As a sought-after business expert, Paul helps eCommerce businesses and entrepreneurs grow their revenue exponentially through licensing. He began his private label business on Amazon in 2015. In less than three years he grew his business from zero to over $4 million! In 2016 he received advice from a friend to pursue licensing for his products. After a deep-dive into the world of licensing, and surrounding himself with a team of experts, he has executed multiple license agreements as both a licensee and licensor.
- Free Training: 3 hours to YOUR BIG IDEA! Follow JLD’s step-by-step system and in just 3 hours you’ll discover YOUR BIG IDEA!
- CozyPhones – Paul’s business
- Alibaba – Marketplace where Paul found his first manufacturer
- LIMA – The International Licensing Industry Merchandisers’ Association
- Get Paul’s FREE COURSE at NextLevelLicensing.com
- Your Big Idea – Discover Your BIG Idea in just 3 hours!
3 Key Points:
- Licensing and other business partnerships can definitely take your business to another level.
- Having a major brand behind your product means that your product is less likely to get copied (because of IP rights).
- Licenses are all around you; take time to identify which one(s) might fit with your product.
- ZipRecruiter: Find out today why ZipRecruiter has been used by businesses of ALL sizes and industries to find the most qualified job candidates with immediate results. Visit ZipRecruiter.com/fire to post jobs on ZipRecruiter for FREE!
- Udemy: THE largest marketplace for online learning! Improve your life through learning; download the Udemy app to learn anytime, anywhere or visit Ude.my/fire today!
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Audio Masterclass Show Notes
**Click the time stamp to jump directly to that point in the episode.
- [00:10] – Today’s Audio MASTERCLASS: Zero to 4 Million with Physical Product Licensing
- [01:32] – Get to know Paul as he shares a unique and interesting thing about him!
- Was an active duty Marine for 11 years
- [02:55] – Paul breaks down what product licensing is and how it works
- The difference between the Licensee and the Licensor
- An example to note: George Foreman Grill
- [05:02] – How product licensing took Paul’s Amazon business off the ground
- Check out CozyPhones to see some of the licensed products Paul has
- Heeding his friend’s advice, he started looking into product licensing
- Started with a small license with The WhatIf Monster
- His Deal with Nickelodeon… Tune in to hear how this partnership gave Paul the audience he needed.
- [09:18] – Take JLD’s advice, Fire Nation: DON’T Win the Race to the BOTTOM!
- [10:16] – Paul dives deep and shares details on how he got his first licensing deal.
- A great start to a licensing deal
- [11:47] – The BIGGEST Failures — Paul lists them all out!
- The Amazon business came from an epic fail
- Shut down listings. If you’ve tried to sell on Amazon, you know how this feels!
- Product Fail: re-selling paper popcorn bags and dealing with infringement problems
- [14:18] – Discovered CozyPhones through a competitor product
- The process Paul took when creating CozyPhones
- Ordering a small batch and selling it as-is from a manufacturer on Alibaba
- Ordering for his own brand, CozyPhones, with new colors
- The process Paul took when creating CozyPhones
- [18:02] – Paul closes the gap: from licensing conventions to working with Nickelodeon.
- How Paul used LinkedIn to connect with a licensing consultant
- [23:46] – The challenges for physical product sellers: tune in to hear what they are and how you can overcome them!
- Expanding the sales channels
- [27:38] – Profit margins – you have to know the ideal margins for your business
- [30:25] – The benefits for physical product sellers
- “The Amazon business and the eCommerce business is like no business I’ve ever seen!” — Tune in as Paul shares why!
- [31:27] – More information on licenses – the types and the ones that fit physical products
- [34:09] – Today’s Masterclass Finale: Contacting and Negotiating with a License Owner
- Register with LIMA
- Get in touch with a licensing consultant
- [36:06] – Paul’s parting piece of advice: Put yourself out there!
- Get Paul’s FREE COURSE on NextLevelLicensing.com
JLD: Boom. Shake the room Fire Nation. JLD here and welcome to episode 2011 of Entrepreneurs on Fire, and today’s audio master class is From 0 to 4 Million with Physical Product Licensing.
I brought my main man, Paul Miller, on because he is an expert on this topic, and he drops value bombs on taking your physical product and creating licensing around it.
So, let me just tell you something. I knew all about physical products, but I didn’t know about this wide world of licensing, and I learned so much. As you can tell, I ask a ton of questions, because I’m super curious. I think it’s a phenomenal idea for people in specific situations. So, definitely listen and see if this is for you.
