Retainer Plus Royalties

I’m currently in talks with a manufacturer based in China to do design work on a retainer basis with the added bonus of 5% royalties over the cost of retaining my services. This is a first for me, and I’m hoping people out there have some tips in terms of how to price my services, how I should gauge delivery (hourly vs. # of products), what to look out for, what to include in an agreement, etc. Any advice would be much appreciated. I’m very confident in my design abilities, but am still too new to this world to accurately and confidently ask for what I feel I should be making in a situation such as this.


I’m doing the same thing for several Chinese companies now.

As long as your retainer is based on your normal hourly rate (not discounted), then the 5% is gravy (bonus) if the product takes off.

When you say retainer, I assume that means money up-front. That’s the only way I work with international clients - especially new ones. Otherwise you waste too much time trying to get paid.

I bill out at US$75 per hour for plastic products that I develop from concept stage through final engineering. It’s well under typical consulting firm rates - but I have a day job and no overhead.

BTW - This is a great business model for designers for the next 5- 10 years, until the design in China catches up to Western design. Then forget it, we’ll all be on a level playing field and our salaries will go to hell like the US computer programers that lost their jobs to India.