Scale Your Amazon Business via Licensing Products

Richard Morgan
April 2, 2018

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Will Tjernlund joins us to talk about Licensing Products Deals.

Will loves MMC fighting and really enjoys it.

The Bad Boy brand used to be a surf brand but moved into MMC as a brand.

Will and his brother were approached by a private equity firm over two year ago to take on selling this brand. Nothing happened.

Two years later Will gets called by the CEO of Bad Boys brand who wanted him to promote the brand and sell on Amazon (not knowing of the previous contact).

The company owns the name ‘Bad Boy’ and ‘Bad Girl’ on any product
They have a different licensee in 40 different countries
The sales are doing very well across the world
They were looking for a licensee in US and Canada and Will was it
Will buys a pack of boxing gloves from Pakistan for $10 and marks up to $11.95 to cover the licence fee for Bad Boy
Launched 2,400 SKUs in the last 34 months
Moved them from a Magento store to Shopify store with Amazon fulfilling
Has a nominated manufacturing plant in China, licensee prior to Will passed down the contacts for factory etc.
Have hired an R&D team to make the best boxing gloves you can make and sourced a factory and then send them on for licensee’s to use

Infrastructure of Licensing deal

Will is in control of manufacture, distribution, shipping logistics
The shipping is handled by Flexport
Will had assistance in the first month from the Licensor
Are launching everything from scratch
Mailchimp account is sending emails to different categories each week sending people to the Amazon account

Fulfilled by….?

Can’t send in all stock or they would get hit by long term storage fees
Lots of product come in 5 sizes and 5 colours
Sending in 5-10 units into Amazon to test what sells at what velocity
Spent $160k on stock
Doing $20-30k per month so far in sales

Ingesting into Amazon

Organizing all the SKUs has been a nightmare
Half of the products were up on Amazon but will wrong data or UPCs
Reed runs a huge spreadsheet to manage and organise the SKUs and fix anomalies

Use the 80/20 Rule

Fix the most likely sizes and colours that will sell and get those up first
The obscure stock is still in the warehouse next door and not in Amazon yet
This old or strange stock might not sell well

The Contract

Deal is fairly simple
Pay certain percentage on the manufacturers cost as a licensing fee
Contract is for 3 years
If Will hits certain numbers they cannot automatically terminate the contract after year 3
It is automatically renewed if they hit these targets
Will has to come up with 12 designs a year to maintain innovating the brand
Used 99 Designs and sent over to Bad Boy and they looked at 50 designs and chose only 2 that were good enough

Mailing List and Social

The mailing list is owned by the brand passed on by the brand
Facebook has 120,000 likes, Instagram has 20k and Newsletter has 24k
Started sponsoring MMA podcast
Sponsoring MMA Champion fighters – the Bad Boy Fighters
Now looking at off-Amazon marketing
Only working as Will is into MMA and so knows where the fans are
Looking at REDDIT as a marketing area
Looking at blanket coverage for the Brand like Blue Apron – you hear it everywhere
Podcast sponsorship is like $50 per episode so worth looking at

How to get a Licensing Deal

Licensing Trade Shows
A bunch of brands are there and you can pick and choose between them
Look at the brand’s Amazon presence and how you could make it better
Pitch that you know ecommerce and Amazon to the brands
Easier with the Big Brand years of establishment to get into Brick and Mortar stores

Established Brand

Having the Bad Boy brand that is established Will is bringing in new products
Just introduced a Soap with Bad Boy branding on it and looking at other avenues that the brand enables
Will would love for all 500 fighters across MMA to send out the same messages working together with their 15m followers
Get them to do this every week Tues and Thurs
This could bring in a lot of money for the fighters and promote the Brand extensively

Final words

Will is learning as he goes and the Licensing world is a whole different world to Amazon
Licensing can be a very complicated world
If you have a US brand then you might just license it to a Seller in Europe or other territories