And who is Paul? Well, is a sought after business expert, and he helps e-commerce businesses and entrepreneurs grow their revenue exponentially through licensing. He began his private-label business 2015 and in less than three years, he grew his business from zero to four million dollars.
In 2016, he received advice from a friend to pursue licensing for his own products and after a deep dive into the world of licensing and surrounding himself with the team of experts, he has executed multiple license agreements as both a licensee and licensor, and let me tell you, Nickelodeon is one of those.
So, hold onto those afterburners Fire Nation, and away we go.
JLD: So, Paul, say what’s up to Fire Nation and sure one thing about yourself that we’ll find unique and interesting.
Paul: Hello Fire Nation. I’m just so honored to be here in the unique and interesting thing about me is I happen to be an active-duty Marine for 11 years and I served as a drill instructor at Parris Island, South Carolina.
JLD: Whoa. Well, I can tell you I find that very interesting, because when I was stationed in Iraq, we were under first mar dibbs, so I got to serve with a few drill instructors, and I will have to say I admired them all, Paul.
Paul: And thank you for your service, John.
JLD: Back at you, brother. So, Fire Nation, we have audio master class for the ages today. It is From Zero to Four Million with Physical Product Licensing.
So, I know a lot of you have been interested about physical products, especially when you’ve seen the success of the Freedom Journal and the Mastery Journal, and now we’re launching the Podcast Journal.
So, we’ve had a lot of success with the physical products, but what I like about Paul is he’s kind of taken things to the next level with physical product licensing. So, I can tell you I’m going to be taking notes during this audio master class, and I’m really excited to see how you can do physical product licensing in the entrepreneurial world and really create that dream life that we all want.
So, Paul, first and foremost, let’s just break it down for me, for Fire Nation, what exactly is licensing?
Paul: Well, John, it is really an amazing opportunity for physical product owners, but licensing is basically when one party basically rents someone else’s intellectual property or IP to use on their own product. So, you have a licensee and a licensor.
JLD: So, give me a hard-core example. Like give me an example of what it looks like when somebody rents that for – from somebody else. Like what does it look like with a real example?
Paul: Alright. Have you used a George Foreman Grill, John?
JLD: I have actually.
Paul: Well, there’s a perfect example. Believe it or not, George does not make his own grills.
JLD: Wait. He didn’t come up with that idea? He didn’t make that – wait. Come on. What’s happening here?
Paul: I can’t say whether he came up with the idea or not, but I’m pretty sure that he’s not physically manufacturing those grills.
So, the grill maker themselves have licensed the rights to use the George Foreman name and likeness and all that and to put that onto the property and to market it as the George Foreman Grill.
That’s a very simple example. Another simple example might be if you’ve got an NFL Umbrella. You know, NFL does not manufacture umbrellas, but that umbrella manufacturer does license the rights to use those NFL teams on the umbrella.
JLD: So, let me just kind of maybe take a step in the dark here. And George, if I’m wrong, you can come on the show and defend yourself, but I am guessing that George wasn’t sitting around one day and said, you know, how can I make a better grill.
I’m guessing that he has a big name, he’s out there looking for opportunities, and somebody said well hey, you can represent a product or hey, here’s a product, grill, that we will actually name after you if you are our authority figure, our influencer, and then they took that to the next level and of course he is the face in the name of that.
So, Fire Nation, you can think of a lot of different opportunities, probably a lot of things that you on where this is actually taking place.
Now, let’s talk about you specifically Paul. How has licensing taken your business to the next level?
Paul: Well, it’s been actually just amazing. I started as an Amazon seller about three years ago in 2015 with zero, and I came up with a fairly simple kind of generic product. They were sleep headphones. My brand is called CozyPhones, and you can look it up at CozyPhones.com and see some examples of licensing there.
But my product was a basic sleep headphones and along the way we came up with the idea of making these headphones for kids and put little characters on the headphones. So, my most popular one, for example, is a unicorn.
That idea took off in 2016, and I was looking for a way to grow and protect my brand. So, I reached out to some friends of mine who had some knowledge in the industry and was just asking advice. And one friend of mine named Mark Hirsch, suggested that I look into licensing.
