straight fees vs. royalties

I wanted to ask your opinion if you don’t mind. I’m doing some furniture desigjn work for a company down in the US (upholstery, contemp. recliners etc). they want to work on a per sketch basis. I would rather not put myself in the position of being the “sketch artist”, making a living off the actual labour and act of producing the drawing as opposed to selling the intelectual property and skilled design thinking behind each sketch. You know what I mean? Most clients like this seem to think that they should pay a couple hundred bucks per sketch then walk away. Would it be fair to ask for a more substantial amount for each concept or style, somewhere in the ballpark of 500-1000 per drawing. This way they are investing more and buying the intellectual property rights? I guess another scenario would be that they pay less (maybe around 200 per drawing) but then guarantee that all derived styles will be on a royalty basis as initial fees as an advance?

( FYI: i have approx 4 yrs. experience in a corporate in-house furniture environment but less freelance/independent experience)

thank you in advance for any suggestions you can give.

our firm does both. however where we used to rely on straight royalties, we are finding the fee-based work helps pay the bills and start a good repertoire with clients that can lead to other things. royalties fall off, can be sporadic, or the client may try to find loopholes to get out of the length contract. we have more overhead, so we activiely look for fee work while trying to drum up the royalty work. it’s your job to convince and show them how important it is to maintain design integrity or proper development of the design by keeping you on the project.

I have hired freelance designers as “conceptual sketch artists” recently, and most of the designers that accepted the project seemed happy with the arrangement. I’m sure they felt it was a good start to what may become a long-term relationship, which as the design director, is the way I felt about it as well. We avoided a royalty arrangement for simplicity, not because we were cheap. And, the designers got paid well for each sketch (most of which were not used).

The project was for small housewares objects - different from upholstered furniture. To detail up my freelancer’s designs with an in-house CAD person was pretty easy - prototyping etc., all easy. For a lounge chair though, I don’t know if that is such a good arrangement. Who is going to finish all the detailing? How is the design director going to follow-up with you when they produce the prototype?

Make sure you get paid well and you are finished when you submit the designs, or, have an arrangement to get paid for the design development consultation as well.