May
11

Stationery is a Great Place to Start, But Should I Manufacture or License?

Licensing crosses over so many industries itself, which adds to the intricacies of the business. Since you can license your creative work for a multitude of product categories, all of those products and their various industries, such as stationery, are the vertical markets intersecting the licensing industry.

SURTEX has really moved from its original purpose of selling designs for fabrics to showcasing artists and their agents for all types of product manufacturing. This year for the first time, SURTEX and the Stationery show were held not only at the same time, but on the same trade show floor, and it seemed to be really beneficial for all.

A Word About Stationery Licensing…

StationeryThe stationery product category is a great category for starting your art and licensing business, for many reasons. Of course, providing your art fits the stationery product category.

  • The stationery business follows many fashion trends and colors, so it’s always looking for styles and patterns, icons, graphics and designs that are fresh and new.  Since fashion changes quickly, the stationery business pushes to keep up. Styles may last one season, or a design doing well may last several (3-5) seasons, and that would be an extremely long and successful run at retail.
  • The stationery business, which prints on paper—though not exclusively—can produce new product faster than many other categories, such as ceramics and home décor. The industry is, then capable of changing quicker than most, and utilizes this to its advantage.
  • The nature of the stationery business also lends itself to diversity of product and small exclusive product runs for specialty stores and other upstairs retailers.
  • The stationery business with its huge need for art and on-trend designs is used to working with artists and creators who are new to the industry, and in fact there are many manufacturers who really don’t care if you have other licensing deals.  They know if they like your art, and if you can agree on a deal, that’s enough for them.

All of this is great news for artists entering the business, since the stationery business requires volumes of art and designs to keep up with trends and to fulfill its various audience, lifestyle, holiday and social occasion needs.

Now a Word About Manufacturers…

As the retail marketplace is being challenged, so is that of the manufacturer. If you have talked to one lately, I’m sure they told you:

  • Manufacturers are pressed to reduce their costs to the retailer, so the retailer can keep prices relatively low and still make a profit.
  • Manufacturers are trying to keep costs down in several different ways, such as reducing inventory, keeping overhead costs down, managing with fewer employees, using lower cost or lower quality goods.  Each manufacturer must make these decisions for their brand and company.
  • Many manufacturers have chosen to keep staffing lean and with that the design departments that are small to nonexistent.  And while licensing is an added expense, it is also one way to keep costs down, and pay you for each product sold, rather than keeping designers on staff.

Again, this has provided an opportunity for artists, as the manufacturers continue to look for new art and especially artists who are skilled in product design and production to help compensate for their shrinking art and production staffs.  Another benefit to the manufacturer is being able to tap into the huge pool of talented artists that bring a variety of different styles simultaneously to their product lines, thus attracting a wider audience.

A Story of Two Artists

Two women, both incredible artists with the burning desire to see their art on products and in the stores decided to take a big first step and market their artwork.

The first one decided to manufacture stationery and note cards. She bought a booth at the Stationery Show, which was quite an investment, in addition to producing all the product for sale and marketing materials. Response to her designs and product was wonderful and several independent retailers purchased product for their stores. The woman wished she could get a representative, or better yet a ‘rep group’ for her line—agents who would sell her product to all of the retailers. When she left the show she had more work to do that when she arrived. Whew, it’s a lot to take in, and she began to wonder if she’d be better off licensing her art to manufacturers directly.

The other woman decided to license her art directly to manufacturers for stationery and other products.  She bought a booth at SURTEX, which was quite an investment, in addition to producing her marketing materials and web site. Response to her designs was wonderful and several manufacturers showed interest in a licensing deal. The woman wished she could get an agent to license her collections to all of the manufacturers. When she left the show she had more work to do than when she arrived. Whew, it’s a lot to take in, and she began to wonder if she’d be better off manufacturing her art on products.

Moral of the story: No matter what you decide to do, it always looks like there is more work in your lane to get to the finish line, but it’s probably just the same amount on a different path.

An Important Business Model Decision

Licensing is really just one of many marketing decisions to be made, as you build a business based on your creative talents. If you have enjoyed your creative endeavors and see them reaching a broader audience and creating larger revenue streams, then you are probably considering manufacturing your own product or licensing your art to manufacturers. Both choices are viable and have pros and cons which are based on your specific needs and goals. No one can tell you which is right for you.

So why would you choose one type of business over the other, when wanting to create product and revenue with your art. The following chart shows some of the key benefits of both licensing and manufacturing. Of course, what is the benefit for one method is the opposite, or a negative, for the other and vice versa…it all depends on your perspective.

Two Different Business Models:Your browser may not support display of this image.

Manufacturing Licensing
Higher upfront costs & cash flow required Lower upfront costs
Responsible for creative, production, warehousing, shipping Responsible for developing creative
Must learn about and invest in production of  products, whether paper, ceramic or other Must learn about the licensing business
Responsible for sales, creating distribution network Responsible for sales, licensing to manufacturers
Or finding ‘rep group’ to handle sales Or finding agent to handle sales
Profits are based on sales, less manufacturing costs and overhead Profits are royalty-based, a percentage of net wholesale costs (<50% if using an agent)
More likely to need staff quicker More flexible; can remain lean or solo longer
Total product and distribution control Less control over final creative and product

From a creative stand-point, there are reasons to choose manufacturing and reasons to go with licensing. I have known creative people who tried manufacturing and then chose licensing, and some who went the licensing route and switched gears to pursue manufacturing.  It really depends on your skill sets, drive and how you prefer to spend your time and energy.

Jeanette Smith has more than 25 years experience in the licensing industry, including building the Dilbert™ brand from its infancy to a global corporate icon. J’net created All Art Licensing to share her knowledge through coaching, consulting and licensing all types of creators — artists, photographers, painters, designers, authors, illustrators, non-profits and more —  to maximize the power of their talents worldwide, while saving time and money! All Art Licensing offers a comprehensive resource, including online ‘live’ classes, audio downloads, e-books, templates and workshops, as well as a free newsletter, monthly Q&A and blog. Explore your potential with the training, products and services available at www.allartlicenisng.com or contact J’net directly atjnet@allartlicensing.com

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