So, I did indeed go to the licensing show in Las Vegas that year having no clue what licensing was all about and just to spec it out and see what the opportunity was. I came away from that show with a license for just a children’s book author called the Whatif Monster. It was a pretty small license, great way to get started, and we made our CozyPhones with the Whatif Monster.
Now, eventually that license got my feet wet in licensing, and I eventually inked a deal with Nickelodeon. And that has really taken my product to the next level.
JLD: Okay. So, just so I can maybe see if I’m understanding this correctly, you had this hit with this product you were selling on Amazon, the CozyPhones, and you’re basically saying listen, somebody could just mimic this, copy this, like rip this off, and make one cheaper, faster, better, whatever it might be, and then I’m kind of, you know, screwed. Or as we say in the military, SOL. It’s just a reality of life.
And so, what you did, you took those headphones and you went to a convention and you’re looking for a partner, somebody who had a brand or branding that you could use with your CozyPhones and then you found that partner, you guys talked about it, you guys made some kind of licensing deal, and then what, you actually put the design on the headphones and then branded it and marketed it that way?
Paul: That is a perfect summary of what it was, John. So, just to emphasize, and you made the great point about, you know, trying – as Amazon sellers, you know, we’re always kind of trying to one-up each other, and there is a lot of copycatting that goes out there. You know, some of it can be protected by your own, you know, intellectual property, some not so much. Sometimes people can just design around you.
But when you have a brand such as Nickelodeon on your headphones and it says Nickelodeon on the package, that’s a lot of protection. It also gives you access to that audience who already loves that brand who know, like, and trust that brand. So, that’s exactly what we did.
JLD: And let me guess. I mean now if somebody tries to rip off those headphones and they put Nickelodeon stuff on that, now you have the weight and the might of Nickelodeon going after those people. It’s not just lil ole Paul who just started his company in 2015 with probably not a ton of expendable capital to hire lawyers and go after people in foreign countries.
But now you have Nickelodeon who’s like oh heck no and they’re gonna go after them. I mean is that a possibility? Is that something that really does bring some value to the equation?
Paul: Exactly. You have basically an army of attorneys backing you up as the licensee. Now, the license – it depends on the contract who’s responsible for enforcing that IP, but as you said, the copycats, the counterfeiters are much more unlikely to try to rip you off when you got a major brand behind you.
JLD: Yeah. They just want to go after the ones that are just black or just white or just yellow light just the straight colors they can quickly and easily copy and just go after that audience that’s more that low-hanging fruit.
And one thing I want to make sure that I share Fire Nation is if you don’t go that route that Paul’s talking about and you know what he was mentioning earlier as well is that a lot of Amazon sellers themselves, they try to come up with faster ways to get things to market, cheaper ways to get things to market. What happens? You’re in a race to the bottom.
And I love this quote by Seth Godin is, when you’re in a race to the bottom, the problem is you just might win.
And who really wants to win that race to the bottom where like you’re now – what are shaving your sales down so you’re making a penny a sale or maybe even go into the negative for a little while just because you want to try to get market share. I mean that’s not a game that really solo and smaller-time entrepreneurs want to play. That’s a game for Walmart and Amazon to play. That’s not a game for us to play. We don’t want to be in that race to the bottom.
Let’s get a little more specific Paul. Like how did you actually start the conversation with that initial individual at the convention center? Like what did that look like?
Paul: So, I had registered for the Licensing Expo online, and they had a matchmaking service there where you can kind of put a profile of your products and link up with other potential licensors, and I had actually met the woman online, the author of this product, the Whatif Monster, and we had kicked off a conversation and then followed up with a meeting at the show where we exchanged ideas, showed her my products, my sales, and basically agreed to make a CozyPhone in the Whatif Monster style.
JLD: So, from that point forward, you had the conversation, you had the relationship, like what is that actual next up? Like what does the reality look like of just having that agreement, having that maybe verbal agreement but then making a natural reality?
Paul: First of all, I want to say that a great start to a licensing deal is when you’re doing something on a smaller scale. So, this is another individual entrepreneur, so we could easily just talk the two of us without a lot of attorneys involved and kind of spec out the terms of the deal, and we could take a basic boilerplate license agreement and outline the terms of those deals and go from there.
