Maria Brophy

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art licensing / Deal Making / Pricing

What to Charge for Art Licensing – Royalties Advances and Flat Fees

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Slay those Dragons, Fear No More!

(Artwork provided by the wonderful, fun and talented Sara Jane Franklin.  Check out her blog here!)

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 calledART 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

ALSO:  If you liked this article and want to know more about licensing, sign up for my FREE ten week series called “ART LICENSING MADE EASY” which will teach you how to license your work, negotiate contracts and know what to charge for licensing your art.  SIGN UP HERE!

 

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275 Comments What to Charge for Art Licensing – Royalties Advances and Flat Fees

  1. Scott

    Hi Maria,

    I’m curious to know how royalty enforcement is handled. I have read a few articles and through a handful of contract and none of which mention enforcement.

    Specifically, how can a person find out how many units were sold… It seems the licensee could make up any number… I.e. They say they have sold 50 units but in reality they sell 2000.

    Reply
    1. Maria Brophy

      Scott, excellent question! And I have a great answer: A good licensing agreement will include a statement that allows the Licensor (artist/you) to audit the Licensees books at any given time, with notice. A Licensor can send in an Auditor to do this for them.

      A great licensing agreement will also include language that states that if the audit reveals that the Licensee was underpaid by 5% or more, the expense of the Audit is payable by the Licensee.

      Reply
      1. JC

        Hello – Great article and advice! Regarding your reply above, would the audit also apply for international deals (such as a US artist licensing to a German company)? Would a lawyer in that country need to do the audit? Seems like that could get pricey
        Thank you!

  2. Jan

    Offered a flat fee short term to client they thought it was fair but are unsure how many they will sell so they wanted to know a per piece price to use the image, any thoughts on this

    Reply
  3. saimamacfee

    Thanks, helpful article make me happy to read this. I am photographer and well selling royalty stock to get extra coin. I love my work and happy with that.

    Reply
    1. Ed Ward

      Thanks Maria. Great article. It was the first I stumbled upon when Googling “licensing art and design.”

      I’m just now looking into licensing some design work simply to augment my freelance income and as a baby step into retirement income. Ironically the designs I’m initially thinking of are a few that I created for my own custom surfboards. I intend to contact the substrate manufacturer my shaper uses, as they appear to have a small stable of artists. Imagine my surprise when I clicked on Drew’s link! Terrific work. 🙂

      Reply
  4. Pingback: Art Licensing Info Ask Call replay is now available | Art Licensing Info

  5. Rikki

    I’m an illustrator who is re-branding a large business. They are asking for a non- competition agreement that will prevent me from working for similar businesses for two years. Is this a good idea for me? How do I decide on a compensation amount?

    Reply
    1. Maria Brophy

      Rikki,

      I would not agree to anything that would prevent me from working for 2 years, not unless they are paying you enough to take 2 years off.

      Have a conversation with them and find out what their true concern is. Are they worried you will create similar branding for a competitor? If that’s their concern, then the agreement would state that you cannot create similar branding for a competitor.

      A non-compete is typically used for highly paid employees that have insider info in an industry. It protects the company if the employee decides to quit and go work for the competition.

      Rarely is a non-compete signed by a freelancer. This is because it’s meant for employees or highly paid advisers.

      Discuss it with your contact at the company and let them know that agreeing to not provide your services for 2 years would kill your income earning ability. And that goes against your business model! 🙂

      Ask them their true concern, and address that concern as best you can.

      Good luck!

      Reply
  6. Evelyn harper

    Hi, I draw as a hobby and have been contacted by a huge craft company to supply them with drawings for an upcoming adult colouring book. They are proposing a 2 year license and have asked me to name a price per drawing, I have absolutely no idea what to ask for and no friends in the industry that I can ask………. Help !!!!

    Reply
  7. Daniel

    Hi Maria! Your blog is super informative and interesting!! Thank you for sharing. However, I have an issue that I didn’t see addressed anywhere else in this thread… I’m a painter who makes my living by selling my original work only. Surprisingly, it’s worked out great for me thus far, despite being a simple “formula.” But I was just contacted by an art consultant for a luxury hotel. My interest was piqued, so I’m considering. They asked for a quote for 4 originals and limited copy rights for producing prints for 170+ rooms. My work sells for $1500-$10k per painting. It seems to me, the most appropriate way to “bid” this would be to ask for a flat licencing fee for the print rights? Though I have no idea what to charge. A percentage of an original? Any input?

    Reply
    1. Maria Brophy

      Hi Daniel,

      Congrats on this great new opportunity! There are definitely different guidelines for dealing with hospitality art print sales.

      It’s best to handle all printing on your end, so that you can control quality and quantity. However, some designers insist on printing it themselves. I recommend you buy Liron Sisson’s book “How to get your Art into Corporate Collections” where she shares how all this works: http://bit.ly/OP40Cl – it is very helpful to get insider info and as far as I know, hers is the best resource out there on this topic.

      Selling art to consultants for hospitality industry is different from licensing. The % are much higher. Instead of 10% for paper prints (in normal licensing) you can charge up to 50%.

