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INTRODUCTION
An
Introduction to Licensing by Robert G Allen
The Author of two of the largest selling financial
books in history; both #1 New York Times best sellers
-- read by millions of people in the past 20 years.
Multiple Streams of Income & Multiple Streams
of Internet Income
http://www.robertgallen.com
INTRODUCTION
What you are about to read is the most lucrative form
of intellectual property on this planet. And it’s
all about licensing. Licensing is everywhere you look,
and if you have the right idea you to could be the
next licensing multi-millionaire.
So what is licensing? Licensing is the ultimate form
of intellectual property around; it’s the fastest,
simplest and shortest path between an idea in your
head and multiple streams of cash in the bank for
a lifetime.
So just what is it? Well, it all started out over
5o years ago; today it generates tens of billions
in sales per year.
It starts back in 1928 on a train from New York to
Los Angeles when Walt Disney and his wife are returning
from a meeting, where they have just learned that
they have lost the rights to Oswold the Rabbit. They
are in effect out of business. But a stray mouse on
the train inspires Walt to come up with a new idea.
Walt wants to call his new cartoon Mortimer mouse
but his wife prevails and Mickey Mouse is born. It
is with this idea that Walt and his brother Roy begin
to create something big in their one-car garage on
the wrong side of L.A.
Little did they know, they were about to start what
is today one of the largest entertainment corporations
in the world!
Walt and his brother wanted to be moviemakers, but
that is not what makes the largest amount of money
for Disney today. It began when a businessman approached
the Disney brothers and asked for their permission
to silk screen the image of Mickey Mouse onto 10,000
wooden pencil boxes. Permission was granted. Nobody
knows what the fee was, but thus was launched the
modern concept of licensing.
It eventually grew into the Disney licensing and merchandising
division, which is today one of the largest and most
profitable parts of the Disney Empire. In the beginning,
the cheques were small… and few and far-between, But
then the snowball effect took over and it grew and
grew as Mickey Mouse started to appear on Hallmark
cards and in books. It wasn’t long before the two
brothers realized the power of what they had created
in their little garage. They could not have known
then that their little drawings would create such
massive amounts of money for them, and all they did
was to give the rights to other business people to
use their caricatures and logos. No manufacturing,
no marketing, nothing more at all was required of
them.
The company who bought the rights did everything from
printing to sales and marketing and all the Disney
brothers did was to sit back and count all the royalty
cheques.
Billions of dollars of Disney merchandise are marketed
and sold throughout the world today, all from Walt
Disney’s seeing a mouse on the train and turning that
vision into a cartoon.
What are the benefits of licensing? In effect, all
the Disney’s gave this businessman was the licensing
rights to attach an image to a product to increase
sales potential. The businessman did all of the movement
of the product from seller to buyer. The businessman
also took all of the risk and managed all of the money
and simply sent Disney a fee for all of the products
sold that carried an image of Mickey Mouse.
• No manufacturing
• No set-up costs
• No inventory
• No sales cost
• No sales force
• No distribution costs
• No employees
• No risk
• No money risked
And
little or no investment of time or energy once the
product is licensed!
It’s the ultimate way of making tons of money with
minimum effort on your part.
Another such story is about a man who was a surfer
from San Diego. He came up with the idea to manufacturer
stronger, tougher surfing shorts. With his prototype
shorts done, he decided to put his logo on them. He
used a design of ten toes hanging over the edge of
a surfboard. He called his new surf wear, “Hang Ten”.
And a new brand of surf wear was launched. The company
has expanded and expanded, branching out into other
designer-related surf wear, employing thousands of
people throughout southern California.
You will not find any Hang Ten factories any more;
all you will find is Hang Ten’s head office employing
a small work force. You may be thinking this is another
sad case of company downsizing.
Well,
nothing could be further from the truth! You see,
they have learned to work smart, not hard. This year,
Hang Ten will account for $600 million dollars in
licensing revenues worldwide. And all they do from
their head office is licensing. Clothing manufacturers
from all over the globe pay Hang Ten millions upon
millions of dollars just to print the Hang Ten logo
onto shorts, shirts, stickers and many other items
of surf related gear.
Hang Ten’s work force no longer makes any surf related
products; instead they work on designs and keep a
vigilant eye out for people who are illegally printing
and selling counterfeit products without licensing
agreements from Hang Ten. http://www.hangten.com/about/history.cfm
So as you can see, from one building they are making
millions, all as a result of licensing.
Using this same concept in the seventies, a geeky
computer nerd named Bill Gates started a company called
Microsoft that paid around fifty thousand dollars
for the rights to a new computer program that was
called D.O.S.
D.O.S. stands for disk operating system, and it is
the system that controls most of the worlds mini=computers
today.
It turned out to be the deal of a lifetime, because
then Bill Gates licensed D.O.S. to I.B.M. for their
first home computers. He didn’t just sell it to them;
he licensed it to them. And that is the reason why
the market value of Microsoft is higher than the market
value of I.B.M. and General Motors and most of the
top fortune 500 companies, from zero to billions of
dollars in about fifteen years.
If Bill Gates had sold D.O.S. to I.B.M. he would have
made a modest amount of money, but he wasn’t interested
in a one-time payoff deal, instead he wanted lifetime
streams of income and the only way to do that was
through licensing.
