If a publisher, commercial enterprise or manufacturer wishes to commission artwork for use across a pre-scoped product range (e.g. Greeting Cards, Stationery, Books, Merchandise, or point of sale items), a Royalties model may be the preferred License payment type (payment per unit sold).
Depending on the scoped factors, Royalties range from between 3% to 30% depending on the market and type of products the image is being licensed for.
For example, typical royalty rates for prints and posters are around 10%-15% of RRP whereas licensed gadget cases or similar can be around 4-7% (in the publishing environment). Greetings Cards, stationery vary between 3%-10% depending on core product focus.
Example of possible Royalties scenario for Greetings Cards (UK)
- Licensing Fee + Royalty – similar to above, but also with a royalty payment on each card sold. Artists would generally receive £100+ licensing fee plus 3% of trade price of each card sold.
- Advance Royalty Deal – the artist is paid a goodwill advance on royalties. In the case of a range, the artist would receive a goodwill advance of say £500-£1,000 and 5% additional royalty payment once the threshold is reached.
- Royalty Only – the artist will receive regular royalty payments based on the number of cards sold. Royalties are generally paid quarterly.
The ability to provide Reporting/Sales report and a monthly Royalty statement would be required before a Royalties arrangement would be entered into.