November’s One-A-Day Q&A – Question #16

16 11 2016

Q: A large percentage of my portfolio is licensed for online sales only with two companies. For a long time I could see my daily sales/returns with the larger company. The smaller company did not provide that. NOW the larger company has shut that down for their artists and I receive a monthly report only. There is little to no accountability. Why do the licensing companies (who make ALOT) of money off artists treat us poorly?


A: Since I don’t know what companies you are referring to, I can’t address any specifics, only the broader issues inherent in your question. One of the big concerns here is accountability.  Both the artist (licensor) and the manufacturer (licensee) need to be accountable to the other.  I think the best place to start with guiding accountability is in the contract. What each ‘party’ should do for the other and when it must be done must be outlined in the agreement.  If everyone agrees and knows what is expected of each other, then the framework for accountability is put in place.  As you get more experienced in licensing and doing contracts, you will learn that you can really add anything to an agreement, and defining the ‘what’ and ‘when’ makes for a clearer agreement and less hassles in the long-run.

Now I understand that you have an agreement in place which currently it would be difficult to change without rocking the boat, so the only thing you can do is work within the current system. I must add, as well, that getting monthly sales results is much better than most licensing agreements. In the industry, it is very typical to get quarterly sales results and to get those 30-90 days after the quarter has ended.  To be truthful, looking at your daily sales doesn’t make them grow, it just gives you valuable information about what types of art and designs are selling faster.  My recommendation is to grow your portfolio and get some new licensees.

I’m not sure who to attribute that old saying to, but I’ll paraphrase it here: “It’s not wise to put all your eggs in one basket.” Or even two baskets, as in your case.  Whether or not your licensees are treating you well or poorly, it is taking a big chance when running a business where you are dependent on only one or two companies for your livelihood.  What if, they didn’t just reduce the number of times you can access your sales, but shut down completely or decided to end your agreement?  So think about diversifying your portfolio (into deals with other licensees), and for the exact same reason you would diversify your stock portfolio—to reduce your risk.  I hope by adding licensees you will increase your revenue and find some good new manufacturers.  There are some who really respect artists and others who take them for granted, so learn to discern and find the good ones.  The more marketable your art is, the more you can pick and choose from the really terrific manufacturers who do treat artists right.





2 responses

16 11 2016
Janine Medeiros

Thank you for taking the time to answer these daily questions. Your replies are so informative. I am learning so much!

22 11 2016

Glad to hear Janine! So happy you are learning- send in a question! to:

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