Slay those Dragons, Fear No More!
(Artwork provided by the wonderful, fun and talented Sara Jane Franklin.)
When you need to have your sink unclogged, there’s little difference in price from plumber to plumber. I think that at one time in the past, the wise plumbers got together and said “let’s all charge the same high price so we all get paid well!”
If only artists could do the same, then pricing would be so much easier!
In the art business, while one creative can garner $10,000 for a painting, another can only get $500 for the same size and medium.
Many artists have a hard time financially because they just don’t know what to charge.
Often, artists will turn down a good opportunity because they are paralyzed by the fear of making a mistake and charging too little.
And when it comes to licensing your art, there are many different ways to be compensated.
Licensing Art means – you retain all copyrights © to an image, and license, or “rent”, the art to someone for either a one-time use, such as in a magazine or advertising campaign, or for a longer term use to print on products, such as a t-shirt line or pottery, greeting cards, etc.
(For more on art licensing: sign up for my FREE ten week series called “ART LICENSING MADE EASY” which teaches how to license your art, negotiate contracts and know what to charge $$$. SIGN UP HERE! )
FEAR THE LICENSE DEAL NO MORE – I promise you that once you begin to understand how these things work, you’ll feel more confident with deal-making.
With confidence comes more deals, and no more lost opportunities. So please, read on!
The most common methods of pay for art licensing are:
1 – ROYALTY: This is where the manufacturer pays the artist a royalty percentage of their gross sales.
2 – ROYALTY WITH ADVANCE UP FRONT – Sometimes there will be an advance payable up front, which is later deducted from future royalties.
3 – FLAT FEE – A one-time fee is paid instead of royalties.
Okay, but how much moola do you ask for?! Below are a few guidelines:
ROYALTY PERCENTAGE PAYMENT:
Before we get to the topic of how much to ask for, let’s make sure you understand how royalties work.
Royalty payments are calculated based on the total (gross) revenues generated by the licensee (manufacturer) for your products.
Red Flag Warning: Never agree to get paid your percentage based on the Licensee’s revenues minus their expenses. This is an impossible number to quantify.
ROYALTY RATE EXAMPLE: Let’s say that you have agreed to license your art to Perry Pickle Manufacturing for t-shirts. They plan to sell the t-shirts to a chain of stores called Racey’s. You have agreed to a royalty rate of 6% with a $3,000 Advance up front.
This means that Perry Pickle Mfg is going to pay you 6% of their total gross revenues generated. Since they agreed to pay a $3,000 Advance up front, they paid you the advance at the time that the contract was signed.
In their first quarter, Perry Pickle Mfg received $100,000 in revenues for t-shirt sales of your line to Racey’s.
That means that you would receive a royalty payment of $6,000.00 ($100,000 x 6% = $6,000.00), MINUS the advance of $3,000.00 up front.
The advance is “recoupable against future royalties” so your first royalty payment would be the $6,000 minus the advance amount of $3,000, and you would have been paid $3,000.00.
Okay, now let’s talk about how you arrived at the 6% royalty rate:
ROYALTY RATES DEPEND ON SEVERAL DIFFERENT FACTORS, THE 3 MOST IMPORTANT:
- The TYPE of product being produced
- The QUANTITIES expected to be sold
- The POPULARITY (STRENGTH) of the artist or brand
THE FIRST FACTOR IN DETERMINING ROYALTY RATES is the type of product being produced. The average royalty rate varies from product to product.
For example, the average rate for art lithographs ranges between 5% – 15%, compared to 3 – 6.5% for wristbands. The average royalty rate is a good starting point for determining what the rate should be.
There are a few resources that will help you learn what the average royalty rates are, such as artists groups and reference books.
To find out what others are being paid, connect with artists who are experienced in licensing through online forums and groups such as Linked In. Ask the members what the average royalty rates are, in their experience, for a particular product. These groups can be very helpful.
THE SECOND FACTOR IN DETERMINING ROYALTY RATES is the expected (or projected) sales volume.
The higher the volume, the lower the royalty: If the products will be sold in mass market retailers and in mass quantity, the royalty rate will be less because mass market retailers (like Wal-Mart, Costco) demand better prices, which means tighter profit margins for the manufacturer.
Usually, an artist will earn more money from a lower royalty rate when products are being sold in mass market, than they would with a higher royalty rate for products being sold in small mom and pop shops.
The lower the volume, the higher the royalty: If the products will be sold in specialty stores and in smaller quantities, the royalty rate should be higher.
For example: A t-shirt manufacturer that sells in mass market stores (Wal-Mart, Target, chain stores) might pay 4-6% royalties. A t-shirt manufacturer that sells in smaller channels such as core skateboard shops might pay 6-10% royalties.
If the artist is well known and their art is a proven seller, the royalty rates would be on the high end of the scale. If the artist is unknown and new to licensing, the royalty rate might be on the lower end of the scale.
In some cases, a licensee that works with artists on a regular basis will have a standard royalty to offer to you. At that time, you can decide if you want to accept their offer, or negotiate for more
FLAT FEE PAYMENT: A flat fee is a lump sum that is paid up front at the time the contract is signed. There are no royalties that will be paid later.
Flat fees may be calculated by image (i.e. $500 per image x 10 images = $5,000); or they may be paid in one specified sum (i.e. $2,500 total).
The flat fee method is best when the licensee is either a small company that does low volume, or is a start-up company that does not have a track record of sales.
The disadvantage to a flat fee royalty is that if the product sells above expectations, you may be missing out on sharing a piece of those revenues.
