I have a client who would like a book cover design and wants to use it for unlimited publishing. For the designers who have experience with this have you negotiated royalties? Or just accepted the project for a flat rate?
It's up to you, and quite often it's situation dependant. If it's a very niche book that's only going to sell a couple of hundred copies then you're probably going to prefer a flat rate anyway, if you're illustrating the cover of Dan Browns next novel however you might want a piece of the back end... The main thing is getting a fee that you can walk away happy with.
It's quite rare designers get royalties on the layout of a book. And rarer an author would accept to give your any royalties for this.
And by unlimited publishing, do you mean the client is asking for the "right" to sell 5 or 50,000 copies? Or do you mean using the cover as a template to resell? Because if it's a template to resell, then you can sell him the rights accordingly but you also need to be careful to not use stock pictures that you purchased and for which you didn't pay the commercial rights.
You can adjust a flat price for this but since all books are usually created to be sold, that would be unusual to ask for royalties because the book will be published. The only time I could see this acceptable (for an author) is if you work in partnership with him and create some content for free (ex. pictures, illustrations, texts, etc.)
Otherwise, it's a bit like asking a commission on the products your client would sell using a catalog you designed for him!