Should You Sell Licensed Collegiate and Sports Apparel?
ith fall right around the corner, don’t miss out on a major merchandising opportunity—college team wear and Greek organization gear for the back-to-school and football crowd. Although, we’re still in the midst of the coronavirus pandemic, according to a CNBC article, “The Chronicle of Higher Education has tracked over 1,000 colleges since April and has found that roughly 65% of schools are preparing for in-person classes this fall. That also means that all signs point to students still needing some gear to represent their schools, which may now also include PPE.
If you’re already in the business of selling decorated apparel, the process itself for getting a license may look murky. So, let’s talk about what licensing entails, how to go about it, and the pros and cons of selling licensed merch (with a little expert advice).
Companies, schools, teams and organizations all want to protect their market brand. For example, The Walt Disney Co. doesn’t want (or permit) unauthorized Mickey Mouse prints on T-shirts. That’s where licensing comes in.
To legally print a branded product such as a college logo or sorority letters, a printing company must be licensed by the copyright holder to print the artwork. When you apply for a license, the owner of the image (known as the licensor) gets a fee in advance for allowing you to use their images. Usually, this can be a flat fee or a percentage of income from the sales of these licensed products.
As part of this agreement, the printing company (known as the licensee) verifies quality control and the licensor approves the image usage. “If a sorority wants its letters on a crop top that advertises a year-end keg party, the licensor usually won’t approve it,” says Steve Farag, co-owner of Urbana, IL-based Campus Ink Printing. “Ultimately, a lot of the responsibility falls on you, the licensee, to ensure you’re protecting the licensor’s rights and reputation.”
The Process of Getting a License
Getting a license to sell logoed products for colleges, Greek organizations or sports teams isn’t something you can do in an afternoon. It’s a complex, multiple-step process that takes time. But, it can ultimately lead you to a great opportunity to make more sales.
According to Gary Ficken, president of Cedar Rapids, IA-based Bimm Ridder Sportswear, an apparel and headwear supplier to 300 major and minor sports leagues, including hockey, baseball and soccer, it’s even more challenging at the pro sport level. “The stable is full of licensees,” he says. “Lots of major and minor league teams want to license with companies that offer new apparel or headwear products. That way, they can maximize their revenue streams. Plus, they tend to work with a limited number of licensees.”
If you’re interested in selling licensed materials, here’s the general process to follow:
1. DO YOUR RESEARCH.
Delve into how licensing works and the specific licenses you want. Ficken, whose company is licensed to produce gear for the University of Iowa’s basketball team, points out the vast majority of colleges work with third-party companies that handle licensing for Greek organizations and sports teams. The most popular? The Collegiate Licensing Company and Affinity Licensing.
The CLC approves licenses and collects fees on behalf of the college or organizations. But the CLC (and other licensing companies) don’t necessarily cover every single college and group. If you can’t find the school you’re interested in working with on the CLC’s website, contact the school or Greek organization directly to find out what process they follow.
2. FILL OUT THE APPLICATION.
Now that you’ve located the agency that handles the branding you’re interested in, it’s time to fill out a hefty amount of application paperwork. This takes time, as does negotiating with the contracting agency to ensure you’ve ironed out all the details.
When you apply, you might also need to provide samples of your decorated merch. “Since the agency represents these organizations and teams, you’ll supply product samples to show your quality is up to their standards,” says Farag, who does work nationwide for lots of prominent collegiate Greek organizations including Sigma Chi.
You’ll also need to iron out the financial aspects of the deal. Ficken points out that you’ll have quarterly royalty obligations of 10% to 25% that you need to pay even if you don’t make sales. “When you apply, you’ll include a mini-business plan that shows how you plan to secure sales and what distribution channels you’ll use,” he says. “Some colleges may not want their team gear sold in Walmart, for example.”
3. GET YOUR LETTER IN HAND.
Once you’ve been approved and have received your “acceptance letter” from the licensor, you’ll need to get the initial logo or artwork you want to use approved. “Everything from the colors and the design positioning to the angle of the logo on the product has to be approved,” Farag says. “You’ll need approval from the college, Greek organization or team for the items and designs you want to sell.”
The Pros of Selling Licensed Merchandise
There are several reasons why you might want to consider selling licensed merchandise, especially to the college athletic and Greek organization crowds:
1. YOU’LL REACH A WIDER MARKET.
Once you’re approved for licensing, you’ll be able to reach brand-new customers. “Take, for example, the Greek organization business,” Farag says. “Once you get the licensing for a sorority or fraternity, you can sell to chapters nationwide.” There are nearly 100 national fraternities and sororities with thousands of chapters across nearly 1,500 college campuses. Plus, more than 10 million people are alumni members of Greek-letter societies, so you’ve got a huge customer pool.
2. YOU’LL SCORE REPEAT SALES.
Colleges and Greek organizations accept thousands of students each year, with graduates (and sports fans) moving up to alumni level. The key to these repeat sales? Curate a wide range of apparel and headwear. “The meat-and-potatoes items like 100% cotton tees, hoodies and headwear will get you 80% of the action,” Ficken says. “Remember that some sports fans want higher-end gear and others want price-point goods, so you could offer tri-blend tees and a few in between.”
3. IF YOU’RE A SMALLER SHOP, YOU MIGHT HAVE AN ADVANTAGE.
“You’re likely to earn repeat sales more if you can move quickly on orders, as smaller nimble shops can do,” Ficken says. “If you can offer a quick turnaround, killer graphics, great prints and top-notch customer service, you’re part-way there. Additionally, if you offer a fresh take on artwork or you already have experience in high school sports, you’ve got some leverage. Finally, if you have a strong working relationship with a number of retailers, you’re well-poised to sell licensed goods.”
Read This Before You Sell Licensed Merchandise
Not everything about selling licensed merchandise is picture-perfect. Here are three areas to consider before getting started.
1. CAN YOU AFFORD THE ROYALTIES?
Many organizations require thousands of dollars in royalty fees quarterly, whether you make sales or not. This may hinder you, as it’s a large initial investment if you don’t see profits from sales for a while. Ficken points out this is a big barrier to consider. “You need to know you’ll have sales right out of the gate,” he says. “Generally, that means having a list of retailer partners or Greek-letter societies ready to buy this apparel from you.”
For example, on the team spirit wear side, if you already successfully sell a lot of tourism-related gear into a number of retailers, this is a good opportunity to approach them. “Ask if they’d take a look at you in a licensing atmosphere,” Ficken says. “This is a cart-before-the-horse kind of thing. You need guaranteed sales while you’re applying.”
2. ARE YOU READY TO EDUCATE YOUR CUSTOMERS?
Like Farag’s experience, it can be quite lucrative to get a contract for Greek organizations. “Often, you’ll work with an inexperienced buyer,” Farag says, “so it’s your job to educate them about the requirements implicit in licensing agreements. You’ll probably tell someone more than once that you can’t just print the Budweiser logo next to their letters.”
3. ARE YOU OK WITH GETTING APPROVAL FOR EVERY ITEM?
If you decide you want to add a new item to your inventory, this can expand your sales potential. However, Farag points out that you need to get approval from the licensing agency for every design your fraternity and sorority clients wants. “You’ll get a cease-and-desist if you don’t follow the guidelines,” he says. “A lot of companies print unlicensed stuff, but you can’t do that once you join a community of people paying to do so.”
Selling licensed materials like college teams and Greek gear can be an incredibly lucrative proposition. If you’re ready to commit to the process, this could be the start of a strong new income stream for your shop.
Cover photo by Ye Linn Wai on Unsplash
