Question

Topic: Other

Standard Fee Range For A Licence Agency?

Posted by Anonymous on 8/31/2009 at 5:18 PM ET 250 Points
Our company has never licensed our brand and are considering contracting with an agency to represent us to execute some consumer branded apparel and gear for our brand. How much should I expect to pay as a percentage of sales to the agency during the course of the agreement? Are their other viable compensation standards to consider?
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  • Posted on 8/31/2009 at 9:05 PM Accepted
    Like so many things, the answer is "It depends." Mostly it depends on the value of your brand name in the target industry (apparel, in this case), and how much responsibility you're planning to lay on the agency.

    License fees (including the agency's fee) can range from 1% of sales (or even less) all the way up to 10% or more. That's quite a range, and it depends on how much value it brings to the licensee, and how much you expect of the agency.

    I've worked on a few licensing deals in the apparel industry and been a fly on the wall for a few others. You might want to start with some consumer research to assess the value you bring. Otherwise you're just in a subjective negotiation with no basis for any number you come up with. And it will put you in a much stronger positioning in determining the agency fee. (Are they proposing to do the research?)

    Contact me using the email address in my profile if you want to discuss in more detail.
  • Posted on 8/31/2009 at 9:17 PM Author
    Thank you for your feedback. I expect that we'll have the agency pull additional research to help solidify the plan. I would expect to pay on the higher end of the spectrum based on our need to have the agency run the show for us.
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