JLD: So, just for kind of kicks and giggles here, I’m kind of curious, because you started in 2015, you know, we ended up having this really successful product, which was the sleeping headphones, what were some of your early failures that didn’t work? Because I want Fire Nation to kind of maybe get a sense of you don’t just start an Amazon online seller account and the next thing you know you have a product that’s working, you go to a licensing exposition, and you find somebody to match up, and the next thing you know, Nickelodeon’s knocking down your door
I mean obviously that can happen and did happen to you, but what were some of the beginning failures you had and what were those lessons learned?
Paul: I’ve had plenty, John. And really the Amazon business in general began from an epic fail. I was a three-star restaurant franchisee and basically my stores went down in flames in 2015. Not real flames, but –
JLD: Figurative flames.
Paul: Yeah. Exactly. But I was on my last restaurant trying to save my last restaurant when I discovered the Amazon opportunity.
JLD: How did you discover that?
Paul: Well, I discovered that through another podcast – I heard an Amazon seller on a podcast and then ended up signing up to an Amazon course and I took the Amazing Selling Machine was the course that I took.
And it turned out really great. But that first year I definitely did have my troubles. That was going to be a plan B to my restaurant business, but it rapidly turned into a plan A after I could see the power of selling on Amazon.
But I had my listings shut down a couple times. My first Black Friday, half of my listings were shut down for a competitor complaint. I’ve had my listing shut down on Prime Day. So, we’ve had our challenges along the way.
JLD: What was one of your early failures product-wise? What was the first product that really just went up in flames?
Paul: Well, I had – I was selling – reselling restaurant product. They were paper popcorn bags, and we were just repackaging bags from 1000 per case to 100 per case, and we were actually selling 20 day. It was pretty awesome. I was making about $3 a package on them, but then the manufacturer decided they didn’t want those sold on Amazon, so they put in an infringement complaint just shut us down overnight.
JLD: How do you eventually get to the CozyPhones? What was the course of events that led you to that product?
Paul: Well, John, let’s see, you probably have something to do with that, because I’m a huge podcast fan and a huge fan of, you know, EOFire.
JLD: So, you listen to me as you fall asleep at night and be like man my ears hurt.
Paul: No. That’s the great thing about CozyPhones is that they’re a soft headband with real thin speakers in there and, you know, I was having a lot of trouble sleeping at night when I was having all that trouble with my restaurant business.
So, I had used a competitors brand for years, but they were broken, and so when I was looking around for an Amazon product, I came across something similar. I said wow, I love this product and you know I think I can even make it better. So, that’s how I kind of started with the CozyPhones.
JLD: I mean Fire Nation it always comes back to you filling a void. To you finding a niche in your own life that’s not being filled and saying I can do this, because you know if you’re a customer one, there’s probably two, there’s probably four, there’s probably eight, 16, 32, 64, fill in the blank. Like, you really have to understand that reality.
But now Paul, we’re not gonna go all the way down this road, but I am just curious like once you kind of said I can make this better, what were your next steps to actually take that thought of I can make this better to reality.
I mean you know, I’m sure you can make this product by hand like you had to find a manufacturer; did you go to China, what was the whole process there?
Paul: You’re right. There was a process. So, my first try at that was just order a small batch of the manufacturer’s product with the manufacturers label on it and see if I could make a better listing on Amazon following the principles that I learned.
So, I did that. That was the first part. Just making a better listing what goes a long way towards, you know, being successful on Amazon. So, I took new photos, wrote new copy, and then sold the manufacturer’s version of that product just the way it was.
The next order basically I used my own label CozyPhones and then we used more colors, more styles; styles and colors that I wanted to use so – that weren’t already being used on Amazon.
JLD: Now, where did you actually go to get these colors produced and not like specific places but I mean like what was that process?
Paul: So, I located manufacturers overseas and I communicated with them through Skype and email, drawings, pictures. You get pretty creative with your communication sometimes.
JLD: Now, did you use a service like Alibaba, Alibaba Express, like what have you found?
Paul: I did find my original manufacturers through Alibaba, and I was really fortunate to make a direct contact with the owner of the factory. And eventually last March I actually traveled, not this past March, March a year ago, traveled to China to meet with my supplier.
JLD: Was that a good experience?
Paul: Oh. It was awesome. I loved it. I spent about ten days in China, went to some other parts of the Country to visit, and then visited with my current supplier and with some other potential new suppliers. I don’t ever suggest that you put everything in the hands of one supplier only.
JLD: So, there’s one other loop that I really want to close right here, and that’s the gap that really exists right now of you going to this licensing convention center and having this great experience in meeting this author and having this relationship built and then big gap and then Nickelodeon is now under your wing and making things happen.