      If you do the printing yourself (which is recommended) then your profit is much higher.

      Hope this helps!

      Reply
      1. Daniel

        Thanks soooo much for your feedback, Maria! I got my proposal squared away, and we’ll see what happens… Regardless, this is a valuable learning experience.

    2. Dana

      I am in a similar situation now. I think I’ll ask 50% of the artists price times the number of prints they’ll make as Maria suggested. Is that what you did? Did that work out? Would love to hear how it went if you have a chance.

      Reply
  8. cait

    Hi Maria,

    I have sort of a loaded question I hope you can help me with: A design company has created an image for the cover art of one of their house books which is being sold world wide. The cover image is very similar to an image I created for a series prior to them publishing the book. My lawyer would like to know what to ask for in compensation if we were to go forward with a copyright lawsuit. I told him that the artist, who is most likely received a flat rate or royalties for this high-end book but that I have no way of knowing what sort of deal the artist would have received as a basis for what I should request. This is a large fashion design house that created the coffee table book with an artist who is represented by the image agency that produced the book.
    Do you have any ideas of what the artist might have received as payment for this project and/or what I might think of suggesting as compensation for the use of my work –both for the past year and any future sales? Thank you!

    Reply
  9. Lala

    Do you have any advice about usage of one image in a book? Also, the piece that is featured is my work, but the photo was taken by someone other than myself. Should there be a usage fee for book print? Should the artist receive the fee or the photographer (if no agreement had been decided beforehand?)?

    Reply
    1. Maria

      The answer depends on who owns the copyrights to the photo. Is the photo a creative photo that includes the artwork? If so, then the artist and photographer share in the royalties.

      If the photo is just of the artwork, then most likely you should get the royalties. (If you hired a photographer to “scan” it for you).

      The price to charge depends on how often the photo is used, if it is a full page or partial, and is it an inside cover or page?

      Each is priced differently. The Graphic Artist’s Guild guidebook of ethical pricing covers the pricing for these things. I recommend every artist have a copy of that book.

      Reply
      1. Lala

        Maria, thanks for such a speedy and helpful reply. I’ve really enjoyed coming across your blog with my question and have been directing my pals to check it out because we are so used to selling ourselves short and your tips are so helpful and encouraging to deal with our everyday issues. I will definitely check out the guidebook!

        It turns out that the image will be used on the cover of the book and 1/4 page inside – million copies, worldwide use, all languages etc. I wouldn’t have asked the right questions had I not found you! Looking forward to your newsletters.

  10. Adrienne

    clicked on:
    LICENSING AGREEMENT/CONTRACT TEMPLATE PACKAGE
    and got an error code. Really? After all the trust you built in the article. Big disappointment and loss of trust. I gave you my name an email address and regret it. I’ll unsubcsribe asap.

    Reply
    1. Maria

      Hi Adrienne,

      Thank you so much for bringing this broken link to my attention. I just fixed it.

      And I’m sorry that the broken link caused you such distress! And yes, I understand if you unsubscribe, as I occasionally make mistakes and wouldn’t want to cause you harm again. I wish you the best!

      Reply
    2. CJ

      That’s a bit harsh, Adrienne. Mistakes occur and technology fails us sometimes. Alerting the author of a broken link is the kind thing to do, but losing trust, being so disappointed and having regrets about subscribing seems like an over-reaction, IMHO.

      Reply
  11. Abner Bonet

    Hi Maria. I’ve read many articles regarding rhis topic and by far yours is the clearest and most helpful. Hope you can help me on this. I’ve just been contacted by a company who wants an exclusive licensing agreement for a certain quantity of my drawings as a package deal. They intend to 3d copy them and sell on mass market under their buisiness concept idea. Since this is new to me, I am totally lost on what royalty rate is fair for 3d printing based on my art or what to compare it to and for how long my contract should be. They suggested 5 years. Any input from your great expertise would bring light to me and I would truly be grateful.

    Reply
  12. Margaret

    It can be so difficult finding a reputable Internet Marketing
    freelancer at the moment, just going to do it ourselves I
    think
    Posted this on Twitter, very useful!

    Reply
  13. Julia Veenstra

    Hello! I have been asked to allow a financial consulting company to use a couple of my painting images on their website. I imagine for a while. I have no idea what to charge them. Can you help me? 🙂

    Reply
  14. Gill Tomlinson

    Hello Maria – A company wants to use one of my images in their logo. The small original collage painting is still available for sale at £95 GBP. I have no idea what to quote them for this logo use or how to handle it. Do I sell them the original and ask for an amount on top? Do I sell them a digital hi res copy and keep the original? If so – how much to charge? (Im not a designer so they would need to find their own graphic designer) Its a picture of a Greek fishing boat and they are starting a Greek Seafood company…Thanks So Much for any help you can give me.?

    Reply
  15. SL

    Hello Maria,
    I am an artist with a new, successful hand-painted wallpaper business. I have one very unique design that a very high end boutique clothing atelier approached me about liscening for some clothing pieces. I am doing the sample work, and then moving forward, their fabric peeps will do the work. What is an appropriate percentage? They have started the conversation with 3% going down to 1% for higher volume. I’ve not done this relationship before, but I have been a successful commercial artist for many many years and my first thought is this is way too low. What do you think? Thank you!

