (20:28) The flow of what would happen if you have an agent is how I'm going to answer the question. Sometimes it's something that I source, sometimes it's a referral, something that comes into my client as an inquiry. And what's really important, and I've got to say this because if you do have an agent or you're about to hire an agent, or you're thinking of hiring an agent… It's really important if somebody inquires about licensing or something that you may think has licensing components or could lead to a license that you forward it directly to the agent. Because if you start having conversations directly with this company you might steer the deal in a certain direction or have a misunderstanding about… You might agree to terms that are not agreeable. Things just may start heading in a direction that isn't in anyone's best interest. Even if you think it's a small thing or a quick thing, hand it over to the agent because then you're not having to backtrack or play catch up or whatever.
So an inquiry comes either to me, to you, however it comes in. I'm the one who asks all the questions and just gets all the details and information about about the opportunity and it depends on what it is, but if they're based locally and if I don't know the company very well, I might meet up with them first, get a sense for whether I think my client can work with them.
And it depends on who's pitching who. If I'm pitching the licensing opportunity, the information that's being exchanged is like the brand book, the materials that the client is providing to me are going to be things that are sent out. If it's the other way around, they're usually sending me information for review and I might follow up with the brand presentation or more information on the client that I'm working with. But it may not be necessary because it's assumed that if they're contacting me, they're already sold and they want to sell me on their company.
The bottom line is I bring the brand owner (my client) in when I think the time is right—when I think it's time for me to get their feedback on whether they are interested in this opportunity and I've already kind of gotten a sense of whether it's financially worth it, whether the terms are going to be something that I would recommend or that I know that my client would agree to.
Julie: (23:17) One thing that's really important..if you're in an initial conversations with a company and let's say they might ask you something like, I think we have a retailer that would be interested in five of your patterns. Can you send them over to me so I can do a presentation? It's very important at that stage if that happens and if you feel a level of comfort with it that you don't send over high res artwork or that if you do end up sending it in some kind of digital format that it's got a watermark over it or there's some kind of way that you're protected because if the deal doesn't work out, you do not want to be exchanging files and give them anything that belongs to you.
But typically I work out all the business terms. I negotiate the deal. I make sure my client's comfortable with it. I usually just send a contract for them to sign and once it's signed, then it's time to really put, really put the client in touch with the company and they start exchanging files and collaborating on developing products. And at that point I tend to just kind of keep an eye on the communications. That's when it's time for me to step back and for the for the client that I'm working with to really get involved in the product development process with the licensee.
And usually there's some, I'm sure you know, Jenna from your own experience, some concept renderings come to you. You approve them. I may look at details that you're not inclined to look at, like is your social media handle on the packaging? Is your copyright information on the packaging? When I'm looking at it, I'm like, Oh, that's very cute and then I'll just check over some small details, but approvals go. And then the sad thing about my job is that once the preproduction samples are created, I rarely get to see them and production samples. It's a great day when somebody sends me production sample of something, but you get to see all the fun stuff.
Jenna: (25:43) True. And I mean as the designer, the creative part, kind of the part where Julie was saying she steps back. There's a lot of back and forth. Sometimes the manufacturer or the brand that we're working with is really like, we nail it in the first try. But other times there's feedback and there's revision rounds and then there might need to be a followup call to really clarify going forward, okay, I know this is a lot of revisions, but we just need these tweaks and then we're good or whatever.
How is payment collected and negotiated?
Julie: (26:41) So you brought up the most important part, which is, how are you making money off of this? First of all, it's standard that once a deal is signed I trust that the licensee is going to live up to their obligations. But typically there's a payment due on signing and in a perfect world, no artwork and product development would begin until that's happened. But, we all go on good faith. So typically a license, it could be…we've worked on a lot of buyouts with art where you just get a fee and we worked in licensing situations where you get an advance on signing and then it could take, especially with some of the manufacturers that are working in the mass retail channels, they're working on timelines that are so far out. So I know, you know from your experience that, when we signed one particular license, we signed it last year and everything's going to start shipping at the end of this year. So we're looking at 13 to 18 months before royalties start coming in and they are typically reported at 30 days after the close of the quarter. So they should be coming in quarterly, but they're not the day the calendar quarter ends… Usually 30 days after the calendar quarter ends.
