Royalties and License contract

Hello everybody, :smiley:

I have read about royaltie fees in this forum. It should be in between 3 - 10% per sold item of accessoires (BtoB). But could anyone be more specific? Like;

Under 10.000, between 10.000 and 100.000, above a 100.000 sold items, etc?
To me it is still a black box. :confused:

And thus anyone know where I can find a good License contract?
What are the thinks I must not forget to put in?

Thank you very much!

Yvonne

:smiley:

Don’t do it. It’s a bad business plan for a designer.

Good luck getting paid unless you’re working with a Fortune 500 corporation.

i have ONE royalty agreement from one job, its been 3 years - no pay :frowning:

Do you mean that you didn’t get paid or that you never sold anything? :frowning:

I’ve been on both sides of royalty deals. As a designer, and from the companies perspective. It depends highly on the product,industry and volume. For most general consumer products that you see in the larger chains, the profit for the brand is 5-8%. Unless you have a name that has it’s own brand, the company will want the royalty to be in the range that they budget for design which is usually about 1% - 3%. If you bring patented innovation or enough design innovation where they can get a higher price for the same item at retail, then you can be at the higher end of that spectrum. For just a nice style of a usual product, you’re lucky to get the lower end of that spectrum. After all, why would they pay you a high royalty if they could hire someone to do the work? If anyone is getting a 10% royalty paid for any design work more than one-offs, I would love to hear about it. I have also worked with major brands licensing their brands. Any top brand (think popular movies, Disney, Coke) can get only a few percent, and only goes up around 10% for low volume, special edition executive pen sets or some other such very limited appeal, non-price sensitive item.

I’ve heard of better deals from non-paying companies, but that’s a different conversation. Probably need to search on “too good to be true” and “scam” for more info.

Dear guest1000,

Thank you very much for your reply, it is very useful!

Regards,

Yvonne

I designed a product 3 years ago, under an agreement for royalties. I ended up doing most of the work, and basically ended up inventing the product myself. It was a moonlighting job, so I didn’t get very personal. The product was supposed to go into production 6mos after I finished, well its been 3 years with the manufacturer dragging their feet, and because the client has no capital - they can’t do much else. The client recently received a few samples of production, now their trying to renegotiate the design royalties contract because they smell profit. good thing I filed a patent in joint with the president.

be careful to gauge the client, and determine if their a deadbeat - or a fatcat. and don’t get taken.

beware, my two cents.

Hello everyone, :smiley:

I have another question regarding the model (design) rights:

A furniture label offers me 3% royalties in return for the manufacturing, market and model (design) rights. Which means that I lose the rights for the design.

I always thought that there where two scenario’s:

  1. I get paid royalties in return for the manufacturing and market rights but I stay owner of the design.
  2. I get paid one big amount of money, and lose all my rights.

The interesting part is that this furniture label tells me, that if he only gets the manufacturing and market rights and not the rights of the design, he will pay me less royalties then the mentioned 3%.
On the other hand he says that it is not interesting for me to have the only the model rights, because they are worthless without the manufacturing and market rights.
If this is true, why will he pay me less royalties if he does not get the model rights? This doesn’t feel okay. :frowning:

I prefer to stay the owner of the design. What is your advice?
Terms in years?:
Is it possible to set up in the contract a term, for example two or three years, that the manufacturer gets the rights to manufacture and market my products? Because, what if he has the rights but doesn’t sell enough of them?

And what if he decides that after a view years he doesn’t want to manufacture and market my products any more. Then I like to go to another company with my designs. Is this possible?

Terms in countries?:
This manufacturer likes to market this product in our home country in Europe. Can I put in the contract that he only have the manufacturing and market rights for this particular country? This gives me the opportunity to look for other manufacturers in other countries who can market my products over there.

Well, I have a lot off questions. Hopefully someone can give me some answers.

Regards,
Yvonne :smiley: