One of the most common questions I get asked about Oh Joy! and our business is why we choose to create products through licensing vs. manufacturing them ourselves. So I thought it would be fun to breakdown the pros and cons (to me) and tell you why we license…

The funny thing is…some people think we DO manufacture everything that has our brand name on it. And the truth is—other than a stationery line I had briefly from 2007-2009—we only create products through licensing.

So, what is licensing? Licensing is essentially putting your artwork (or designs) onto someone else's product and giving them the rights to that artwork on their product for a certain period of time. Licensing is how you see Hello Kitty on Vans shoes or a football team's logo represented on various products. And how we at Oh Joy! have worked with brands (from large to small) to create such a wide variety of products. Licensing can apply to ideas and concepts, too. But today, we're talking about it as it pertains to artwork and designs on products.

So, here are the CONS:

– You will make less money than if you made and sold the items yourself. You earn either a royalty/commission on sales or a flat fee from the collaboration (fees and terms vary on every agreement) but the partner is making a larger portion of the profit since they are also the ones spending money to produce the product and taking on the risk of investing their money in the manufacturing.

– You may not have full control over where the products sell, the price, or the final quality of the collaboration. You can (and should!) make sure you have a contract and agreement that gives you as much ability to have say over these things as possible, but even with that, the manufacturing partner has the final say.

– Licensed collaborations are usually limited in timeframe in some way. Since these types of partnerships are often marketing focused, they are often intended to be a limited-time collection which offers a product or collection in smaller quantities and/or for a shorter period of time. That's not a bad thing for sales, but often a licensed collection is meant for a short period which can be limiting if you want to be in business creating products in a certain category for a long time. There are licensing collaborations that are longer term (we have had some last 3-4 years) but those are more rare.

And the PROS:

– You can have your artwork on products without needing the capital to manufacture it. This one has been HUGE for me as I saw how much money I spent manufacturing even with my small stationery line over a decade ago. It took me years to pay off the debt I incurred from that part of the company.

– You can try a variety of products without fully committing to one category. I love being able to design luggage, shoes, pillows, rugs, and any other category that excites me and works well with the Oh Joy! aesthetic. But there's no way I could have products in all those categories outside of licensing.  Not only do you need the capital to invest and product the lines, but you also need to find good manufacturers, do research and development, make sure your product complies with federal and state safety regulations, file any patents, etc.  There is a lot of work involved for a single product to be manufactured, so to manufacture multiple categories outside of licensing is can be very difficult for a small business! 

– You don't have to be fully in charge of selling and marketing the products. You still need to put your own efforts behind marketing and selling your licensed collection as it's a partnership and licensing partners want to benefit from any existing customer base that you can bring to it, but the full responsibility isn't only on your shoulders.

– You can earn money long after you've designed something if it does well and keeps selling. I have had a wallpaper collection out for almost 10 years and our best-selling design still sells which I receive checks for quarterly! Passive income is a must for any type of small business whenever possible.

It's not for everyone, but licensing has been an incredible way for us to grow our business and partner with so many brands we love. So I'm always encouraging designers and artists who want to create products to explore it!

P.S. If you're in Los Angeles, I have a couple in-person events that cover the nitty gritty of licensing even more:

1. A panel with Mixbook on Wednesday, August 28th all about how to license your creative work. There will be a range of experts to share their experience and advice!
2. A workshop at the Oh Joy studio on September 29th specifically on how to license your art and design work. I'll cover ALL the steps that it takes to work with a brand and license your work for their products. 

{Photos by CALPAK. Written by Joy Cho.}