6 Reasons why licensing is good for online retailers

With lot of licensing deals heppening in online space, eCommerce has emerged as one of the most lucrative areas for licensing fraternity. Prabhkiran Singh Co-founder of Bewakoof.com cites reasons behind licensing being an effective retail strategy for onl
why licensing is good for online retailers

Try finding a Batman or DDLJ T-shirt online and you will end up being amazed at the number of online retailers donning the hat of licensee of some of the big names of industry. And even the industry veterans are not hesitating to ink pacts and license out their popular properties to these online portals. For instance, Disney has partnered with some of the online players for its Star Wars T-shirts.

Ever wondered, what makes licensing a viable option for online retailers? Apart from the access and widespread reach, what makes online portals great licensees is the comparatively lower amount of risk factor involved.

1. Higher Credibility: One of the main concerns of consumers buying online is regarding quality, especially, when your brand is new to the market. It is always a good strategy to associate with big brands, as it gives your brand high credibility. So, licensing is a way to associate your brand and take leverage from the well established licensors. It helped us immensely when we launched the King Khan Collection in association with Yashraj.

2. Reach to brand loyal audience: Not only credibility, it also helps increase your brand reach as your brand is benefitted by acquiring new audience, which in this case happens to be the loyal audience of your licensor brand.

3. Less risk: While coming out with a new collection or a marketing campaign, licensing is a smart choice as it involves less risk since the licensor brand has a proven demand in the market.

4. Increase Consumer base: Licensed collaborations help pleasantly surprise your existing customers, attract new ones and create an extensive loyal customer base.

5. Premium Price-points: This also gives the benefit of charging premium price on the product. Premium pricing compensates for the royalty charges that you pay. Hence, when it comes to unit economics, even though you are paying royalty, you are not compromising on your gross margins.

6. Game changer in long run: When focusing on licensing, apart from targeting existing properties, one should also bet on new emerging properties as you will be able to get exclusivity and that can be a game changer for your brand in the longer run.

The article has been written by Prabhkiran Singh, Co-founder, www.bewakoof.com

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