How FADEL Frees Up Toys & Collectibles Producer to Have More Fun

This pop-culture design house and producer of lifestyle-oriented collectibles, toys, and apparel is a favorite of the collector community. Their enthusiasm and creativity have inspired fun and innovative products featuring licenses that span about 120 different intellectual properties under 70 contracts.

When the collector community exploded during the COVID-19 pandemic, this licensee experienced 10x growth in just 4 years. However, their internal operations were not prepared to sustainably support that level of growth or navigate the supply chain challenges brought on by the pandemic.

“We had a good handle on what product margins were; we knew sales and costs; but we weren’t allocating royalties down to the product and customer level, and that’s the third largest line item on our P&L. The vast majority of our volume is licensed products, so not having a system that helped us organize and manage all of our information and conversations or that generated the reporting we needed to give us visibility into our true product performance just wasn’t sustainable for scale. This became clear when trying to deliver on licensor audit requirements with disparate systems and manual spreadsheets. That prompted an internal health check that revealed we needed to invest in a royalty management platform as a business fundamental.”  

The company demoed and evaluated several different royalty and brand assurance systems, including entertaining the possibility of a homegrown system, and in the end chose FADEL IPM Suite. In addition to their needs match with the platform’s functionality, several of their licensor partners, including Disney, Marvel, and Hasbro, use IPM Suite to manage royalties from their end. That made IPM Suite a proven platform choice, and one they knew would integrate nicely to support the needs of their licensor partners in the future. Their investment in IPM Suite enabled them to move away from error-prone manual spreadsheet management, which led to over- and underpayment to licensors and sometimes elicited penalties.

“What really tipped the scales and got this going asap is that I was looking at some of our manual reports for one of our largest licensors and noticed we had overreported sales due to a change in master data, and we would have grossly overpaid royalties. At that point, the FADEL investment became a no-brainer as it basically paid for itself in this one transaction.”

The licensee is using IPM Suite to accomplish their business objectives of:

• accurate, consistent, and timely royalty reporting
• improved transparency with licensors
• enhanced audit support
• stronger compliance, and
• data-driven deal analysis

“What’s really compelling about FADEL is, rather than dealing with issues on the back end once they’ve become violations, we can now catch them on the front end through real-time compliance checks.”

FADEL IPM Suite gives them the processes and visibility they need to confidently manage royalties, plus they can now use the reporting functionality in IPM Suite to analyze future deals, benchmark rates against competitors, and simplify their royalty structure by negotiating more standard contracts with fewer nuances, making them more scalable.

With a reliable technology foundation for royalty operations in place that is aligned with licensor processes and requirements, the licensee can now offer their licensor partners confidence in their payment and reporting timeliness and accuracy. This enables them to establish more collaborative partnerships and grow their relationships with licensors while still focusing on their core purpose–delivering the experience and emotion that remind people to have fun.