    Reply
    1. maria Brophy

      Hi SL – 3% is the absolute low end for high volume sales. 5% is closer to the norm. I would ask for an $$$ advance payable up front – if they are not willing to come up on % and pay an advance, there is no incentive for you to do it. Not unless it’s a charity….

      Reply
  16. Emmanuel Tomi

    Hi Maria ,
    if a singer / well known singer in the middle east want to make a commercial on TV for a telephone company , what sort of fees should be asking for ? should we ask for advance up front then monthly payment for the duration of the forecasting of the commercial ??

    Reply
    1. Maria Brophy

      Emmanuel, there are standards for licensing music for commercials. The artist should keep rights and ownership to their music and license it to the telephone company. Licensing fees for music for these types of deals typically start at $15,000 (a one-time fee payable to the artist) and often are much more – and that is for a limited use of the music, usually limited to a number of months or number of times the commercial airs.

      Reply
  17. Beth

    Hi Maria,

    This is such a great article! Thank you! I have read a number of resources on this topic and only now do I fully understand it!
    Of course I have a question that is a different scenarios. I have a client that wants me to make them an original commissioned art piece then, they want to make print reproscitions to give to their customers (they lease office space and would give a framed reproduction as a welcome gift.) So they won’t profit off of it, but they will be reproducing my image. Should I charge something for that? A minimal flat fee, maybe?, with an agreement they don’t sell the reproductions for profit without a new agreement? I’d love your thoughts on this! I don’t want to overcharge, but I also want them to respect that they are always buying the license from me and that I own the copyright.

    Reply
    1. Maria Brophy

      Hi Beth, thanks!

      The way I would handle any client with a commissioned art piece – I would sell them the original painting and then have it professionally shot and then offer to sell them prints of it. Handle all of the printing yourself.

      You don’t want to hand over your high res images or allow your clients to make prints of it, for many reasons:

      1 – You will be able to control the quality of the prints (important for any fine artist to do)

      2 – You will be able to earn more off the sale – when you have the prints made, you will then bump up the price and earn more per piece

      3 – You will be able to sign each print, which should be important to your client. It’s more valuable with the artist signature (and even if you don’t sign the front, you can sign the back).

      4 – You own the copyrights, so you can make many prints as needed and sell them elsewhere, off your website, etc.

      So, moving forward with this client and any other client that requests a commissioned painting and prints:

      Tell them that yes, you offer art prints of your work. Give them a price per print, and size options, and let them know that you will have the prints made and delivered. Tell them you’ll be happy to sign the prints for them.

      They can order one at a time, as needed, or a bunch at once for a discount (get a discount from your printer for a high volume order, and pass some of that onto the client).

      Hope this helps!

      Reply
  18. Lesley Birch

    I’m working for a well known cancer charity producing artwork. They want 3 paintings and they want to make 100 copies of each painting. I really don’t know what to charge here. They are willing to pay for the licensing, but because it’s a charity, I was thinking of a flat fee for this. They will be paying me for each original painting. Any help/advice really really appreciated. This is my first project of this sort.

    Reply
    1. Maria Brophy

      Hi Lesley,

      One way to do it: Handle the printing of it yourself and charge a per-piece fee. (This gives you control over what happens with your art files.)

      Charge them a fee for creating the original artwork, which will cover their cost of the originals (whatever your fees are, you could offer a 25% discount, which can be considered your “donation”).

      Then charge them per poster – and handle the printing of the posters yourself, as that way you are able to control the quality and you will have the scans in your possession.

      Make sure your fees include the cost to have the paintings scanned professionally (this can add up – we pay $100 per piece to get our large paintings scanned).

      Source the cost of printing, and then add to the cost to ensure that covers all of your expenses are covered plus you earn a profit.

      I can’t give you specific numbers here, without knowing who the charity is, what your work sells for, and other details that are considered when coming up with a price.

      Hope this helps!

      Reply
  19. Nicole

    Very informative article! I have a new client that wants me to create cover art for his ‘inspirational self help journal’ book and layout all 90 pages. It’s in the beginning stages but he’s going through a publisher, and it will be sold for about $10 per book. Unsure of how many copies will be printed in the first run, but I’m not sure how to price my work. Should I do a flat fee, or a percentage per book sold? Should I do a flat fee for the page layout and percentage on just the cover art? If so, what’s a reasonable percentage price? Help please, any information would be Awesome!! 🙂

    Reply
    1. Maria

      Hi Nicole,

      I just hired someone to do something very similar for me. I’m paying him $1,000; $500 up front and $500 when it’s finished. Typically, this type of work is a flat fee project, not a royalty %.

      Hope this helps, let me know!

