Apr 07, 2025 4 min read

When It Comes to Partnering with Brands - is Bigger Always Better?

When It Comes to Partnering with Brands - is Bigger Always Better?

As a product manufacturer in the licensing space, or looking to get into licensing, deciding which brands to go after can be daunting. In just a few weeks’ time in Las Vegas a huge array of brand owners and representatives will build their booths and showcase their priority IPs for the years ahead. Licensees will attend a huge amount of meetings, formal and informal, as well as sign various NDAs to attend numerous partner presentations. There they will be updated with the latest brand news and see trailers and clips of upcoming films and TV shows. 

Deciding which brands to partner with isn’t easy - with so many to choose from, and without the foresight of which ones consumers will love and retailers will support. Licensees decide which brands to partner with based on a wide range of criteria - not just how much they like the look of the IP. Factors such as the financial, and other, terms of the likely deal, previous experience of working with the IP owner; how much they like working with them, how supportive they have been in building retailer support and marketing programs, and how likely they are to support the IP in the long term, as well as what licenses you already have in your portfolio, all also play a part.

So just partnering with the ‘biggest’ or best well-known brands isn’t always the best way to go. Partnering with a film or TV series with a built in fan base which has seen past success both in viewership and licensed products may seem like the obvious way to go. And sometimes it is. But with such IPs come other considerations such as competition, in terms of other licensees that will be looking to also sign that category, which can push up royalties and minimum guarantees, increasing the risk to your business and decreasing likely margins and profits. 

Retailers can only take so many products featuring the same IP. Like everyone else, retailers want to mitigate any risks, so will likely spread their bets, therefore your product needs to stand out against all the other products with the same brand on them. Therefore having the biggest IP doesn’t always guarantee retail listings. Even if retail listings are secured, some retailers want to drive down prices from the get go to stand out from their competition, so this can also then impact a manufacturers margins. Plus the elephant in the room with all licensing negotiations, is that there is no guarantee that the brand will perform as expected and the product sales may not materialise.

That’s not to say that partnering with the hottest TV shows, films or video games isn’t a good direction to go in, and many, many manufacturers do and have grown their businesses exponentially by doing so. But success can also be found partnering with other brands. Licensing can sometimes feel like betting, and at some level that’s exactly what it is. Taking as much information in as you can on a brand and making an informed decision on what it will likely do for your business in the short, medium and long term. 

Many manufacturers take bets on smaller or lesser known IPs that have blown up, and by being one of a smaller number of licensees has meant demand for their products have gone through the roof. Smaller IPs often have more engaged fan bases that are more price elastic when it comes to buying licensed products and have more community spaces that can be utilised to spread the word of new product launches. Some smaller IPs are also incredibly strong in specific regions or territories that can be fantastic vehicles for licensees looking to expand their business in those geographical areas. 

With so many people, particularly Millennials and Gen Z, buying products on their phones and other devices, retail listings aren’t always needed to deliver strong sales. So partnering with smaller brands with dedicated fan bases, often in specific locales, that can be engaged with directly, can be equally as lucrative.  Also retailers don’t want to be competing for the same customers, with the same products, and will want to mix up their offerings with different products and brands that they think will appeal to their existing customers or bring in new ones.

This is especially true if your product itself (the licensed brand aside) is innovative and likely to 'surprise and delight' shoppers. Consumers and retailers are savvy and long gone are the days when a license slapped on a bog standard product was a fool-proof recipe for sales success. The most successful products are those that tell a story. Partnering with an IP can make this story-telling easier, but the product itself needs to play its part. Consumers and retailers are looking for the next craze, or product innovation which will drive excitement, sales, social shares and further sales. 

Social platforms like TikTok and Instagram are driving product sales through the quick and easy demonstration of a product, partnered with influencers with engaged followings. This partnered with an IP with either wide or deep appeal is a potential recipe for huge success. 

It is incredibly important before signing a license, to weigh up all the information and make the best decision based on your business and product offering. There is no one ‘right way’ to engage with licensing and the best route for a business will be to evaluate what the long term goals of the company are and view licenses as a vehicle to achieve them. Is it gaining listings in new retailers? Broadening or deepening listings with existing retailers? Building strategic partnerships with specific brand owners? Using a license to drive awareness of a new product launch? Trying to freeze competitors out of certain licenses or partners? Or trying to break into new regions and territories? 

Whatever goal you're trying to achieve there is a license that can help you get there. From small niche brands with highly engaged, price elastic communities to brands with 100% brand awareness and huge marketing budgets behind them, there are brands to suit all manufacturers and goals.

So to answer the question, no, bigger doesn’t necessarily mean better for your business. At Negosh we have a huge array of brands so check out the Marketplace and Opportunities Board to find the IP that’s going to help drive your business.