Bill Gates doesn’t have to manufacture all the computers
around the world. Instead people like Hewlett Packard,
Fujitsu, etc. make the computers. But in order for
them to work, they all need D.O.S., so Bill Gates
provides all these companies the licensing rights
to use his product. But he doesn’t stop there. He
sells upgrades to all the computer owners like you
and me.
Is it any wonder he is the richest man in the world?
And that could be you through licensing your ideas.
All you need to do is learn to think like Bill Gates.
Another inventor approached a large corporation about
five years ago with a concept to increase company
sales. The Inventor reasoned that with a slight
modification to the existing product, the company
would be able to increase their sales and market share.
The Inventor only wanted a few pence per item sold,
so he went to different manufacturers with his idea,
but no one was interested.
But, as all sales people can tell you, you have to
knock on a lot of doors before you get a yes. It could
be the 1st door you knock on, or the 50th one or even
the 100th one, you just never know.
The important thing to remember is, just keep knocking
because your huge lifetime streams of income could
be nearer than you think.
Undaunted by the refusals, he gathered up his portfolio
and went to one of the biggest manufacturers down
a New York City street and presented his idea. And
after some testing, the company realized what a good
idea this man had come up with. With this in mind,
a licensing agreement was signed.
In exchange for using his idea, the company would
pay him a few pence for every item sold, and when
the new product finally hit the shops, the company
increased their sales by an extra 100 million units
in its first year. The inventor has since received
several million dollars in royalty fees.
The product that made this man a very rich one was
an inbuilt battery power tester like the ones you
see on Duracell.
This is the power of licensing.
So what if you’re not Bill Gates or Walt Disney? It
doesn’t matter, because they were no different than
you and me. It’s all about the ideas in our minds
and what we do with them that determine what our futures
will be.
Every day our mind processes thousands of thoughts
and some are million dollar ideas. How many of these
ideas do you need to have success? Well, Bill Gates
had D.O.S. and the young surfer had a simple logo,
both of which are from opposite sides of the business
market. One idea was simple and the other was complicated,
but both individuals are now millionaires.
So how do you turn your idea into a licensing phenomenon?
First, you’ve got to believe your idea is as good
if not better than any one else’s idea. Don’t think
that because there is a similar product to your idea
on the market yours won’t make it, because this is
not necessarily true. You have to think of it like
this; all cars are basically the same. At the end
of the day, they all get you from A to B. But this
goes back to the Niche Marketing Rules, which I will
tell you about later. All cars have their own uniqueness,
which will only appeal to certain people. If you look
at anything from clothes
to electronics, when it’s all said and done, they
all do the same things but are styled in a different
way to appeal to certain Niche Market.
You have to break free from your limitations of “Can
I? Should I?, Will it?” Turn those doubts into “I
can, I should! It will!”
And one day when the right idea comes your way, you
can read this again and know which roads to take to
signing a licensing agreement that will bring you
riches beyond your wildest dreams.
Maybe it won’t be this year or the next, but if you
want it, then the right idea will come.
If you look around, you will find hundreds of products
that have been produced under licensing agreements,
like Harley Davidson merchandise, Ocean Pacific surf-wear
and surfboards, Simpson calendars, posters, watches,
T-shirts etc. All of which is just a microscopic fraction
of the licensing industry.
All you have to do is come up with your own idea or
even an idea to improve on a product that is already
out there, because we have all said that this product
or that product would be so much better if it could
just do this or that.
Well, put it down on paper because you could be sitting
on untold wealth; wealth that could be going into
your bank account year after year.
Back in 1988, two guys started putting their ideas
onto paper in the form of sketches and then their
idea became a reality that brought them untold riches.
Around 400 million dollars was generated from their
idea. What was their multi- million-dollar idea? It
was Teenage Mutant Ninja Turtles.
There are plenty of businesses out there who could
be shown a way of revamping their own products. Think
about ways to enhance other companies’ products. Begin
noticing at least a few licensing ideas a week. Look
out for hot trends. As you read magazines and papers,
look for advertisements that keep appearing. Ask yourself
what else would this look good on, what does this
business need in the form of a licensable idea that
could make us both a fortune?
You don’t even have to come up with a great idea yourself.
Go to the patent library and look through the patents
and make a list of good ideas that have nothing more
than a patent certificate for the Inventor. Many,
many patents are issued on inventions that never reach
the market place because the inventors didn’t know
how to market them. Phone up the inventors and ask
if they have done anything with the patent. If not,
tell them you want to approach manufacturers for a
licensing agreement.
Then,
look through the registry of manufacturers which lists
all manufacturers by subject.
Is there another product out there you like? Sometimes
you can change the name, copy the idea / concepts
with small but significant changes and capture streams
of wealth for yourself.
There
is nothing wrong with copying as long as you don’t
cross legal boundaries. After all, how many things
have you seen out there with just a small variation
on them?
Licensing is possibly the fastest way that you can
take your idea from your mind to lifetime streams
of income, which could be staggering to say the least.
It’s already a remarkable way of generating wealth
for which someone else contributes the work, but in
the future, licensing will become a money-generating
phenomenon because of the ease with which global trading
takes place with the use of the internet.
http://www.robertgallen.com
Thank you to Mr Allen for his great audio program,
Multiple Streams of Income which was a great inspiration
to me for writing this e-book.
To
go into exact detail about licensing would turn this
e-book into the thickness of a telephone directory.
So what I want to do here is to help you along that
way on a more simple path, then all you need to do
is take great caution and seek expert advice where
needed.