The best way to protect against the possibility of missing out on a piece of a great selling product is to have a short term, such as a one year or eighteen month contract.
With a shorter contract, if sales are very good, the licensee will want to renew, at which time you will be paid again, or you can negotiate for a better deal.
How much of a flat fee should you ask for? Like all deals, the range is wide. I know of some artists who charge as little as $100 per image for a flat fee license. In the greeting card industry, an artist might be paid a flat fee of $275 – $500 for a card design. I’ve had deals in the action sports market where I charged a flat fee of $1,500 per image, with a price break if they license multiple images.
The flat fee amount that you get will depend upon: 1- the strength of your brand, 2 – the competition in the industry and 3- what the licensee is willing to pay.
The most important thing is that you get paid what you feel that your art is worth and that you are happy with the end result.
ADVANCES: An advance is a dollar amount that an artist is paid up front, due at the time of signing the contract. The advance is usually non-refundable, and is deducted from future royalty payments.
What I love about advances is the most obvious: you receive a payment up front.
Often in licensing deals, you won’t see royalties for a year or more because it takes that long to develop a line, sell it and get it shipped to stores. The advance is money NOW, which is when most of us need it.
I use the advance as an insurance policy should something go wrong. It hedges against the possibility that there will never be royalties paid in the future, because if a company is willing to pay an advance, than that means they are committed fully to the product sales. Without commitment, sales often won’t happen. Sometimes the products never make it to the marketplace or are dropped from the line.
And that means No sales which means No royalties.
The main reason we almost always require an Advance for Drew’s work is that it helps me to weed out the serious people from the not-so-serious.
If a company is willing to pay us an advance, I’m more convinced of their commitment to the success of the product sales.
Red Flag Warning: If the deal you are about to enter into is going to require an excessive amount of work on your end, it’s crucial to require an advance or a design fee to cover your time. That way, you don’t have to wait the 12 months or so that it takes for royalties to generate before you get paid.
Since there is no guarantee that a license will generate any royalties at all, an advance is insurance that you’ll be paid something in the event anything goes wrong.
What could go wrong, you ask?! The client is so excited and they plan to put a lot of effort into the line.
One personal example is when we did a deal with one of the largest toy companies in the U.S. They went bankrupt one month after we gave them the artwork for a kid’s skateboard line. Drew had spent weeks working on it. Thank God we were paid a generous advance so that Drew’s time was covered.
Another time we signed on with a kid’s clothing company. They had their Drew Brophy line ready to go, after weeks of work on our end. Then a new partner came in and changed everything. The line never made it to retail and no royalties were generated. We had been paid an advance up front, so we didn’t lose a month’s worth of work for nothing.
The flip side to all of this is that for every deal that isn’t successful, there’s one that is successful. You have to sign on with many companies because some will be duds and some will be good.
Remember, there are no set-in-stone pricing structures for licensing or for art deals. You have to be creative and come up with a deal that works for you and for your client!
Maria
PS: Read “Beware of these Red Flags in Contracts“ for more food for thought.
Would you like your own licensing agreement template that you can use again and again? My new LICENSING AGREEMENT/CONTRACT TEMPLATE PACKAGE is now available. This package makes it easy for you! Complete with a template that you can change as needed, and instructions, this is the perfect short, simple agreement for artists not yet ready to hire an attorney. More details here: Licensing Agreement Contract/Template
I really like your straight-shooter style of writing. Very clear, basic and understandable. Very useful information, yet again. I especially loved using the name Racey’s as an example of a chain of stores (it made me chuckle a little).
Lorenzo, thanks for saying that! The name Racey’s made me chuckle, too, but not as much as Perry Pickle!
Maria
Excellent and straightforward. Thank you. (If only more artists would take the time to read this!)
It’s the number one question I get from artists, and also from potential clients who aren’t familiar with how art licensing deals work. I hope this helps shed some light for others. Thanks, Marie!
Great post Maria! Very clear and useful explanation. Thank you!
Thanks, Sara, and thanks for allowing me to use your AWESOME artwork for my post! I love all your art, it was a hard choice to make!
Terrific info, thanks!
Thanks Maria, good stuff and succinctly stated. Hope you are both well!
I just got approached for what could possibly be my first licensing deal. Your blog post helped clear a lot of things up for me. Now to just to take a deep breath and compose perfect email reply and see where it takes me 🙂 Thanks Maria!
Thank you for this post on various artist pricing scenarios. I appreciate your time and knowledge.
Hello Maria,
Thanks for you valuable information. I have been doing business with a few regional stores, selling them my regional artwork directly. It has gone very well. Today, I was asked if I would be willing to license them to sell puzzles and greeting cards but feel I may miss the opportunity if I am not fairly prompt in my response. Any suggestions that will expedite my getting educated but not cause me to lose the deal? This will not be a high volume deal.
Thanks!
Jim
Hey Jim,
Congrats! This is where many artists miss opportunities because they aren’t able to move to the next step. Here’s what you do: Ask a lot of questions (how many will they produce, where will they sell, how many images do they need etc.) then ask them to send you a Deal Memo with their offer. Make sure you ask for an advance – the amount is determined by the answers to the questions you ask. Go for it! Let me know how it goes! PS: I offer consulting to help put these deals together – visit my consulting page for info.
I am looking to hire an artist to design my ideas and I am really a startup with no current sales. Let’s say I tell her, I want you to draw me a monkey in this size, shape and color for my t-shirts. What would be a fair licensing % for her as this would be my idea and design. I would appreciate your thoughts and responses.
