November’s One-A-Day Q&A – Question #29

29 11 2016

Q: I am trying to figure out how to license my art to wine and paint party businesses. I don’t know if there is a going rate for these businesses and if payment would be made ‘per use’ or a ‘flat rate?’november-q-a-final

A: Good for you. These are two very different types of businesses, since one is food-related and the other is a service business. Either of them could work on a flat rate or with a licensing royalty for each product sold. You need to ask them what they are willing to offer and then figure out if that’s a good deal for you. Especially when you are starting out, it’s best to not worry so much about the industry standards.

If they offer you 10 cents a label, is that good?  You need to ask them how many labels they plan on printing in the first run, and how likely is it that there will be a second and third print run (in wine there may be a ‘set’ quantity available and no more), to help you make a good decision.

If they plan on only printing 5000 labels, then at .10 each you would only make $500.  A flat fee of $1000 would clearly be better. Always try to get them to make an offer first, and that puts you in a better negotiating position. Then ask relevant questions. Also, make sure whether it’s a flat fee or royalty, you define the time.  I see many people agree on a royalty over 2 years, but with a flat fee, they forget to limit the time frame. So if someone offered you $500, you might come back and say, fine…$500 per year, so $1000 over two years.  Use the various contract elements to help you negotiate.

 

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2 responses

29 11 2016
mesmerel

Question: How does 500 labels x $.10 yield $500 and not $50?

Enjoying the questions,

Sara

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29 11 2016
blogjnet

Sara, a typo – that’s how! Should have been 5000 labels. Thanks for the catch! Always, J’net

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