![]() ![]() And just like product price, you’ll most likely have to ask for this information. The last component that’s crucial to know is the number of products they expect to sell over the duration of the license (or during a 1-year period if that’s easier for them to share). But we still need another number before you can know for certain which offer is better. Reading this, you might be thinking that the no-brainer option is to go with client B because earning 72 cents per product is a lot better than 3 cents. So between those two offers, there’s a difference of 69 cents you’ll earn and it’s because the product price is different. With that price, you’d earn 72 cents for each tea towel sold (3% of $24 is $0.72). Then there’s client B, a luxury kitchen brand that sells tea towels at a wholesale price of $24. Client A is a stationery brand that sells greeting cards at a wholesale price of $1.00, which means you’d earn 3 cents for each card sold (because 3% of $1 is $0.03). And the reason this number is so important is that the product price impacts the amount you earn on each individual product.įor example, let’s say you’ve been offered a 3% royalty from two different clients. On that note, companies don’t typically share their product prices upfront, so you’ll have to ask them. However, there could be rare instances where the royalty is based on the retail price of a product - it’s important for the client to specify what price the royalty is based on and it should also be included in the licensing contract. In most instances, a royalty is based on the wholesale price, which is the price a company sells its goods to retailers for. The second number you’ll need is the price the product will be sold at, and again, if there are multiple products, you’ll need the prices/price range of each. One thing to keep in mind though is if the licensing agreement is for an assortment of products (like rolled gift wrap, greeting cards, and gift bags for example), you’ll need to know what the royalty % is for each product, as products could have different percentages. The % you’ll receive is the first number you need for any art licensing deal and luckily it’s almost always offered up by the client. The truth is there’s actually three different things you need to know in order to calculate your royalties properly. What information do you need to calculate your potential royalties? Related Article: Streams of Income & How Artists Get It Wrong You can never tell by just the percentage whether a royalty license will be good or bad and it’s because you simply don’t have enough information. ![]() And this illustrates the biggest mistake I see surface designers make: Thinking that the percentage is the ONLY thing that matters and you can know whether a royalty deal is good or not by the % alone.īut that is completely FALSE. But I’ve also seen royalties rates as low as 1.5% and as high as 25%. ![]() ![]() In my experience though, you’ll most likely earn between 3–10%. The royalty percentage you’ll receive from a company varies widely because the amount is based on a number of factors unique to each client. What’s the average percentage for art licensing royalties? They are sent to you in regular payments, usually monthly or quarterly, for a specific period of time (the exact duration should be included in your licensing contract). If it’s royalties, you’ll receive a percentage of the price for each product sold. The compensation could either be a one-time flat-fee payment or royalties. When you license your surface pattern designs or illustrations to a company, you’re giving them permission to use your art on products that they’ll manufacture and sell, and in return, they’ll compensate you for being able to use your art. Not bad considering the design work for those payments was done 1–4 years ago.īut I also see some misconceptions among artists, so I’d like to take a few minutes to discuss art licensing royalties to give you a better understanding of how they work and most importantly, how to ensure you get paid well. I mean who wouldn’t want to see monthly or quarterly checks arrive in the mail?!? For example, I received almost $7,500 in royalties in 2021 alone and that averages out to over $600 per month. ![]()
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