Bluntz, that’s a great question. Often, our licensing clients ask for something specific. Regardless, the artist always retains the copyright, unless you buy the art outright. The royalty % doesn’t change when you direct the artist. It doesn’t usually make a difference in licensing.
In your case, since you know what you want and you have little capital, you may want to find an illustrator that doesn’t necessarily license their art, but rather, will create what you need and sell the art to you outright. In that case, you would pay a flat fee upfront, and then there would be no royalties, as you are now the owner of the art.
Dear Maria, I would like to apologies for not thanking you earlier. I’ve been travelling for work and my inbox was full of junk mail, I just saw your message. Thank you for clarifying the two scenarios.
Hi Maria,
I am hping you can help. I have been approached by a merchandising manager, looking to put one of my designs onto mugs, canvas bags, cards etc for their club. I noramlly just sell my artwork as framed pictures/illustrations for £80. Their question was whether they could just commssion a piece of artwork and then use it on products or if they could license it? If I get the work licensed, who does this for me, is it a lawyer…I am in unknown territory and I said I would get back to the merchandising manager in a few days….Very exciting but out of my comfort zone! Laura.
Great Article Maria…!!!
Keep being so informative about Art.
Hermes H Art. NY.
“The lower the volume, the higher the royalty”, everyone in the art business should be aware of this. I think this is also the best thing to consider in getting unique art designs intended for t-shirt printing.
Maria, a thousand thanks for the great article! I am placing every word to memory. I am trying so hard to get my work into the card busines. Thank you for the information.
Maria, I fortunately stumbled on this wonder website of info….Your ability
to impart information and the manner in which you have chosen to lay it out is so exceptional…If only there were classes that could teach us all to be able to do this for our chosen fields ……
Thank you I have learned so much so fast..
To return to my original quest without chancing to ask you for a point in the right direction seems like complete folly…..So I must …..I am trying to help a very talented and committed youngish artist to find his way out of the backwoods of Northern California. I realize as he does the competition is fierce . I have been planning to suggest that he send some of his art work that he has copy write(?) . To a few publishing houses as his work is very much centered in the contemporary style..skate art.metal bands, but very very talented….he could do other works with ease as I have seen ..but his passion lies there for the most part . I fear that if I fail to help him even in the smallest of ways he will continue to work without ever knowing how truly talented he is and what he can contribute to the future in art and life. If there is any direction that you might be able to point me in or suggest that he should pursue…You would never regret it. If only I had some practical ideas due to knowledge even from any related fields or experience……other then that I have had the opportunity to seen truly great works of art of all kinds and that I can use a computer ens-pa? if not I thank you for what I have just learned. T. Cooley
Terrie, thank you for the comment and the kind words. I’m glad my articles have been helpful to you!
Not every artist longs for a career in art. I have found that the commitment has to be there for an artist to find success.
In other words, you can’t do it for them. As noble a concept as that is… They have to want it bad enough to do it for themselves.
That being said, the artist has to decide which direction they want to go in. There are a thousand ways to find success as an artist, and it’s a personal choice.
Some choose to go the commercial route. Some are opposed to commercializing their art and take the fine art route. And yet others choose to paint for their own pleasure and not make it a career at all.
There is no right or wrong, just the decision the artist makes for themselves.
If you want to help this artist, first help him get clear on what he wants for his future in art. Where does he want his art to be seen? Does he want to earn a living from it, or does he want to do it for his own pleasure as a hobby? Does he envision it making a difference in the world, or just bringing joy to others? Does he want to become well known in the world, or does he want to focus on his local community?
That is the first place to begin – the artist gaining clarity on what he wants. And from there a plan can be made.
I hope this is helpful to you! I wish you the best! 🙂
Maria , Wow that was quick ..The more I look at this site the more I like it.
Thank you for the advice I agree with you entirely. Unlike yourself I do not possess the ability to make my self very clear ….. The artist I was speaking of is aware and wanting some direction. He has tried to get his art work out to the masses and has had small successes but his remote local and limited funding has made it very hard to make that happen. Some people just are not experienced in the marketing end of this business and do not know were to start .There are very few opportunity or places close by to try to get his work seen and there is not a large tourist trade here either.
Do you do private consulting on line ? Or do you know some one that does? not for free of course. if so We would appreciate any contact info Thanks T Cooley
Terrie, thanks for clarification! If the artist you wish to help is living in a place where there is little opportunity, then it is time to leave that area and move to where there is opportunity and more people to buy his art.
Most entrepreneurs have limited funding in the beginning, not just artists. For example, all the immigrants that come to the U.S. with no money at all, and in ten years many have built up a business and end up thriving!
When I quit my job in insurance to work with my husband full-time, there was no salary for me. We had to figure out how I could make more money with his art so that I would get paid. It took time, and a lot of sacrifice, but we did it. And I’m so glad we did.
So, that being said, people have to leave their comfort zone and take risks if they are going to find success in what they want. Not everyone is cut out for risks, and so it’s good to recognize that as well. But for those who can make a big leap, there are rewards for them.
To answer your last question – yes I do consulting by telephone. Please click on my “consulting” page for info on how that works.
Thank you!
I have been contacted by a designer who has shown my paintings to a client who wants a large (34″ x 24″) print of a painting. She talks about a one-time use fee, they do the print, but needs pricing from me. I am new to this and am thrilled with the offer but Is there a scale I can use, i.e., 10″ x 16″ is $50, 18″ x 24″ is $100 and on and on? I initially threw out $300 for this large of a print but she just emailed and said that is above their budget. I am thinking $200 for this size but would like to make an intelligent response. Your article above is great and intend to read the rest of your info but I need to get back to her. Thanksso much for any input….Pat
Dear Pat, congrats on your offer!
