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I am a graphic designer with a full time job in digital marketing at a grocery chain. With that being said I have very limited knowledge of pricing artwork for freelance purposes and have been known to leave a lot of money on the table in the past.

Recently, I landed a project working with a Twitch streamer, illustrating for merchandise. Specifically, they wanted a "logo" (although they aren't fully branded) on the front of the shirt, and a large illustration on the back. Initially I agreed to work for an hourly rate, however, after a couple of days we ended up renegotiating to a % rate royalty agreement. I have been reading up on this subject matter and have a loose grasp on this legality, and it seems simple enough for one illustration.

In this instance however, I'm curious how I would go about writing a contract if this client wants to use illustrations for multiple pieces of merch (Shirts, Hoodies, Hats, Stickers, etc).

It's worth mentioning that this was only talked about briefly, and I'm not sure if they would want the same illustration placed on multiple different types of merch, or if they want different illustrations per piece of merch.

Is there a way that I can include all of this in one contract if only the shirt is being negotiated? Would I have to draft new contracts per article of apparel as they come up?

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  • Word it more generally. Wether the royalty comes from T-shirt or hat should not really matter to you. Specify either a flat amount or percentage of selling price as royalty. Make sure you don't accidentally commit yourself to make unlimited illustrations that maybe only sell once. Also be vary as clients that change their minds about pricing and try to find a way to pay you later can be a red flag, and you might not be payed at all.
    – Julian Steinmann
    Sep 20 at 17:49
  • @JulianSteinmann It was me that ended up changing my mind on how I would be payed, otherwise I would totally agree with you. To your point about generalization, what if I would like an adjusted % rate based on the retail price? For example a $15 hat's rate could differ from a $60 hoodie's rate. Would I be able to spell all of that out in the contract? Also what if the client would like a different illustration after we square away the first one? Can the one contract be amended or is it best practice to draft a new one per project?
    – Dillon
    Sep 20 at 18:07
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    You need a lawyer, not random opinions from the interwebz. We don't even know what jurisdiction you're referring to.
    – Tetsujin
    Sep 20 at 18:29
  • We are not contract specialists here.. we're designers. You need to ask an attorney familiar with royalty contracts. The opinion of any designer regarding contracts is about as valuable as any lawyer's opinion regarding a design.
    – Scott
    Sep 20 at 18:41
  • @Scott I don't think that designers should be put in a box like that, especially with many designers being business owners themselves. I figured at least one individual on here has been in a situation similar to this before. Also hiring a lawyer every time I need a contract written seems unsustainable. Might as well not take on the project at all at that point.
    – Dillon
    Sep 20 at 20:15

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Royalties as percentages is a trap. Let's assume you have a contract "10% of the sales cashflow of certain items belongs to you". One day he decides to start to keep more than the remaining 90%. He sells the items which contain your art to his other company for one cent each. The other company may sell them for $10,- each, but you get nothing of it. If it must be a royalty let it be a certain fixed amount of money per a manufactured copy of your artwork, no matter will it be sold for a cent or a grand or nothing.

You'll save your nerves and avoid much supervising work if you rent the usage right of the artwork (not the ownership nor copyright) for a fixed price for a certain time without a right to resell nor re-rent the rights forwards. There should be a limit how many copies of your artwork (max.) can be manufactured. You can sell or rent it to others at least after the agreed rental time is elapsed.

Get a lawyer to write a waterproof paper which in accordance with the local law and your intentions!

About the price: The goodsmaker takes your artwork only if he can earn with it. Check what legal alternatives he has (another artist, image stocker, free art) Using a stock image in a product as a major artistic hook generally costs much money. You probably have a good possibility to compete with it if your drawings are up to the task.

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  • I think this is actually more of a long comment than an answer... However, excellent point regarding royalties based upon percentages. +1
    – Scott
    Sep 20 at 21:14

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