      Reply
  20. Emeka Dike

    Hi Maria, I wrote and published a fiction work based on a modern African Country covering economics, contemporary politics, and espionage as well as a coup d’etat which a group representing a European country want to turn into an animation film. I would like to charge them a licensing fee for a given period for them using the story and characters in my book as well as a % of gross income from the animation itself. Is this structure possible? Secondly the book is 380 pages long. I self published it and it is on sale on Amazon I have no idea what to charge them. I have created a cartoon series based on the book already which is currently running in a national newspaper in Africa although I have not started selling it commercially as we are still creating the comics. I have no idea what to charge for the licensing fee for the animation. The animation will probably be distributed world wide both in English and French. How do I charge them? I know this is not the typical scenario that you deal with but I need help on how to price. I have no idea how much money they could make from the animation. I need a quick feedback as I am meeting with them in a few days PLEASE HELP!

    Reply
    1. Maria

      HI Emeka,

      Congratulations on this project! Sounds amazing.

      When it comes to animation and films, you really need to hire an attorney who specializes in that industry. The fees, royalties and contracts are very different from regular licensing. Also be VERY CAREFUL to NEVER sign one of these agreements without the help of an attorney. It is the trickiest industry ever – they put language into their contracts which ensure you are never paid, if you aren’t careful. Be careful!

      Reply
  21. Kenneth Hershenson

    Excellent article! I’ve been searching high and low for assistance on coming up with a value for my paintings if selling the digital rights. My situation is a bit different than what you describe here, although what you describe here may also occur for me so thanks for that part.
    I have never been in this position before but a business that is owned by a pretty famous billionaire who owns a pretty famous company among many companies is interested in purchasing the digital rights to a handful of my paintings. They want to use my images for wall coverings in 6 of their entertainment businesses in the Midwest and East Coast. They are talking, so far, about enlarging them and using them for murals and for elevator doors. My images link directly to the name of their business. How on earth can I come up with a value when, in this case, there are no royalties because there are no product sales. If they like how these are accepted by the public there may yet be merchandise using the same images. So how does one come up with a value????

    Reply
    1. Maria

      Kenneth,

      I wouldn’t sell them the digital rights. Then you lose rights to your art. Instead, sell them a limited license to use the art for the specific project at hand.

      Pricing for these types of projects is different then regular licensing – typically you would charge approximately 40% of the retail value of the art pieces.

      If you want specific help from me, please set up a consultation – go to my “work” page and follow the instructions.

      Or, if you want a cheaper solution, click the link on the the right hand side of my page that leads to the ebook “getting your art into corporate collections” – which will give you details on how that type of business works.

      Reply
  22. Padraig McCaul

    Hi Maria,
    I have a licensing opportunity coming my way and I would apppreciate some help with how to price it.

    A TV production company want to use some of my paintings in their set design for the house of one their leading characters. It is an Irish/Canadian production, so I assume it will be aired in Canada as well as Ireland. They will be filming for 3 to 4 weeks.

    The paintings would sell for about $3000 each. Is there an industry standard for this type of arrangement? Or what would you suggest would be be a fair price to ask for?

    thanks!

    Reply
    1. Maria Brophy

      Hi Padraig, typically for a TV show, you would
      “rent” your art for the set. The industry standard varies depending on location (city/state/country), but in general, you could follow one standard, which is to charge a rental fee of 10% of the retail value of the artwork (in this case $300 per painting), and for each additional week charge 5% of the retail value ($150 per painting).

      However, if they are renting less than 20 pieces, I would come up with a minimum fee. For example, if they are only renting 5 paintings for 4 weeks, maybe offer a one time fee of between $3,000 – $4,000 plus transport and insurance (they should make sure the art is insured).

      This is just one of many ways you can do it. Play around with the math and see what feels right to you!

      Reply
      1. Maria Brophy

        Sorry, correction to my typo:

        10% would be $300 per painting! ($3,000 x 10% = $300).

        Sorry about that, corrected my comment to reflect the correct math, now carry on! 🙂

  23. Garrett McCarthy

    Hi Maria,
    A local tourist spot (privately owned island with a castle on it) wishes to commission me to do a painting of their facility ( Arial view shot from above highlighting the entire island and buildings). I foolishly low-balled it at $2,400 when they pressed for a ballpark figure as compared to another painting I had hanging in a shop. It should have been at least twice that….. But, that being said, they also want to discuss fee for making prints. Would you do a percentage / royalty fee or lump sum for reproduction rights and how much roughly would you advise? The canvas would be 36 x 48 – and they have resources / international investors of this island and now two more.
    Regards,
    Garrett McCarthy

    Reply
    1. Maria

      Hi Garrett,

      Congrats on this opportunity! It sounds great. You could come up with one of two options for them for art prints:

      1 – You do all the printing and sell to them at fair market value. If the prints will be retailed in their gift store, sell to them at wholesale pricing plus shipping. If the prints are being installed in rooms in the castle, sell to them for the price you would sell to an art consultant, which typically would be about 60% of the retail price. For a 36″x48″ retail pricing would range from $900 – $1,500 depending on how it’s printed (paper vs. canvas, etc.). Plus shipping.

      2 – you could license the image to them and charge per piece. The price depends on how many they plan to print.

      Also, before you paint anything, make sure you get a written permission from the photographer that you can paint his photo. This is important so that you don’t get sued later.

      And, lastly, it’s not too late to raise your price. Let your client know that while your existing paintings are priced at $2,400 at that size, a commissioned painting is more work and complex, and your price for that would be $3,500. (as an example).

