Negotiating a good licensing agreement when licensing your artwork is important to maximize your winnings. Before you sign on the dotted line, learn about royalty payments ins and withdrawals and take the time to negotiate a contract that works for you. Then follow up: check the credit pointer so you can intercept any deficits in your royalties. Deductions are as important as the royalty rate to determine how much money ultimately arrives. For example, a royalty rate of 2% of net sales without deduction can earn you more than you would get from a 5% royalty rate, from which different licensing expenses are deducted. Per unit of royalty. In some cases, an artist may negotiate a “per unit fee” related to the number of units sold or produced, not the total money earned from sales. For example, you can get $0.50 for each licensed product sold or manufactured using a unit charge. 1 – ROYALTY: Here, the manufacturer pays the artist a percentage of the license of its gross turnover. Do you want your own licensing model that you can use over and over 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 modify as needed, and instructions, this is the perfect short and simple agreement for artists who are not yet ready to hire a lawyer. For more details, click here: Licensing contract/Model Excerpts.
Deductions are items deducted from sales before royalties are calculated. As a general rule, it is acceptable for a taker to deduct from gross sales all amounts paid for taxes, credits, returns and discounts on quantities granted at the time of sale. It is also not uncommon for a taker to deduct the shipment (the cost of delivering the products to the buyer). The lower the volume, the higher the royalties: if the products are sold in specialty stores and in small quantities, the royalty rate should be higher. Finally, no matter what royalties or other provisions you negotiate if the company you are dealing with is a scammer. Always research the companies you contract with. If the artist is known and his art is a proven seller, royalties would be at the top of the scale.