First, NEVER NEGOTIATE AGAINST YOURSELF! You gave her a price, and she said she can’t afford it. Do not come back to her with another price. The ball is in her court now – she needs to tell you what her budget is.
But, besides that, normally I would never give our files over to a client to print one image.
We would instead have the print made ourselves, and bump the price up by about double to sell to the client. (For example: If the print cost me $220 to have made, I would sell it for $440). This is one way to price it.
The reason I don’t like giving a digital file over is this: how do you control what the person does with it?
I recommend that you do this: before getting back to her, do some homework. Call around to print shops and get a price for having that size print made.
Then, increase that $ amount so that you are making a profit (double it, or add 80% or whatever feels good to you.)
Then, email the client and tell her what the cost is for you to have it made. Let her know that you don’t hand over your digital files, but you are happy to have it reproduced for her.
And thank her for her business. Hopefully, your price fits within her budget.
Let me know how it goes!!
Thank you so much Maria for your prompt reply and valuable advice. I will indeed do some homework to ascertain cost of getting the prints myself. Let you know how it turns out.
Hope your holidays are merry and bright!
Peace, Pat
Hi Maria, I make collages and was recently approached by a clothing company interested in using my art. They throw parties with “large scale DJs” (their words) and sell mostly t-shirts at shows and online. They want to use 2 or 3 of my images (probably a flat fee) for limited runs of 50 t-shirts each for an upcoming line. Obviously I would like to retain copyrights etc. but I’m pretty new to licensing and really don’t know how much I should be asking per image. They’re not huge but have a pretty decent following on facebook, any advice you have would be appreciated, thanks! -Jesse
Jesse, thanks for the comment and for reading my blog! Typically you would get $600-$1800 for each t-shirt design. (We charge $1,200 per design for existing art and more for new art, and offer a slight discount if they use more than one design.)
If they are using existing art, for a very small company, you could charge anywhere from $600 – $1,200 for the for the rights to use the art for 2-3 years. If you are creating new art for them, I’d ask for anywhere from $900 on up, depending on the amount of work required to create it.
I’ve known some artists who will charge only $500 for tee designs, but they are the artists that are just starting out, or haven’t yet figured out a good price structure, or are struggling terribly (because they don’t charge enough.)
The more designs a company uses, the less I’ll charge per design. For example, if they are using 3 designs at once, I’ll drop the fee per design by $100.
You always retain your copyrights – don’t sign them away. It’s your art to keep. You are only granting rights for them to use it on tee shirts.
Make sure you get paid BEFORE you hand over the files. This is important!
Ask for samples, too. Good luck!
Thanks for your prompt response Maria! I quoted them a price, haven’t heard back yet but I feel more confident about the process now 🙂
Maria, I love this Information. My ? is, If you are working for a known sports Icon to negotiate sports apparel into major chains and they want EXCLUSIVITY, i.e. Sams or Costco and they ask for signings to be included in the contract, what’s the max can I charge for each Design and what time frame should I give them to impress my client. I will also be getting an advancement, does it sound like I’m covering all of options?
Mickey, thanks for the question! There’s a lot more info I need to be able to answer the question. I’m not sure i understand – are you licensing your art to Costco or to the manufacturer that sells at Costco? What do you mean by “signings”? Is this a live event? I could possibly help you in a consulting session – there are too many moving parts to give a good answer in a comment!
Great info, Maria. I hope lots of artists will read it too. Recently, for a European contract for art to be printed on a mass produced product, I was told that they should be expected to pay more to the artist due to the quantity of items the art printed on. So, every deal will vary and it is always a case by case consideration. In this instance *mass produced* was still a high end / gourmet product, and that’s what made the difference.
Also, recently I signed a contract with BP (British Petroleum) for advance payment and royalties. (This news was published in a trade publication along with my name and address, so it is not confidential.)
My royalty payments will be monthly and based on the amount of oil produced by the oil well. My land sits on a large oil pool, so BP is required to pay me for my mineral rights. The well is about a mile away from my property. But my art licensing experience proved useful when dealing with BP, and it was interesting to note that all contracts that include advance payments and royalities are similar across all industries.
Hello Maria,
Thank you for helping artists who are wrestling with questions regarding what kind of fees to charge for their art. I’ve recently had someone contact me, who works for a regional commercial community,.about using my images in a multi-tiered manner. They wish to include the images in a curriculum package for their community outreach program to regional schools, as a means to promote the commercial area. They also want to use my black and white drawings on their website and to make my images available to be able to be downloaded for use as curriculum aids by educators for their classrooms.
They found my work via a self published book which contains the images they seek to use. I am not interested in a ‘Buy Out’ of my work. I wish to retain the rights to all of art, to use at my discretion. I would be willing to grant them a non-exclusive license of my work for their use. However, the challenge is what to charge them for their multiple uses.
My book contains 14 B&W illustrations. A flat fee is probably what they wish from me but given the ongoing use of my work via their website as a downloadable product to be used by educators as classroom curriculum and the long term use of my work by the commercial group for promotional purposes, I am befuddled as to how to determine a fee to quote them.
Being a virgin to this sort of contractual business, the following may be a very dumb question. Are there generic licensing agreements that I can find online to use to complete this agreement?
Any help would be greatly appreciated!
Many thanks!
Reg Miles
Dear Reg,
To answer the question of what to charge, there are many more details I would need to know first, and for something like this, it would take a little research and questioning the company as well. Such as – will they be charging for downloads, or will they be free? How many educators do they work with? How many downloads will be used?