      Hope this helps!

      Reply
  24. Pingback: Bidding for a Kickstarter Job | Illustrations & Article | Portfolio and Blog of William Thorup

  25. Andrea Scafasci

    Hi Maria,

    Your article was extremely helpful and one of the most informative ones I’ve read! I too have a question on how much to charge. Years ago I was commissioned to create a design that would be printed on shirts and sold online. It was a small company at the time but regardless, I definitely made the mistake of undercharging.
    Recently, the same company reached out and wants me to do another design and I’d like to be smarter about pricing this time around. I’d like to charge a royalty with an advance upfront but I’m unsure how much to charge as the initial flat fee? Is it considered unprofessional to ask how much product they are selling in order to determine a royalty percentage? They are still selling my previous t-shirt design online and now apparently in small shops. Is it possible to tie the old and new designs into one contract so that they can only use them both for a year? Can I ask to start receiving royalties for the old design too or has that shipped sailed?

    Any advice would be sincerely appreciated. Thank you!

    Reply
    1. Maria Brophy

      Andrea,

      Great questions! It is professional to always ask what they are planning to print the art on, how many units they intend to sell and what the wholesale and retail prices will be.

      If they plan on only printing and selling 200 units of a product that retails for less than $100, for example, then there is little room for royalties in there and I would charge a flat fee for a short period of time for specific usage on a specific product.

      However, if they plan on selling 200,000 units of the product, then there is great earning potential with royalties, and I would ask for an advance and a royalty.

      To answer your last question – can you tie in the previous design with the new one in an agreement – it depends on what your original agreement was. There are so many what if’s that I can’t give you an answer without more details, sorry!

      If you want to set up a quickie consulting call with me (go to my “work” page on this site) we could come up with a specific plan as to what you should charge.

      🙂

      Reply
  26. Yare

    Hi Maria!

    Just had a quick question on what type of license I should give my client. I am a freelance graphic designer and was asked to create a Wedding Welcome Packet for a local photographer. Now that my Job is done I am sending her an invoice along with some sort of agreement electronically for both of us to sign. Since I am not printing for her (she was very untimely and at this point just doing an agreement instead of a general contract), I am charging her one full payment upon release of my designs. I would like to implement in the agreement that she can use for her business (market and advertise wither social media or locally), however i would like to as well use it to advertise my business also. what if she allowed me to use her photos to create her welcome packets, how will that dictate the agreement?

    Btw i bookmarked and saved your blog as this was very helpful to read.

    Thank You again for your time!

    Reply
    1. Maria Brophy

      Hi Yare,

      Thanks for the question. I think what you are asking is, how does it change your deal with your client if you get her permission to use the graphic design work in your portfolio? Is that right?

      If so, what I would do is include in the agreement the statement “Artist retains rights to display Artwork in portfolio (digital, online or print) and case studies.”

      This should be in all your agreements so that you are free to show the work you did, to other clients. This shouldn’t change your pricing at all whatsoever.

      Hope this helps!

      Reply
      1. Yare

        Thank you so much for your speedy response! I just sent my client the agreement letter and I believe I said I as well can use the work for my business for promotional use to build my business, would that be the same as what you mentioned? I also did say if for any reason if either party would like to use the work in another way that either party would have to give/get permission to do so before using. Is that good enough for me to say?

        Again Thank you SOOO much, you have no idea how this has helped me.

  27. Sue

    Hi Maria,
    Glad to come across your website, it is very informative.
    I wondered please if could you tell me if I should license a painting to be used on an event poster.
    I am uncertain at the moment if they have a budget for this and if they are willing to pay.
    I know just having my work featured will give me great exposure, I certainly intend to ask for my name to be credited on the poster next to my image, but also wonder if I should put to them some kind of limited license just for that particular use and charge them.
    Thanks in advance. Sue

    Reply
    1. Maria Brophy

      Hi Sue, so sorry I took this long to respond to this question.

      My answer to this is:

      If the event is a profit venture (i.e. concert, trade show, festival, etc.) – then there is a budget for artwork and I would charge a fair market value fee to use the art. I would charge less for existing art and of course much more to create something custom. The amount to charge depends on how large the event is (their budget will be larger or small according to the size) and if they plan to use the art just for posters or if they plan to use it for products as well. Pricing for existing art can range from a one time fee of $500 (for small venues) to $1,200 to even $6,000 for very large trade shows. If they are selling large quantities of products with the art, I would add a royalty as well.
      For custom illustrations, of course the price would be more and would depend on how much work is involved.

      If the event is a charity event, or an event that is not for profit, sometimes I’ll allow use of an existing piece of art at no charge, and require that the artist’s name is clearly shown on the poster and that we get something in exchange at no charge (such as a booth at the event, or mention in their newsletter with a link to our website, etc.)

      Hope this helps!

