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How Brand Licensing Turns Fans into Customers (and Good Products into Great Ones)

How Brand Licensing Turns Fans into Customers (and Good Products into Great Ones)

Interviewer: Brandon Birkmeyer
Interviewee: Stu Seltzer — Author of Brand Licensing For Dummies, President of Seltzer Licensing Group, and longtime NYU professor

What is Brand Licensing?

Brandon: Let’s start simple. What is brand licensing—and why should a business care?

Stu: Brand licensing is the quiet engine behind a lot of what you already buy. You’ve seen it a thousand times: LEGO x Star Wars, Popsicle x SpongeBob, an energy drink that tastes like a candy bar because it’s co-branded with Snickers. If you own a brand, licensing lets you extend that brand into new categories and create additional revenue streams without building factories. If you’re a manufacturer, it lets you borrow a brand’s trust and audience so your product stands out on the shelf.

People don’t just buy products; they buy the meaning attached to them. If I’m a lifelong Mario fan, that logo on a LEGO set isn’t just ink—it’s identity, nostalgia, and joy. Licensing connects those emotions to your product. That’s why it matters.

Brandon: In a partnership like LEGO and Batman, who’s who and how does it actually work?

Stu: Every deal has two sides: the licensor and the licensee. The licensor is the brand owner—Warner Bros., in the Batman example. The licensee is the manufacturer—LEGO—who pays for the right to use that brand on its product.

LEGO is a legendary case study. In the late ’90s, LEGO was struggling—really struggling. In 1998 they took their first big license, Star Wars, and it changed the company’s trajectory. Success there led to Batman, Jurassic World, and a whole universe of entertainment properties. Today, roughly half of LEGO’s portfolio is licensed, and the company is #1 in toys worldwide. Licensing didn’t just add a logo; it transformed a product line of “generic bricks” into a gallery of display-worthy sets that kids and adults obsess over.

Brandon: What kind of intellectual property are we really talking about?

Stu: We focus on trademarks—names, logos, characters, even distinctive colors or sounds. Tiffany Blue is trademarked for specific uses; Reese’s deploys a very particular orange. Patents and copyrights matter in IP, but most consumer licensing is anchored in the brand identity itself—what people recognize at a glance on a shelf or a screen.

We’ve taken the core Scott’s brand in lawn and garden (known for fertilizer) and extended it to adjacent categories—garden hoses, lawnmowers, gloves, sheds—made by expert manufacturers who wanted to tap into Scott’s trust and advertising power. That’s classic trademark licensing at work.

Getting Started with Brand Licensing

Brandon: If I’m a manufacturer hunting for a brand to boost sales, how do I pick the right partner?

Stu: Start with who you’re selling to and where you’re selling. A basic tee company targeting teens might chase a hot movie or gaming property. A men’s lifestyle brand might pursue Harley-Davidson. For women’s tees, you might court a fashion house.

Fashion, by the way, is the original licensing machine. My first licensing job was with Yves Saint Laurent. The couture dresses sold for $5,000–$10,000—but almost everything else was licensed: eyewear, shoes, handbags. A manufacturer like Luxottica builds world-class product and distribution; the designer lends the brand. Each side does what it does best, and the customer gets a premium, consistent experience.

Brandon: Is licensing just for giants—or can smaller companies play and win?

Stu: It absolutely works for smaller companies. We’re fortunate to work with big names—Unilever, the American Red Cross, UPS—but one of my favorite stories is Sterling Sports, a sub-$25M company that made inflatable products. We helped them secure their first NFL license for an inflatable recliner chair. They took it to QVC, it took off, and licensing nearly tripled the company’s sales. The right brand can be rocket fuel—if you put it on the right product at the right retailer for the right audience.

Brandon: Let’s talk numbers. How do deals get structured, practically?

Stu: Most deals hinge on two numbers:

  1. Royalty rate (usually a percentage of wholesale sales).
  2. Minimum Royalty Guarantee (MRG)—the amount you’ll pay regardless, so the licensor knows you’re serious.

A simple example: You forecast $1M in Year 1. At a 10% royalty, you expect to pay $100K. Industry norm is to guarantee ~50% of that—so you’d guarantee $50K. That guarantee tells the licensor you’ll actually market and sell.