You do not have to sell your art outright – this would be a licensing deal, where you retain all copyrights and simply give them written permission to use your art for short period of time (i.e. 2 years) for a specific use (i.e. educational aid downloads), in exchange for an advance and royalty or a flat fee up front.
For your 2nd question – yes, there are sample “generic” licensing agreements that you can copy and change to meet your needs. You can find them The Graphic Artists’ Guide to Fair and Ethical Pricing. I highly recommend this book, as it is full of info!
If you want help developing a deal for this company, I am available for consulting. Review my consulting page to see how I work, and shoot me an email to set up a time!
Maria,
Thank you for your response, your insight and kind suggestions. I’ve ordered the latest copy of the book that you mentioned.
No, they don’t wish to charge for downloads. They want the images available for free, for educators to use to enhance their curriculum. The number of schools and classrooms in the region are many. Since all 14 of the images will be used, the number of downloads would be determined by the number of students in each classroom. About 25, 000 students and their educators have, thus far, participated in this program. That’s potentially tens of thousands of downloads.
I’ll check out your consulting page.
Maria, I’ve just received a contract agreement and it states, the Licensee agrees to pay Licensor a royalty of 10% of the “Net Sales” ( meaning sales to customers less frieght and credits ) Should I consider this a Red Flag?? If so, what do you suggest I do?? Thanks, Renee’
Hi Maria,
I’m a freelance illustrator. I was contacted last night from someone who is interested in using one of my illustrations for a story that she has written. I’ve heard of art licensing and I was wondering if this would apply to self-publishers/authors who have written a story and would like to use one of my images that is already created.
I have a 11th edition of GAG Pricing & Ethical Guidelines book and it the long and short versions of licensing contracts.
The only details I have so far from the email is that this person is from England, would like to know how much I charge for use of my images. She really likes my Capuchin monkey illustration (http://gigistudio.com/blog/2011/07/14/a-clever-capuchin/), and would like to potentially incorporate one with a story she has written.
I haven’t replied to her email yet, So haven’t asked if she will be selling this story. Or, asked what her budget is. Are there any other questions I need to be asking?
I have a basic Illustration Agreement in place based off of GAG contract. However that’s more for creating new works. I need some tips on what to do if someone would like to use artwork I already created. My main concerns are keeping all by copyright, non-exclusive, not having my work retouched or altered in anyway, be credited, receive free samples, limiting the use of how my images can be used and for how long, and setting appropriate pricing with advance and royalty fees. Also, my work is digital so I definitely will not be sending my original files. I also sell prints of my work on etsy.
At the moment I can’t utilize you consulting services. So any tips you can provide will be greatly appreciated.
Thanks!
Gigi, congrats on your new opportunity! If someone wants to use your art, existing or new, for anything, a Licensing Agreement will lay out the requirements that you want. For example, a good license agreement clearly states that the Artist retains copyright, that the artist gets to approve everything before it goes to market, and what the art will be used for specifically, for how long, and where. You can find a sample agreement in many books, or you can get one that I put together here: http://store.drewbrophy.com/artist-short-licensing-agreement-template-package/
Good luck! 🙂
Thank you Maria! I pulled together a few questions to ask the individual first to gain some details on what she is looking for. If it’s possible can you look over my questions and tell me if I’m on the right track in what I need to be asking.
To license my artwork for story/book:
1. Will this be a self-published book? If so, what is the Publisher/Printer’s name?
2. What is the title of your story?
3. Will this be a book published to sell? If so, how many will be in the first print run (number of books)? What will be the retail price and the wholesale price?
4. What is the geographical location the artwork will be used and sold?
5. How long would you like to license the artwork?
6. Will the artwork be used just for the book? Or, do you require other uses?
7. Do you have a budget?
hey maria,
first of thanks so much to you and drew for all the inspiration and good juju you put out there. i have recently been asked to sell a design to a local obx restaurant for a t-shirt and i had no idea how to go about it. my first step was to google ‘how to price t-shirt design’ and could’t find anything helpful until i came across this blog. i responded to restaurant by asking for 8% of total gross sales of t-shirts with my design and my pay period would be monthly during the ‘tourist’ season and i would only collect once during the offseason considering the obx thrives during the summertime. i know this is small potatoes compared to what you and drew deal with but please tell me if you think this sounds good for my first t-shirt deal.
thanks so much
brad vuyovich
“BroRad”
Brad, in the case of a small co., I would do a flat-fee, payable up front. Don’t bother with royalties with small companies. Royalties only work in your favor if the licensee is selling to chain stores, department stores, etc. (in high volume)
I do in fact have designs that would be great for Tshirts as well as coffee mugs, posters, etc. How do I narrow my search to potentially interested parties. I am interested in Royalties
Look for companies that are producing products and tee shirts that sell to the demographic that would like your art. For example, my husband Drew does surf art, so he works with companies that sells to the surf crowd.
Hey Maria, I’ve been scouring your site over the last couple of days and want to thank you for all the amazing insights into the business side of art. I’m a serial entrepreneur and have recently put down most of my projects to help my fiance build her business (sound familiar?). She’s just hit a point where we’ve had our first major licensing requests come in this week, all at the same time, and I’m playing catchup since my background is mostly in marketing. Hopefully you wouldn’t mind answering a couple of general questions:
– If a basic contract point is omitted (e.g. exclusivity nor non-exclusivity is mentioned anywhere in the contract) who does the favor fall to in a dispute?
– What is your default response to client’s that claim they “just want to keep things simple” by avoiding lengthy contracts (which fuels my first question)?