      Reply
  28. Stephanie

    Hi Maria,
    Your website and advice is such a godsend to artists! Like everyone else here I too have a question. I’m in the talks with an international company to license my artwork for an embroidery kit. We’ve been negotiating back and forth and but I’m still feeling uncertain about whether it’s a deal to move forward with. They are only wanting to offer royalties in the US at 7% against a $100 up front fee. They haven’t given any indication of the number of potential sales or past US sales. I feel like I don’t have all of the info to make an informed decision on whether it’s a good deal or if I’m overthinking the whole process. Any advice would be so helpful!

    Reply
    1. Maria Brophy

      Hi Stephanie, thanks for the question!

      It’s hard for some companies to estimate what sales will be. A 7% royalty is good. A $100 advance is low, but could be acceptable, depending on the other details. How many images are they requesting? Do they want an exclusive or is it non exclusive? Will they send you samples so you can view the quality? Where do they sell – in what stores? These are questions to ask. Then make a decision. Don’t be so afraid to move ahead if there is little risk to you. Little risk would be: a non-exclusive, you are providing existing work and it’s a short term. Hope this helps!

      Reply
  29. Zainab Kattan

    Hi Maria,
    A company is contacting me to produce my graduation project(product designer) which is a lamp in different varieties(standing, hanging and table lamp). My design is a prize winner and was greatly appreciated by the public during the graduation exhibition. The company is new in the market but the CEO is a very successful business man and has a lot of experience in this area.
    I really have a problem choosing between a limited-time license with fixed payment and royalty. I have no clue how much should the fixed be or the royalty. It’s a high end product with honest materials such as copper and silver, but they will produce it in China in aluminum instead of copper and silver. Again, very confusing for a first timer. Can you please suggest a number or percentage?
    THANK YOU!

    Reply
    1. Maria Brophy

      Hi Zainab, Since the company is new in this market, most likely the sales will be slow to start. I would offer a 2 year term with a flat fee up front. The flat fee depends on so many factors – read this post for guidance on that. If it’s just one lamp design, I would charge between $2,500 – $5,000 up front for the first 2 years. At the end of 2 years, if they are selling well, then you can renew with a royalty if you think the sales will be strong. Hope this helps!

      Reply
      1. Zainab Kattan

        Thank you Maria, this is very helpfull! It’s actually one design concept but it’s a serie of 5 lamps of different sizes. So you think I should charge for the -one-concept or the five variation?

  30. Maria Brophy

    Zainab, the answer depends on what their projections are, where they are selling it, how many they plan to make in their first run, etc. If you want to go over the details with me on this, I can help you figure it out during a consultation. There’s a lot to dig into for me to give you exact numbers through a comment on a blog post. To set up a consultation, please go to my “Work with me” page for instructions. Thanks!

    Reply
  31. Travis

    I was wondering how you suggest approaching an apparel company to try to strike up a license deal? Thanks in advance!

    Reply
  32. Michael Sheets

    Hi Maria,

    Great article as well as advice from previous questions.

    I am a letterpress printer and want to work with a artist who I know, but not close friends with, who does amazing lettering work.

    I’m trying to come up with beneficial option since we are both artists and want long term relationship.

    What would you structure – their lettering but printed and distributed to my retailers by me. So I would absorb the expense of supplies, time printing, and selling.

    Flat fee seems fair, but could be costly up front for a complete greeting card line. Royalty seems fair as well on my gross sales paid on a quarterly basis, but I want to make sure I profit as well as makes it worth their while designing.

    Any insight would be greatly appreciated!

    Reply
  33. Michelle Mudrie

    Hi Maria!
    Thank you for a great amt of info. I have a question or two. I created a pattern and a company started using it wothout my permission. They wrapped their company vehicles in my pattern as well as used it inside shapes that they print on decals and shirts. I plan on comfronting them politely offering that they pay a advance and i license it to them for a yr with royalties however i feel like if they already stole it how am i to really know if they will pay me the correct royalty without falsifying documents. Im a little lost of what i should ask for in royalties and advance and at the same time Id rather them seize the usuage of my drsign since they stole it.

    Reply
    1. Maria Brophy

      Michelle, I’m sorry this happened. It’s a bummer – I have to deal with this often, too.

      You need to immediately send a cease & desist letter to them, with the option to license.

      Don’t confront politely, do it powerfully and professionally. Do it with first sending a C&D letter by certified mail, then follow up with a call and offer to work it out. It’s then their choice to either stop all sales and be possibly sued, or to work with you.

      If you want help with this step by step, set up a consulting session with me and I’ll guide you through it. I have a sample letter you can use as well. Go to my “work” page on this site and set up a one hour consult and then email me at consulting@ mariabrophy . com

      Reply
  34. Theo

    Hi, I just read your blog and it was really helpful. I’ve been contacted by a big hotel in Vegas and they want to reproduce my work in all of their 1200 rooms. They are asking me for a royalty fees. I’m already selling my own prints and have a huge success but i have no clue on how much I should charge. I normally sell my signed and numbered prints who are 3x smaller in size and 6x smaller in edition size for around 400$/600$.
    But now I really don’t know how much I could charge.They gonna print the image. Is there an average percentage that artist normally use? Any help would be much appreciated.

