Swiping Right: Cautions for Using Online Matchmakers in Licensing

In today’s fast-paced digital world, finding the perfect partner—whether romantic or professional—has evolved significantly. Online dating apps have success in leveraging sophisticated algorithms to analyze profiles and make potential matches. These matches are identified by input criteria, including interests, personal preferences, location, etc. Now we are starting to see digital business matchmakers use similar algorithms to connect brands and potential licensees. While this does seem helpful and efficient at first, there certainly are red flags, just like the dating apps, that one needs to look out for.

“That’s not what his profile picture looked like!”

Digital matchmakers are only as good as the content they are analyzing. A well-crafted profile, either for yourself or your company, should be honest and detailed. Everyone has heard the story about the person that lied on their profile, only to be stood up at the restaurant because they look nothing like their photo. What happens when a business isn’t completely truthful on their profile? We believe these business matchmaking services could be helpful in narrowing down a list of potential partners, but you should absolutely do your due diligence in researching them yourself.

All the Cards are on the Table

Do you share your family secrets with a potential partner before the first date? When brands available for license are creating their profiles on matchmaking apps, they are locked in to sharing specifics of what they would be interested in. These specifics include required royalty rates, minimum guarantees, territories, and product categories. While this allows the algorithm to analyze more effectively and bring in potential partners that are aligned, it also pigeonholes the brand to those numbers. Partnering with a licensing agency instead will give flexibility to tailor proposals and terms to different opportunities, empowering your agency to get you the best deal available.

Kissing All The Frogs

Shane Co conducted a survey in December 2022 and found “The Average American will swipe 3,960 times before finding a partner.” I don’t like those odds for trying to find a potential business partner. Time and resources dedicated to kissing all the frogs can be substantial. Furthermore, what happens if you don’t know they’re a frog until after the deal is signed. One puts themselves at risk signing a deal without truly getting to know their business partner. This is yet another reason partnering with a licensing agency is beneficial, as they have the sales resources and business relationships to vet potential partners efficiently.

The Cost

Speaking of all those times you swipe left, think about how much a membership fee is for all of those “declined opportunities.” Just like an online dating app, these business matchmakers charge a fee to have access to the opportunities before even knowing what they are. Then, when a deal is executed, there is typically a fee or percentage of royalties that they are entitled to. Working with an agent does cost money, but what you get in exchange for the agency fee is far better. Agencies’ earnings, because it is truly earned, cover the management of the program far beyond the execution of the deal. IMC’s program management service is where we feel most helpful to our clients, as we manage the product development process, compliance, quality control, royalty accounting, performance analysis and renewals, all to our client’s unique standards.

Online dating has revolutionized how people meet and form relationships. With just a few swipes or clicks, you can connect with potential partners from across the globe. While licensing matchmaking services offer the same convenience and breadth of options, it’s essential to recognize the risks and approach with caution. Using the services of a licensing agency mitigates these risks and invigorates a program with human expertise. If you are interested in licensing your brand, let’s connect!