Fill that gap in for us. How did it happen where you are working with this one author, one brand, and then now all of a sudden it went to Nickelodeon? How’d that happen?
Paul: Well, you’re right. That’s a pretty big gap and it certainly didn’t happen overnight and it took a lot of work to get there. What I could see immediately after we did the Whatif Monster was the power of licensing. The ability to make that product unique and to protect that product and to appeal to that fan base of the Whatif Monster.
So, it was immediately apparent to me this is going to be the way to go. So, I obviously wanted to take it up a notch and I wanted to look at Disney, Hasbro, Nickelodeon, Marvel, you know, when you start thinking about the possibilities of what you can do and who might you team up with on your product to do license it’s just amazing.
But I again didn’t really know anything about how to deal with those guys. How do you get to a Disney? How do you get to a Nickelodeon? So, I basically went on LinkedIn and searched and searched and found a licensing consultant to work with. And that licensing consultant had connections within the industry and we were able to start discussions together with Disney, Nickelodeon, and Hasbro and we settled on Nickelodeon.
JLD: You know, a little bitty word that never hurt anybody, and I will say Fire Nation this is where the gold is right here. When Paul just revealed like he just went grassroots. He went to LinkedIn, he searched by job title, he found a licensing expert who had the right connections who probably had those keywords in their profile as well like Nickelodeon and Disney and Hasbro, and he started the conversation and shared what he had and what he did and the next thing you know he’s sitting at the table with the big boys.
So, don’t think that there’s these 10 degrees of separation between you and fill in the blank, Disney, Nickelodeon, whoever it might be in your industry. No. There are probably only one or two degrees of separation. You just need to find that right person and Paul went and he found that right person that one degree of separation who connected him to the right people and of course he had to have the product and the sales and the quality to back it all up, so he had all those ducks in a row, but guess what? He made it happen on his own. He didn’t sit back and just let it come to him, because that never would’ve happened. He went and made it happen.
So, value bombs being dropped by this Marine drill sergeant. And you better believe more are coming up after we get back from thanking our sponsors.
So, Paul we are back and there are a lot of challenges for physical-product sellers. You’re speaking to one right now I mean every now and then I look at my Amazon statement and I’m like they’re charging how much for storage and like to ship my product from my distributor in LA to the actual Amazon centers and all that goes into that I mean there’s just a lot of struggles. Just the profit margins just get nip, nip, nip, nip. They just get eaten up a million different ways. A million different ways.
So, there are so many challenges, but of course one reason why I like all those challenges personally is because it’s a high barrier. If it wasn’t a high barrier then everybody would do it. Why do you think that you don’t hear of many people making millions of dollars selling a PDF, because anybody can copy that PDF and sell it. There’s no barrier.
So, whenever you’re complaining next time Fire Nation about something being difficult or hard, how about you be thankful for that, because that’s the reason why a million other people aren’t doing the exact same thing, because it is hard and they quit and they gave up.
So, there are tons of challenges to physical products period. I’m one of them, Paul’s one of them, we will tell you that absolutely. I’ll also tell you right now that that’s one of their huge benefits, but Paul what are some of those challenges? Break them down for us.
Paul: I think expanding your distribution or your sales channels is a big challenge. So, as we talked about before, it’s easy to get shut down on Amazon whether it’s something you intended to do or didn’t intend to do. Amazon has you in their clutches and they control a large part of your business.
One of the benefits that we found through licensing is that it also can help you to expand your sales channels. So, one of the early experiences I had after we signed our deal with Nickelodeon is that they invited me to a little meeting out in Bentonville, Arkansas. And you’ll probably recognize that as the home of Walmart.
Now, lil ole Paul was not about to get an invitation on his own out to Bentonville, but Nickelodeon likes doing business with Walmart. So, they bring us out there and roll out the red carpet. So, that’s an amazing way to expand your sales channels.
Later on, that product launch with Nickelodeon ended up with me meeting a distributor, and that distributor was so impressed by our original CozyPhones lines and the Nickelodeon lines that we signed a global distribution deal and we’re going to be in brick-and-mortar this year.
JLD: What? That is insanity. Well, it’s a huge congratulations, but hey let’s not forget we’re gonna list out some serious challenges right now for physical products.
Start listing them out Paul. What are the problems, struggles, obstacles, challenges of physical products?