Typical ranges:

  • Apparel: ~8% (unknown IP) up to ~15–16% (Olympics, Star Wars, Batman, Spider-Man).
  • Designer fashion: ~12%.
  • Food & beverage: ~5–6% (margins are tighter).
  • Paper goods/trading cards: can hit ~20% (margins are higher).

Every category and property is different, but that gives you a feel.

Are You Ready for Brand Licensing?

Brandon: How do I know if my brand is “ready” to license out?

Stu: We run a simple readiness test (I teach this in my NYU class and break it down in the book):

  1. Awareness: Do enough people recognize your brand?
  2. Meaning: Do they know what it stands for? (Say “Oreo,” and everyone instantly thinks “cookie.”)
  3. Permission to extend: Would consumers accept your brand in adjacent categories? Oreo in ice cream and candy? Absolutely.

Underneath those are more questions for retailers and manufacturers, because your brand has to appeal to three audiences: consumers, the retail buyer, and the potential licensee. When all three line up, your brand is ready.

Brandon: Licensing isn’t just physical goods anymore. What about experiences and digital?

Stu: Totally. Experiences are booming. Think Batman: The Ride at Six Flags—that’s licensing. We represented American Ninja Warrior (the NBC show) and licensed it to a gym operator to create the official American Ninja Warrior Adventure Park. The TV set designers and NBC team weighed in so fans get a true brand experience off-screen.

Then you’ve got digital—everything from gaming collaborations (Fortnite with sports leagues and celebrities) to the NFT moment we all saw (NBA Top Shot, etc.). The form changes, but the principle’s the same: you’re transferring the meaning of a brand into a new place where fans want to interact with it.

Brandon: Any moments where licensing clearly turned a good product into a great one?

Stu: One I love: Westin hotels had nice fitness centers. We helped them license in Reebok and rebrand to WestinWORKOUT powered by Reebok. Same footprint, better perception. Suddenly it wasn’t “the hotel gym”—it was a fitness experience backed by a performance brand. That kind of upgrade can improve guest satisfaction and loyalty with a branding stroke rather than a construction project.

Brandon: How do you engage as an agency? What’s the journey like for a client?

Stu: We serve as an outsourced licensing department for companies that don’t have one. Phase 1 is a Licensing Strategic Plan: we map the right categories and forecast realistic royalties. It’s important to set expectations—movie franchises can do $100M+ in royalties, but many strong corporate brands do under $10M annually. Clarity up front saves a lot of heartache.

Phase 2 is execution—pitching, negotiating, and closing the deals.

On the flip side, we also help manufacturers license in brands. FTD Flowers is a great example: they wanted to reach a younger demographic. We evaluated options and recommended Vera Wang. The partnership announcement alone (at the time FTD was public) bumped their stock about 8%—before a single bouquet shipped. That’s the signaling power of the right pairing.

Brandon: What’s the psychology underneath all of this?

Stu: In my NYU class I show a simple marketing pyramid: awareness at the base, loyalty as you climb. Licensing kicks in at the top, where customers stop being buyers and become fans. Fans want more ways to express that identity—more touchpoints, more categories, more experiences. That’s why a great license can feel inevitable: the fan is already primed.

Brandon: Any final advice—and any cautions?

Stu: Two big takeaways:

  • Build a moat with licensing. The right license becomes a sustainable competitive advantage (to borrow Michael Porter’s term). If Breyers has the Reese’s ice cream license, competitors can’t offer the same product. If your tool line carries the Scott’s brand, rivals can’t match that trust signal overnight.
  • Know the risks. There are real financial and inventory risks, and brand risk if quality falters. Get the right agreements, quality controls, and partners. If you’re new to it, the book is a great primer—and working with experienced operators (in-house or agency) helps you avoid the classic pitfalls.

Brandon: Where can people learn more or connect with you?

Stu: The book is Brand Licensing For Dummies (co-authored with Steven Extract). Click here to find it on Amazon. If you want to talk shop, I’m on LinkedIn as Stu Seltzer. Our agency—Seltzer Licensing Group—helps both brand owners and manufacturers map strategy and execute deals.

Editor’s note: This interview has been condensed and lightly edited for clarity while preserving key stories and examples.