Jenna: Got it. And like you were saying in the beginning, too, we've done deals where it's been a buyout where we've just done an upfront fee and no royalties. I know we did that with a couple baby line people. So yeah, it varies per job. And I go off of and I trust Julie's judgment on things and before she sends back our feedback on price and negotiating, she obviously checks with me and I'm basically just going off my gut reaction to price. I don't really have the extensive knowledge and experience that Julie has. And so I trust that she's bringing me a deal that she feels is a good fit. But there might be something in your message to me or a phone call if we're talking on the phone where you're like, I don't know…I feel like they could maybe come up a little bit so I'm going to ask them to come up to three thousand instead of two…
Julie: (29:06) Yeah, you're bringing up such a good point. And this is something that I was actually doing a lot of thinking about today and I won't get into it, but gut is a huge part of this business. Even when you are working with a licensing agent, go with your gut. There are definite things I need to know in order to do my job. Like I need to know what needs to go into the contract. I need to know what the basic terms are for the licensing deal. I need to know like there's some basic things I need to know but when it comes to negotiations, it is sort of like very creative artistic thing and a lot of it does boil down to gut.
And even recently we had a situation, maybe I'm getting off on a little bit of a tangent here, but like we had a situation recently where there was a really cool opportunity but just somehow like we just got like a gut feeling that it just wasn't going to pan out. And there was money there and it was real money, but we just both had that feeling and we just said no. Somebody else may have said yes. But we said no, we just went with our gut. And I think it's really important in all of this that…I can give you all the information I have in my brain. I can tell you everything I know. At the end of the day, listen to your gut about things because if I said do it this way, but you feel like this could be a lot of fun, go do it. Or if I said do it this way and you feel like that would never work for you, don't do it.
When it comes to making a decision about a deal, is it ultimately up to the client (designer) or up to the agent?
Julie: (30:54) It's ultimately up to the client, honestly. And it's sort of a risk that I take as an agent. These questions are so timely. It's very interesting because I was just thinking about a lot of this today. Right now, I can't think of the last time that I was not on the same page as my client. But I can think of many times in my past where the client and I were not on the same page and I would be shocked at certain things that they didn't want to do or shocked at certain things that they did want to do. So if things are right, usually you're both coming around to the same answer. And then there's a little bit of you live and you learn.
The one thing that is sometimes frustrating is, there could be a company that comes by that maybe they're seductive to the client because it's a product they love but the company doesn't want to pay anything up front for the license. And I would say, well, they're not willing to pay anything. Don't do it. Little things like that come up. But generally, if you're working with an agent and things are going right, it shouldn't be a big fight of, I think you need to do this. No, we're not doing it. Or, don't do this. Yes, you must sign this. It's not dictatorship kind of thing.
Jenna: And it's a partnership. I know we've said this before on other things, but if it's just not a good working relationship, then maybe it's just not a good fit.
Julie: Yeah. And it's funny because the word client is rubbing me the wrong way recently. It's definitely like, that's the term, but this is a partnership. We're kind of working together to grow a business. I'm as incentivized as you are. And we both are building this brand together. We're both participating in the business. It's a partnership and you should definitely approach it like a partnership and think about how you'd want to be treated in a partnership.
Jenna: You're right, it is a partnership. I'm reading the book called Rocket Fuel right now by Gino Wickman. Love it. If you haven't read it, it's insanely good. But I like to think of it in terms of how he defines relationships in the workplace and like within businesses and brands is like, there's a visionary and then there's somebody who's the integrator or the chief operating officer and we're partners in building this business, like you said, and you're a creative person, but you have more of the roles that are like the integrator. You're kind of getting in the day to day stuff and the nitty gritty of pitching, negotiating and all of that. And then I'm more of the big picture working with the client once it starts to come into the design phase and producing the creative, all of that. And so you're so right. It is a partnership. I like calling it a partnership versus a client relationship.