Paul: Inventory is a very big challenge especially when you’re growing quickly and there are all kinds of aspects to it. Projecting your inventory needs over time so that you can follow your logistics chain through ordering product, getting it shipped over from wherever the manufacturing is happening, and then landing in your marketplace on time so that you don’t go out of stock.
The logistics of inventory is obviously complicated, but funding that inventory when you’re growing fast can be extremely difficult.
JLD: So, how do you get over some of these challenges?
Paul: Well, there are some creative lending opportunities available for you out there. Amazon lending once you’ve been on Amazon as a seller for a while you may get an offer from Amazon lending and they’ll help you finance your inventory. There’s another company called UpFund.io where they help to fund Amazon inventory.
And then on the logistics side, I use Flexport, which is a freight forwarder and that has solved a lot of my problems. They’re very good with that.
JLD: Now, how has that solved some of your problems? Like what do they do that really solved your problems?
Paul: Well, Flexport allows you to quote a shipment and then follow that shipment day by day basically from your supplier all the way back to the US. And you’ve got folks on the ground in China, folks on the ground in the US, they also do FBA Amazon prep work. So, they can handle kind of every piece of that supply chain from the time that it leaves the factory to the time that it gets to Amazon.
JLD: Now, what you think is an ideal profit margin for a physical product? Meaning how much money do you have to make on every single sale to make it worthwhile in your mind?
Paul: I think an ideal profit margin, gross profit margin is 40 to 50 percent and that’s again gross profit. But at the end of the day hopefully after fees and running your whole operation, paying taxes and everything else you’re probably down to 20 percent, 25 percent.
JLD: 20, 25 percent. So, kinda maybe if you’re not willing to share the exact numbers or close numbers that you have from CozyPhones, walk us through an example of a product X and what that might look like from the beginning for what you’re getting quoted at manufacturing all the way through to what you’re selling it on Amazon for to then what your gross margins are then to what your net margins are.
Paul: I think that if you take a $20 product, any $20 product, call it an umbrella if you want to, you’re probably looking at spending 25 percent or 30 percent of that as your cost of goods, and that cost of goods is probably going to include shipping to the US. It depends on whether you want to break it out or include it in your cost of goods, and so you’re going to have a landed price of maybe 30 percent of your sales price here in the US.
JLD: So, you’re basically saying you’re looking at between $4 to $5 all in on this umbrella to get it made in China and shipped to where?
Paul: Shipped to the US.
JLD: But where in the US? Is it going to Amazon fulfillment centers or is it going to another distribution center?
Paul: I like to go to a US-based warehouse or to a freight forwarder where then I send it into Amazon from the freight forwarder or in my case when I started it was my local UPS store.
So, I would get a call and say your order’s here and they’d have boxes stacked up to the ceiling, I’d load up my minivan, and I’d take them home. I would expect them. I would prepare them when needed, put Amazon labels on them when needed and then from there I would go into Amazon creative shipping plan and send them in to FBA.
JLD: Now, does Amazon not have their own freight forwarder?
Paul: They have something new called Prime Air, but that’s not really considered – not the kind of freight forwarding I’m talking about.
JLD: So, what? Would that actually pick up your stuff or like load your stuff up in China and ship it and land right next to an American Amazon center?
Paul: You know, I’m not that familiar with all the details of Prime Air. I haven’t used it yet, but I’ve seen some press releases about it.
JLD: So, they don’t have a freight forwarder for Amazon?
Paul: Not that I’m aware of.
JLD: That’s definitely coming. So, we talked about some challenges of physical products. In your mind, what are some of the benefits of having physical products?
Paul: The Amazon business and the e-commerce business is like no business I’ve ever seen. The ability to grow and scale the business is absolutely incredible. Here we are only three years since I’ve started starting with zero and about $5000 in starting capital and then this year we’re going to do over $5 million. So, that’s pretty amazing. That’s a pretty big benefit.
JLD: And is that gross? That’s what you’re doing? You’re doing gross 5 million?
Paul: Yes. That’s gross.
JLD: And your goal is to net about 20 percent of that?
Paul: That’s my goal. Yes.
JLD: That would be your goal. So, if you netted $1 million you would be happy?
Paul: I would be very happy.
JLD: Got it. So, let’s talk about some types of licenses that are best for physical products. Obviously your CozyPhones are great for physical products as far as licenses. What are some others that you think are good or how do you identify ones that would be good?
