I was inspired to write this blog after coming across a number of Facebook posts recently citing the question of how to go about selling your artwork and specifically whether or not it’s worth selling the copyright to your work. Disclaimer: most of the information given out in this blog is my opinion based on personal experience and research done and hearing from other designers.
So this is a big topic with no right or wrong answer really; it’s all about whether you get the right compensation at the end of the day. I’m approaching this from a Textiles & Surface Design angle where there’s two models to follow: selling outright aka total buyout (handing over the copyright) or selling via a licencing agreement whereby you retain the copyright and receive compensation based on a percentage of sales (wholesale or otherwise).
Which one can bring in the most $?? Again, there’s no quick answer although with outright selling you can expect to receive anything from $500-700 upfront if selling direct.
There are also hybrids of the two where you may get an upfront sum aka “creator fee” and subsequent monthly/quarterly/yearly payments. And there’s also partial buyouts based on market categories and geographical territories. For example, you give exclusive rights to a home wares manufacturer to use your design for one of their product categories in the US only - so you’re free to licence the same design to another company for the same type of product outside of the US or obviously for any other type of product category anywhere in the world.
A typical licencing agreement may stipulate a 3-10% earning per unit sold of the wholesale price. So the potential earnings via licencing may be better or not in the long run. It’s all down to sale revenue figures over a specified period of time. Royalty payments from licencing may take 1-2 years to reach you based on the production run and many other factors at play.
Licencing can be a great way to create a name for yourself and get more lucrative deals as a result once you’re an established designer with a loyal audience/following. Whereas selling your copyright means you remain anonymous behind the end product. In fact, if you sell outright via a studio/agent you may not even know who bought your artwork and for what end product.
A licencing contract will also stipulate the duration of the agreement so you may get back full rights to your work after a period of time; anywhere from 1-3 years and there may be extensions to the contract if the deal is working well for both parties.
Deciding what’s best for you depends on the market you’re designing for and the clients’ needs. I think it pays to be flexible especially at the beginning of your design career. Licencing can seem like a minefield if you’ve never worked with this model before; not to mention not knowing what favourable terms are best for you. Contracts are just not easy to grasp for most people! So at the start it may well suit you to find an intermediary such as an agent that can handle this part for you in exchange of a percentage commission or other fee.
So what kind of work is best suited for buyouts vs licencing? As a rule of thumb, think of the type of product your design is best suited for. If you know your designs best go on fashion prints then an outright sale is the norm. You can’t expect the buyer of your design to keep track of how many dresses sold with your designs in X number of stores across the globe or just one country so that they can then pay you a percentage of sales. Even if you got this arrangement in place, you may be a lot worse off than selling outright!