Is there a standard length of time for this partnership? A minimum number of years?
Julie: (34:31) Three years. I feel like three years has been the standard for such a long time that it probably should be longer by now. But some people get surprised when they're like, Oh, I just want to try this out. Why do I have to sign up for three years? It seems like a long time. But even as I explained before that some of the bigger opportunities with companies that sell to like mass retailers are thinking, the product development lead times can be a year out or 18 months out. So when you think about it in that context, if you don't already have a thriving licensing business and you want to sign an agent and then you're expecting them to find deals for you and then get product into the marketplace, three years could easily go by before you've even seen your product hit the market.
So I would say three years is the standard with options for renewal. And I wouldn't be surprised if there are people out there asking for longer terms. I also wouldn't be surprised if there were people out there that would say, I'm going to work with you for six months and if this doesn't yield anything for six months, then I have the option to terminate. Because you know, an agents typically work on commission and they're not going to want to keep something on that they can't do anything with. I don't know some of them are so competitive that they might not want you to go with anybody else. I guess what I'm trying to do is give you a sense of reality of, from an agent's perspective, what might be important to them in terms of the time.
Is there any scenario where somebody could back out of an agreement with an agent or vice versa if it's just not working out?
Julie: (37:03) Yeah, I mean there's probably in every agreement, each agent would have different reasons for terminating. Depends on who needs the other person more. There might be a situation where if you already have a thriving licensing business or you have a couple of opportunities, you come in and you want somebody to take it over but you don't want to sign with somebody unless you feel like they're performing and you can define what you mean by performing. So it could be, if you don't sign two deals before the end of the year, I want to be able to terminate and they want you very badly and on their client roster, then that might be something that you would want to agree upon.
Typically on the licensing agents part, there's less of a concern about performance because most licensing agents would probably say, listen, like when you hire a PR agency and you agree to pay them a fee every month. If anybody has ever been in that situation and has gone through the maddening process of hiring a PR agency, paid a $5,000 retainer, and to only have it say in the contract that they can't guarantee that they're going to get you press. They're going to use their best efforts. They're going to do everything they think is reasonable, but they may not be able to perform. And I would imagine that any agent that's kind of worth hiring would basically say the same because we can't really control, we can't force people to sign deals with you and we can't force you to sign a deal. It's really kind of the brand owners discretion, as we said before. Like where does the buck stop? It usually stops with the brand owner. So typically if there's any kind of performance requirements in the contract, it's usually comes from the brand owners side and an agent may or may not be willing to agree to those standards.
What is the industry standard for licensing agent commissions and fees?
Julie: (39:25) Commissions can range anywhere from 25% to some agents probably would say 50%. I don't think most agents would do it for any less than 25%, but I don't know everybody and how everybody works. It's typically 35% I would say is the average. And that's been an average for a long time. In terms of other forms of compensation, some agents will want retainers and others won't. And if you're talking to an agent, and I would imagine that most art licensing agents are probably strictly commission, but if you're talking to an agent and they give you their terms, and definitely ask for their terms and they will probably have very standard terms and a very standard contract that they always use. You can ask to see it and go with your gut on how you feel. I guess the reason why I'm saying that is don't go with the cheapest person because they might not be the best person. I would want the person negotiating on my behalf to ask for really good terms.
What is the most challenging part of your job as a licensing agent? And the best part?
Julie: (41:14) I think the most challenging part of my job is probably just the antiquated way in which my industry works and how hard it is to find new companies to license brands. I think that's probably the most challenging aspect and the most frustrating aspects of the work that I do.