Paul: I’ve come up with a couple examples of licenses and you can go around your house any day and look for examples of licensing and come up with ideas. To give you an example, if you go on to Amazon, for example, and you just search for kids play tent, you’ll find a lot of generic kids play tent, but then you’ll find one that has Disney characters on it.
The licensing industry is heavily kind of dominated by entertainment brands. So, children’s products are obviously very popular for licensing, but it doesn’t have to be that, like we already talked about. Umbrellas, sporting goods, do very well with licensing, team-related stuff.
JLD: Anything else?
Paul: Cooking, housewares. You can basically walk every isle of the Big Box Store and you can see licensing everywhere you go. I’ll give you a nice example. The other day I was outside and one of the neighbor kids was riding his bike. The tricycle was a Red Ryder Tricycle, he had a Batman shirt on, with a ninja turtle helmet.
I took a picture of him and put it on my licensing Facebook site. It said hey can you identify the free licenses here? So, licenses are everywhere you look.
JLD: Wow. Just open your eyes Fire Nation. It is all around you and it’s really interesting to think that all three of those items, they aren’t coming from some huge company potentially, they might be but they might not be. They might be coming from some Paul Jr. in Des Moines, Iowa who’s supplying those because he saw the opportunity, he made the licensing deals, and now he’s making it happen.
So, unbelievable stuff. Like I have my three-year-old nephew coming into town in a couple days, and he is so obsessed with Spiderman and like looking at him I'm like man, maybe if he’s obsessed with Spiderman to this level that a lot of kids his age are.
So, what are things for three, four, five-year-olds that I could potentially license and make a licensing agreement with whoever owns a licensing brand for Spiderman and make this worthwhile. Like it can really just get those wheels turning because the sky is the limit. The opportunities are endless.
So, we’ve kind of gone through this in a couple different ways Paul, but maybe just really in a succinct way like really bring it home for us on how we can contact and negotiate a license with the license owner?
Paul: One of the best ways to begin is to go to the Licensing Expo and that usually happens around May of each year and to register yourself with LIMA, which is the Licensing Industry Merchandising Association where you can connect with licensors. That would be one way.
Another way is to engage with a licensing consultant who can get to know your product and match you up with the kind of licensors who would like to carry that product or create a partnership with you.
JLD: Well, let’s say it’s June. We’re not gonna wait 11 months for the next May Licensing Expo. So, what are the ways we can connect with these people you’re talking about? What are the best ways? You did it on LinkedIn. How can we get specific here?
Paul: There’s a directory within LIMA so if you decide to spend the money for a membership you can certainly use that directory. Another good way is to network with licensing folks whether it’s in Facebook, I have a Facebook group for that, we also have LinkedIn as I mentioned, and I have a free licensing course you can take at NextLevelLicensing.com. That’ll give you the Introduction to Licensing and talk about some ways in which you can connect with those folks.
JLD: What does LIMA stand for?
Paul: Licensing Industry Merchandising Association.
JLD: Oh LIMA. I was thinking Peru, but I’m glad – but no. Cool, cool stuff. And Fire Nation definitely check out the resources that Paul mentioned. We’ll have it linked up on the shonos page as well, but Paul, let’s end today on fire with you giving us a parting piece of guidance for this master class.
The best way that we can connect with you and whatever goodies you have for us and then we’ll say goodbye.
Paul: Thank you, John. Well my advice is to put yourself out there, place yourself in the path of opportunity whether you’re familiar with it or not. Don’t worry about being uncomfortable and learn new things.
In terms of contacting me, we have built – we have the free course you can go to NextLevelLicensing.com/fire where we offer a three-video series plus My Top Ten Tips, Get Me Started in Licensing, and we have a Facebook group which you can join and network with other licensing professionals.
JLD: Fire Nation, you’re the average of the five people you spend the most time with. You’ve been hanging out with a couple military boys today, so keep up the heat and head over to EOFire.com. Type Paul in the search bar. His shonos page will pop up with everything that we’ve been talking about today.
These are the best shonos in the biz, timestamps, links galore of course head directly to NextLevelLicensing.com/fire and you can start going on that great content anytime you want and any other calls to action Paul in that area?
Paul: No. That’s it John.
JLD: Cool. Well, listen brother, thank you for sharing your journey with Fire Nation today and for that we salute you and we’ll catch you on the flipside.
Paul: Thank you.
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