Again, thanks for all the great information and in advance for any other information you’re willing to share. Looking forward to devouring your templates and packages once the resources free up!
– Rory
Rory, thanks for the comment! To answer your questions –
If the contract omits exclusivity, it would be non-exclusive.
Clients who don’t want to sign anything – they are putting themselves in jeopardy. It’s in their best interest to have a document giving them the rights to use the art. Otherwise, you could later sue and say they didn’t have the rights – or if you died and your family inherited your copyrights, your family could sue.
Hey Maria, your responses to these questions that I would have asked, but already have had answered, thanks to your website, come very quick and that’s invaluable to us artist who have yet to embark on the licensing journey like myself so thanks a million first-off and Congrats on all your success. My ? is can I use the same designs or more specifically same concept of the design but different designs of that concept with two different companies such as a skateboard company and clothing line? Also, who do I contact if I wanted them to see an example of my designs? I’m concerned about wasting my time trying to reach or contact the wrong people. Thank you very much for your time and response.
Sherif, yes, when you license the art, you can use the same designs for multiple companies and products. Just make sure your contract doesn’t prohibit you from doing so. A general rule to follow, though, is to not license the art to companies for the same products, especially competitors. You want to be careful with that.
When contacting a company, ask for either the licensing manager, or the art director or someone in the art dept.
Hey Maria, thanks for the response. I have another question. Whether I get a flat fee for my designs or I get paid paid per design, do I still have a say in how long they use my design or how long I want my design to be used on their product? Also, do I have a say in how its used on their products?If I were to walk into a skateboard shop (there is one at the bottom of my block) and I were to work out a deal where I license them 5 design, is it my job to produce the artwork on the board itself or do I just license them my design that is on paper and they put it on their product (in the case of any company that may want to license my art)? Lastly, Is it best to have my work copyrighted first before I send any digitals or anything to anyone who may want to see something? Sorry for all the questions, but your answers are very helpful. Thanks again.
Sherif, you always have a say in how long anyone uses your design, regardless of how you are paid. You own the art, so it’s your call.
Your 2nd Question: Yes, you have a say in how it’s used on their products, if the contract says you do (and it should).
Licensing is typically when you give the art to a manufacturer in a digital formal, they print it on their products, and then they sell it to the retailer.
Yes, you should copyright your artwork always. But, if you haven’t yet, you can still show it around. But know that a copyright will give you protection in court should someone steal it.
Thank you for this post, Maria! Your blog is a wealth of information and resources for artists + designers!
Hey Maria! First off, thanks for writing the article to begin with. I haven’t had the opportunity to do so yet, but I’m sure it’ll arise. Down the road in some time, whenever a company would like to use me to create work for them that they own the rights on, what should be charged? I’ve always thought it would be a good place to start to put a number like 10x on my hourly. Which would bring larger prices that I’ve read about into perspective; what top corps are paying for work done and want to use them all over the world in many forms. For example the newest BBC logo (the entire logo set) was done for about 80k in a little under a week by a two man team. They billed at roughly 3000(1500 per person) an hour… or at least that’s what I remember reading the one guy said he was charging (found him in a forum somewhere). Or why smaller but talented agencies are getting millions on high production micro-sites. Is it a higher hourly, or are they still somehow getting royalties on site views or usage on logos and such?
Chris, every single deal is like snowflake; they are all different! It depends on the amount of work involved, the size of the company, the scope of the work, the going rate, and what you are willing to take and what they are willing to pay. Sorry I don’t have a better formula for you! With experience, though, you will develop a price sheet that works for you.
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Nowhere can I find how much of my ‘royalties’ should I pay my licensing ‘agent’? Help! ms
Maria, thanks for the question. Typically you will pay an Art Licensing Agent between 25% and 50%. The agents that are representing you at events, shows, and in ads will get 50% typically, to cover their costs. I hope this answers your question!
Hi Maria
Thanks for such a useful article! I stumbled across your site and it has certainly answered a few of my questions. I wondered if I could get your advice? I’ve recently been approached by a manufacturers to have my artwork reproduced onto glasses. What a great email to get! But here’s where it gets complicated: the artwork I created was for personal work, as it’s based on fictitious characters from a film. The manufacturers are keen to use the work, but I’ve already pointed out a license would be needed, and this means approaching the studio in order to be granted one. It’s a long shot, but at least it’s going by the book. The manufacturers have also suggested they would apply for the license on my behalf, along with new artwork that I would create. What are your thoughts on this? I’m quite new to all of this and it would be great to get back to them with an intelligent answer.
Kate, thanks for finding me here, and for your question.
Your art was for “personal work” – does this mean that you signed a legal agreement to transfer your rights to the person who purchased it? If so, then you cannot license it, as you no longer own it.
But, if you did not sign a legal agreement to transfer the rights, then you don’t need anyone’s permission (unless you signed something saying you wouldn’t license….).
I can help you with this, but it will be at least an hour of consulting to work through the details. Check out my consulting page here: https://mariabrophy.com/consulting
Thank you so much for sharing your wealth of royalty information. Quite helpful. I was wondering if you knew the going rate/royalty on copyrighted artwork used by a winery/brewery for their labels. I’ve been approached by several and am puting them off until I figure out how to make money on this.
Kim, thanks for the comment and question. The going rate is whatever you and the client decide. I know, that’s not the answer you were looking for! But, there are some guidelines. First, you need to know how long they will use it, how much work will be involved up front on your end, and other details. You probably should charge just a flat rate, as a wine co. most likely isn’t set up for royalties. Whatever you do, DO NOT let this opportunity pass you by! If you want my help with putting together a proposal, set up a consulting call with me. Check out my Consulting page to get instructions on how. Thanks!