And other than that, I would say it's actually, if there's anybody here that's listening, that's thinking about becoming a licensing agent. I've never really thought about the fact that there might be people who are just trying to decide what to do with their careers. It's a really cool job because it does touch upon a lot of different disciplines and it involves creativity, but it's also really good to understand that…for me at least, I find it really good to understand the business side of how this business works. And it's a passive income model. Once you sign a deal and if it's a good deal for your client and the relationship goes well, it can renew for many years to come and it doesn't involve more work if a product line gets into the market and if it sells and grows year after year, it doesn't mean it's going to require more work on the part of the licensing agent for it to grow year after year. So it's kind of cool in that way.
What is the most challenging aspect of the licensing business as a designer?
Jenna: (42:54) Definitely not working with an agent because I have the best agent in the world.
But I would say just licensing in general. My business hasn't been licensing and to just plant the licensing opportunities into this five-year-old business at the time when we started working together. I already had clients, I already had my book deals and I was working overtime. And so it's been really challenging for me in the past couple of years just to have an updated library. Like I have a ton of artwork, but a lot of it is unscanned, unedited and it's not in the brand book, it's not turnkey-able because it needs to be scanned. There are huge piles of artwork that's just sitting there.
And then another part of it is, too, most of my artwork is floral and so there's the whole seasonal collections that I haven't tapped into yet. There's some pattern in my library, but it's not really extensive. And so that has been challenging. Just finding the time to really sit down with my library and make it more extensive and more in depth because we would probably get jobs way quicker and easier to fill in the bigger jobs that we have currently if I had a more extensive library that had all my work scanned, was organized in collections and all of that. And we've talked about that even on the previous episode. But that's probably my hardest thing for me, I guess.
Julie: You're making me want to change my answer a little bit. I think for me because of the client base that I've chosen to work with being people with thriving businesses that art and design and surface pattern as part of their brand ethos, but their brand isn't their business and brand isn't totally based on that. That can be a real challenge for me because every single client I've had, literally, I'm trying to think of one, I maybe have one client and even that client still had a core business that was outside of licensing. Every single client that I've had has gone through a period where they are clinging on to what they know to do as the owner of their business for dear life and wanting licensing to come in and just create itself. And then when they get their first few royalty checks, they realize, Oh, they don't have to do all this work to have a business and then they want more licensing.
That's a process that I've gone through with literally every great client I've had. If there's one thing that unites them all, that has been the trajectory—that everything else they know already about is a priority. Licensing is supposed to be like an ancillary kind of opportunistic, low lying fruit kind of thing. And it's supposed to sprout up and become this massive thing on its own. But then when they realize that it's worth putting more resources into because it will save them money and save them time. They're like, when can we sign more licenses and how do I support the growth of this business? So it can be challenging for me as an agent when I want to be able to push something and I can't really push it properly.
Jenna: You're waiting for me.
Julie: Yeah. For your brand book. But you know what? It's good. What's interesting is that things flow to you very easily and that is really cool. But I think we'll get to a point together where you'll really get to understand the economics of the business and you'll want to push it out as much as it's pulling you in.
Jenna: Yeah I feel like the current job that we're working on right now that's going to be in Staples soon. I feel like when that hits shelves that'll be more of like a real thing. Okay. I want to go after this and like really dedicate weekly time to painting, scanning, designing patterns and work and getting in my library and all of that. But that'll be a really good time. And it's just so exciting to see your work on products and to collaborate with a bunch of it cause you're like the middle person as an agent. You're talking with the manufacturer and the retailer and then you're communicating with the creative person, the brand owner. And so it's just a really fun, exciting partnership. And sometimes things can go awry. And that's why having an agent helps bring that clarity…
I hope you gleaned some sort of valuable information and insight from this interview. And don't you worry, Julie will be back for more talk on all things licensing. Make sure you hop over on Instagram and let us know. Julie's handle is @iamjulieturkel and you can find me @jennarainey.
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