    Reply
    1. Maria

      Hi Theo congrats on the opportunity! Yes, there are standards for this type of deal – and pricing depends on who is doing the printing and on what material and how many of each, etc. On average you would charge about 30-40% of the retail price if they do the printing (and the client then bumps up their price on the hotel to the retail price). Be sure to have a written agreement in place as to how many prints they are producing and make sure you get a % up front. Sign up for a “work with me” session if you want more assistance, thanks!

      Reply
      1. Theo

        Hi Maria, thank you sooo much for your response. It helps me a lot. For sure I will sign for a work with me session. Best regards, Theo

  35. kris grimsley

    This is the most helpful site. Maria, I don’t know if you know how much your willingness to answer all of these questions, and the input of all of the others, is appreciated. I am an artist who is learning all of the business ins and outs now that my artwork is selling, so I just want to say thank you!!!!

    Reply
  36. Richard Ward

    Hi Maria, Your blog has been helpful and insightful. I’m currently drawing up 3 proposals for selling T-shirts and Posters, to present to a prestigious German automotive company which I will be taking in person this spring. As a Graphic Designer/Illustrator, I’ve been struggling as to what to ask for in terms for the design(s), a one off payment, plus a percentage/royalties. Also how long is it typical to ask for a contract in such negotiations . This is new for me and it will be my first time in negotiating a contract, and of course the royalties approach may not be a course taken, as I am also proposing to a) work abroad for them b) stay in US and telework for them c) sell my work and get a percentage d) work in the US and be officially sanctioned by them. I hope I am not asking too much, I’ve already approached SCORE Small Business counsellors, and this has helped, but would like to go back and tailor each approach and know where I stand when I visit the company. Regards, Richard.

    Reply
    1. Maria Brophy

      HI Richard,

      Congrats on your new opportunity. It sounds like there are a lot of moving parts to this deal.

      Royalties are paid when a company is selling in high volume through retail stores. Will they be selling to retailers? If not, then a one-time flat fee per design is the way to quote it.

      Quote out each item separately, because one or all may or may not happen. These complicated deals tend to change a lot as time goes on.

      Make sure that in your deal they have to purchase your plane tickets and pay for all travel. Most large companies have healthy travel budgets and it will be no big deal for them to do that.

      When should you draw up a contract? As soon as you come to an agreement on everything.

      If you want help with this, I recommend setting up a consulting call with me. I can help, and most likely, can help you get more money as this type of deal is my specialty!

      Reply
  37. Micah

    Hi Maria,
    Thanks for this article. Your site is very helpful and informative and I’m glad I ran across it. My situation is slightly different from the scenarios that have been presented here so far. I was just approached by someone who has asked to purchase files of my work (3-4 pieces) to print on a large scale on a certain type of surface with a printer that they have already worked with. It is for private use in their home. I normally have my paintings reproduced myself and sell prints on paper or canvas, signed and numbered. I would consider working directly with their printer, as I don’t want to give them my files for a one time use. I am unsure how to charge for this, obviously I would prefer to have them printed myself (where I would normally triple the cost of printing), but I have shown my work in their business, so I guess we have somewhat of a relationship. So my question is: how do I charge for one time private use of my images?

    Reply
    1. Maria Brophy

      Hi Micah, great question! As a fine artist, who signs and numbers prints, it is your duty (to yourself and your other collectors) to maintain your process, quality control and pricing. Tell your client that your business model is to do all the printing yourself, which allows control over quality, and enables you to sign and keep track of the numbers (which is really a legal obligation you have to your buyers). Tell them you are happy to sell the prints in the sizes they want, but, you will be in charge of the printing. And of course, the prices are the prices. If you want to be generous because they’ve bought a lot of art from you in the past, then offer a 10% or 20% collector discount off the prices. DO NOT allow other people to change the way you run your business. I agree that you should never send your high res images to anyone, not unless they are a licensee or a business partner. (A customer asking to do their own printing is like walking into Nordstom and asking for the pattern to your favorite suit, so you can hire someone to make it cheaper then they do!) Instead, print it yourself. Offering a discount is a nice thing to do and it should make them happy. If you explain your business model to them, they are sure to respect it. I hope this helps!

      Reply
  38. Haley

    Hi Maria! Your site is incredibly helpful, thank you for providing this resource. Do you know what general prices are for selling surface patterns? I am proposing an illustrated pattern for a client of mine that would hopefully be used on handbags and apparel. I’ve worked with them before on a T-shirt design with a royalty payment structure, but they are slow to pay and not very good at keeping their books. They are also a very small company without a lot of sales volume. If I work with them again, I’d rather just have them buy the art outright. What would be a good price to quote for designing & painting a repeatable pattern? $500? $750? Thanks for any insight!!

    Reply
  39. Paul deRuyter

    Great resource…thank you. I’ve produced a 90 minute documentary film that was shown at a small film festival. Now a large film production company has reached out requesting a licensing arrangement to use a very small portion of my film in their documentary. Their documentary is being produced for a large well know distribution company. Any ideas on royalty/licensing approaches.

    Reply
  40. Wyatt

    Hey Maria,
    Truly an enlightening article. I was commissioned to do a beer label for a small but successful brewery. They are growing fast, and intend on having this beer distributed up and down the west coast, and expanding further in the years to come. I have no idea what a reasonable deal would be, but feel like a royalty percentage is the most fair. Any input would be much appreciated!