I have been working alone for many years but would like to learn more about licensing agents
Why people still make use of to read news papers when in this technological world
all is available on web?
I have a question. I do t shirts and I use a popular POD service due to my budget. They were contacted by a popular TV show, which in turn contacted me about using one of my t shirt designs as set dressing. They have emailed a release form which basically gives them carte blanche to do what ever they want to do with the design. There is no mention of compensation in the email or on the form. The design is not really related to the theme of the show, but will be worn by one of the characters. Should I sign away any rights to the design or should I ask for compensation? Any insight will be truly appreciated.
G3
Gus, Typically a release form for a tv show will only give them rights to show your art on their show. They also usually don’t pay, unless it’s being used extensively. I recommend you allow them to use it, but make sure that the wording on the form only gives the rights to show it, not to reproduce it or use it commercially.
Hello Maria,
How nice and helpful post!I have a doubt about a licensing agremeent. They wrote to me about paying my royalties in the amount of 10 % of the retail net revenues, and 5% of the wholesale net revenues. I have signed with others brands and they din´t use this “net revenue” term. It is the first time I have heard about it. As I am Spanish it is difficult for me to understand this. I would like to know if this a good legal term for me. Thanks a lot. julia
Julia, often licensing agreements refer to “net revenues” and it’s defined in the contract. Look in the contract to see how “Retail Net Revnues” and “Wholesale Net Revenues” are defined. If there are no definitions, then ask for that to be included so you completely understand what you are agreeing to. As far as having 2 different royalty rates – it’s not uncommon. The royalty rates they are offering you seem reasonable to me.
Maria, lots of thanks for your helpful reply. I am confused yet about understanding it properly. I understood that my royalties are not 10% on the product price on sale, and there are some expenses which will be discount from my royalies. Am I right?They defined both terms. The thing is I want to have the 10% on the price as I have with my other licencee brands. Sorry, difficult for me undertand all these legal terms.
Julia, to answer your 2nd question below: the definition of “Net Sales” or “Net Proceeds” or “Net Revenues” should NEVER include deductions for expenses. It’s okay to include deductions for “returns, damaged goods” etc., but never expenses. If you want me to review the contract and help you with it, please refer to my consulting page and set up a call with me: http://www.MariaBrophy.com/Consulting
Thanks for an excellent article. I have a lot to learn about merchandising & marketing my images. This was very helpful to me.
I have an inquiry by a company that would like to use one of my art images for their Home page on their website. What would you suggest regarding a fee and contract?
Elaine, the price depends on a lot of different factors: the scope of the work involved on your end, how prominent it will be displayed, and what it’s worth to both you and the client. Basically, come up with a dollar amount that will make you both happy. (I’ve seen pricing range from $500 to $10,000 for art for a website page.)
The contract could be a short agreement – make sure it specifies how long they can use it (i.e. 2 years), HOW they can use (i.e. home page of their website, specify site), that you retain the copyrights, and that payment is made up front, at the time you transfer the art.
Thanks so much for your response. It was helpful and gives me a place to start. In addition, another artist suggested to negotiate the sale of prints/cards of the image for sale at point of purchase and for me to receive 100% of sales.
Maria,
First I have to thank you for such a informative post! Also taking your time to answer all the questions in the comments that everyone have! Not that many poster would have the patience to stay around a single post and help others out with detailed responses! Kudos on that!
My wife has recently been asked to draw 10-15 football player caricatures for a TV production company for their TV show. It’s meant to be showed with some post processing (turning the 2D drawing into 3D models and have voice over the characters) with the drawing on their end in one of the segment in that show. It doesn’t sound like it’s a huge production…certainly nothing like American Idol etc. My question is in this case how do I charge for royalties? Since they are not really selling our work but using it in commercial? Charge by % of revenue of the show would be difficult since the drawing only appears in one segment. If we go the flat rate route and give them a 2 year right to use, would that be more sensible? If so how much would you recommend charging for each drawing?
Thanks!
Ken
Dear Ken,
TV and movies work things a little differently with royalties for art. I’m not an expert in that area.
I would suggest either:
1 – Hire someone who would be an expert in that area, working with producers of TV shows or movies (not sure how to find)
or
2 – Work it out yourself. Make sure that if you get royalties, that you get a HUGE advance UP FRONT, so that your time and effort is paid for. Or, you could consider selling it to them outright. This would mean 3x the price if you were keeping the copyrights.
BEFORE giving any prices, Refer to the Artists Guild Guide to Ethical Pricing – there are specific dollar amounts in that book for many different types of illustrations. The book is about $50 and will save you years of undercharging for things! There are sample contracts in the book as well.
And congrats on this great opportunity – enjoy it! 🙂
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Hi Maria, I have someone who has they’re own clothing line for about 1 year now and he wants me to design a logo for a theme he’s having for his brand in November. My question is because its a logo, can I license it and get royalties for it or is it best to just get a flat fee for a logo? And, (considering he is selling in good volume) is it a good idea to ask for a royalty percentage say for example 5-6% just to see how it goes, or is that asking for too much too fast? Thanks for your advice.
Sherif, for logos, since it’s their brand identity, you should give them the rights to it. A company needs to have control over their logo and identity. That’s why many artists charge quite a bit more for logo work – because they are giving the rights to it away. (And can’t earn from it any further.) So, in your case, come up with a one-time fee where they get the rights, and make sure you’re getting paid enough for it to be worth your time.
