Stephani Stephenson on tue 27 feb 01
One thing to factor when you are trying to decide whether to charge an
up front fee or go for a royalty is the company's
ability to sell the final product. What are their projections? what is
their track record? 3% is a typical royalty.
if the company receives one million dollars from the sale of the
product, 3 % is $30,000 dollars.
If they don't quite have their own marketing act together and sell
$10,000 worth, you get $300.
If they never get the product off the ground you get nothing.
There is A LOT involved in getting a product out to the mass market, and
designing or making the prototype is a small part of the overall
The company may not want to put a lot of money out front. It doesn't
necessarily mean they are trying to cheat you. They will be putting
quite a bit of money up front in other ways. If they work this way as a
matter of course, they will have a well prepared contract for you.
You may be able to compromise, by agreeing to a royalty, but inserting a
clause that guarantees you a minimum amount by the end of
a stated period of time (6 months, one year, etc.)
Do your research and figure out what it is worth to you. If the idea of
royalties scares you , or you don't have very much confidence in the
company, go for an up front fee. In the end your success will depend on
how well the company makes and markets their final product.
I did take a chance on royalties with a project recently. I designed and
made prototypes. The potential value of the royalties far exceeds the
amount I could have charged up front. The prototypes are being turned
into products. It was a project that came at a slow time , it did not
take that much work, the designs were not that close to my heart, but
they were good ones. These were anonymous designs, my name isn't on
them, they won't even be made out of clay. The company has good salesmen
and the goods will be made in this country. It will be interesting to
see how it turns out. Truthfully, I wouldn't have enough money to take
them to court if something goes awry, but I decided I was willing to
take a calculated risk .
someone else who's in new territory
Priscilla Wilson and/or Janice Lymburner on thu 1 mar 01
Does anyone have suggestions about how to go about finding potential =
for designs to be reproduced in clay? I'm developing a line of unique
tableware, and I want to explore selling the whole line as an =
producing it myself or contracting to have it produced. I don't have a =
how to connect with companies looking for designers.
Sautee, Georgia where the trout lilies are about to bloom