    Reply
  41. jane

    Hi Maria,
    This is a super interesting article, thank you for sharing your expertise. Wondering if you could advise me, a company has approached me to ask if they could licence one of my designs for inclusion in a their subscription boxes. I have no idea what to charge! Their boxes cost circa $70 but contain a number of objects so I don’t no precisely how much my design will be ‘retailed’ at. Any advise gratefully received.

    Reply
    1. Maria

      Hi Jane, there are so many variables to this that I can’t give you an answer based off of the info you shared.

      Re-read my article and follow the pricing strategy. If you want individual help with this, please go to my “work with me” page and set up a “buy me lunch” session or a 20 minute session – we can figure out the right pricing with either session.

      Reply
  42. Ash

    I’ll be doing high quality hard enamel lapel pins. I will do most designs myself but want to purchase a few pre-existing designs from artists with a similar style to me. I’m happy to do royalty up front but it’s hard to know how much, since inventory of any particular design is unpredictable (will I sell 50 of these in a year or 500 in a quarter, right?) These artists sell a lot of merch themselves and I doubt would be interested in flat fee because they could market it themselves. Id rather elevate both of us by using my pin brand than compete. Is royalty the most reasonable way to pay for something like this? Also if pins have about a 40% profit margin and sold in quantities less than 1k per design, whats a fair royalty range? (Both questions are short of negotiating with each artist individually, obviously.)

    I might take a round of consultation if my kickstarter does well. Thanks in advance.

    Reply
    1. Maria

      Hi Ash, thanks for the question. A royalty arrangement will benefit you, but not the artist. Since you’re a start-up, most likely the artist will not get paid enough, not unless you end up selling hundreds of thousands of units. However, if you do get artists to agree to a royalty (rather then payment up front), an 8% or 10% royalty is fair, based on the info you shared.

      Reply
  43. Pingback: How Does Album Art Licensing Work? - LawTrades Blog

  44. David Hemmings

    Hi Maria, I am a professional nature photographer in B.C. Canada. A well known fiction writer has contacted me and asked how much I want for an exclusive use of an image of mine for the cover of his novel. He wants an exclusive for a fiction novel. Since the only experience I have is selling prints I am unsure what to charge. I should mention that the image will be sketched by an artist. Any input is much appreciated.

    David

    Reply
    1. Maria Brophy

      Hi David, thanks for the question. With regards to the price, there are standards for licensing fees for mass marketed book covers and I’m not sure what that is off the top of my head without doing some research. But, I can say this, make sure your exclusive is for the image only, not your entire portfolio.

      Reply
  45. Trina Dopp

    Hi Maria. This article was so informative! I am trying to help my daughter with her first Children’s Book Illustration project (though she has done other paid work for spot illustrations). The contract is offering a 5% of net receipts for sales of the book and an advance of $750 to illustrate “32 pages of original illustrations + cover/back cover.” The royalty seems about right (though not really sure) but that advance seems extremely inadequate! We are researching this heavily, trying to figure out how to price an advance. Any suggestions are would be greatly appreciated. Thanks in Advance! Trina

    Reply
  46. lindsay horsley

    Hi Maria
    my daughter is nearly 18 and has recently been asked to provide some grafic artwork for a record label in US. she was paid $50 but originally asked for £50. They used the ex use of they made an error and would she except $50 … after exchange rates she ended up with £38 . now her work is beautiful and we have it copyrighted. there has been no instruction or contract made or royalties discussed.
    this company Deception records have asked for a second peice which has been provided with watermark. but this time she has been told they are setting up a package and they are prepared to pay 30 to 40 dollars per album cover which is less then the 50 pound my daughter had asked for.
    I’m worried she will go ahead but also this needs to be done proffesionally .
    what steps do we need to do to protect her work and not be subject to being used ??
    lindsay

    Reply
    1. Maria

      Hi Lindsay,

      You are a great mom to help your daughter like this. Now use this as a teachable experience for your daughter to learn how to set her boundaries and be firm on her price. Since they are a US company, she should make it easier and give them USD prices. She should respond back to them with this statement: “My price is $65 USD (approx. £50). Payment can be made via XXXX, and once I receive payment in full, I will send you the files. Thank you for the opportunity.”

      Tell her NOT to send the files until payment is received IN FULL. This way, if they “accidentally” under-pay her, she can respond back that the files will be sent when they send the remaining $ amount due.

      Tell her that’s it’s not only okay to demand what you want, it’s expected and respected.

      For a company to pay $65 it’s nothing – seriously, it’s such a small amount of money it’s astounding they would even argue about it.

      Tell your daughter to work on getting stronger when dealing with clients. It is a practice, and with each deal she will become more and more confident.

      Let me know what happens!

      Reply
      1. lindsay

        Thank you Maria
        should my daughter ask for a contract and royalties? I will post you their response it may help .
        Regards
        lindsay

  47. Maria Brophy

    Hi Lindsay,

    No royalties, just the payment in full is what your daughter should require before sending them any art. Let me know how it goes!

    Reply

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