I realize this is an older post but just came upon it. Maria, I believe that your answer is incomplete and as worded, not correct. It is STANDARD in the design industry to include wording in your contract that maintains ownership of your designs—including logos. That is one of the items in AIGA’s recommendations for contract writing. Now as the industry has become over-saturated with people who are willing to undercharge and compromise their own artwork’s integrity — this industry standard has become somewhat lost. Just because a company needs to use a logo as their brand is not reason to “give them the rights to it.” Just as photographers license their photos for a certain period of time and use, it is standard and reasonable to do the same for companies. Many companies only last 5-10 years, so one common clause is to license the logo to them only for a certain period of time. Another approach is to only license it for use for their company (if their company closes, the logo rights revert back to the designer for future use). And lastly, in specific response to the question posed—what I do is state I maintain ownership for any uses not discussed. If they have a new use, ESPECIALLY merchandise like a t-shirt which they could sell and make money off of, they need to come back to me to work out a new agreement. Beyond protecting your ability to make profit off of your own artwork in the future, this also helps to maintain the integrity of your artwork. If you just let go of all rights — any other designer could take your artwork and manipulate or bastardize it—and that is not in your interest. IF a company wants to purchase the logo rights outright that means they will be charged a quite substantial fee (not the measly $300 you used as an example).
Hi Maria, thanks for the suggestion, but Maria, you say make sure you get paid for my time. I assume you mean the time it took from conception of the idea to its final product. What if it took me just a couple of days and they like it. Would that mean its not worth a high price or do I charge based on the fact that they are using my artwork for their theme’s logo that they now have full rights over? Thanks so much for the advice.
What I mean is, make sure you are getting paid properly. And I say this because I know so many artists who do not charge an appropriate amount for logos. I can’t give you a number, as there are many factors that determine what a logo is worth. Some companies pay $20,000 for a logo. Some artists charge $300. It’s all over the board. My hubby, Drew, charges anywhere from $1,600 – $3,000 depending on the scope of the work. What I meant was that when you determine price, take into account that you cannot earn any more from this art once you transfer the rights.
hi Maria, I was wondering, if I sell a design for a flat fee, can I still license it, retain the rights to it and earn royalties from it, or once its sold, then its sold and do the buyers own the rights to it (i.e the logo) , therefore not earning any extra income because I sold them the design for a flat fee? Thx so much
Hi Maria, I just read the portionthat says no future royalties will be paid for flat fee so scratch that, but i assume that i still get paid an advance regardless of whether its a flat fee or licensing in any event that something goes wrong in the process, correct?
Sherif, if you are charging a flat fee, typically you are paid the entire amount up front, before you transfer the art files.
Also, yes, you can still license the images to other, non-competing companies making different products.
Once your flat-fee deal is up (i.e. in 2 or 3 years) then you can license it to another company for the same products, again.
Regardless of how you are paid (royalties vs. flat fee), you always keep the copyrights and you can continue to license the art.
Just make sure your agreement states that you retain rights to (c) and keep your term of the contract shorter rather then longer.
Hi Maria,
If you create an image for a small town retailer to use for a year. Should you include your name on the logo (art). How do you avoid being copied and reproduced?
Thanks so much.
Paulina
PS. I enjoy your postings very much! Thanks for
Hi Maria, I’m a little unfamiliar with copyrighting, but with my logo design, is it necessary to copyright it before I sell it even though the buyer will keeping all the rights to it, or is it unnecessary to copyright it because the buyer will be keeping all the rights to it? Your a real big help Maria, and this is my first actual gig that can be a good shove forward, so forgive me if I sound redundant, I just want to be as clear as I can with as much as possible so I can be comfortable knowing i didn’t sell myself short (like many artists) by making the best possible decisions…your advice and suggestions are helping me do just that so thank you.
If you are selling them the copyrights to the art, then you don’t have to copyright it.
But, why are you selling them the rights to the art? Why don’t you just license it and then you can license that same image for other uses as well?
When you transfer all the copyrights you cannot use the art for anything else, as it’s no longer yours. In that case, make sure you charge enough to make it worth it.
Are you speaking about why I would sell my rights to my LOGO DESIGN? That’s my main point of interest on whether I sell it to them and its finished, or if I sell them the design, but still retain the rights to use it elsewhere… You had previously mentioned that i SHOULD give them the rights to it because its their identity and that artists charge a bit more for logo design because they can’t earn any extra income from it? Now does that “should” mean I can sell them the logo design BUT STILL KEEP THE RIGHTS TO IT and can earn money from the design by licensing it elsewhere? If that is the case, should the contract state that I still own the rights to the design, allowing me to license the very same design to other companies?
Sherif, sorry, you’re right. I forgot that it was a LOGO design.
That’s the problem with me having 12 conversations going on several different Social Media platforms!
Yes, correct, if it’s a Logo design, the client does need rights to it.
And, in that case, you would not file the copyrights – that would be their responsibility to do so.
Again, sorry for the confusion! 🙂
No problem, thanks for your help.
Hi Maria, if the buyer wanted to also use my logo design as a “garment” or “clothing” design, can i “resell” it to him as a “garment” or “clothing” design (NOT as a logo design–that’s done) either for a flat fee or royalties? (And this, of course, is stated in the contract if that’s the case) correct? Or can he do whatever he wants to do with it so long as he has the rights to it as a logo design?
Sherif, if you are signing all rights over to the client, then it’s theirs to do what they want with it, forever and ever. They don’t have to pay you again, once they have paid for the rights to it.