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I am a graphic designer and illustrator from the Czech Republic and time to time I struggle with the very essentials of the licensing of my art.

It is because my country is still pretty young democracy and people here are not used to fight for their own rights. Just like freelancers who sell their art. It is not much common yet to let the customer pay not for the work and hours spent only, but also for the type of license they want to apply for the art. At least when you are a freelancer.

But I like to stand for my rights, so I have to search what is the custom elsewhere. The law in our country may differ a bit, but the principles are similar. I got a GAG Handbook, it is very useful, but sometimes the numbers and the prices are not transportable to my own conditions of smaller middle European country.


That much for introduction, for I consider it important due to my origin. Anyway, here is my question.

I have learned a lot about pricing for the design that sells as the main feature of article. Such as mug, card or t-shirt design. For here the art sells. And found some examples of % royalties for such art licensing.

But how about common package design? When it is also about the quality of goods itself?

To be specific, I have a design of a package for cat goods. You can find it on my Instagram

Now lets say:

  • the work itself takes $ 1.000 (to count easily)
  • that means $ 1.000 = hours spent * hourly rate
  • It is original design ordered by this client for the purpose of package

Now. I got feeling that there is a slight difference, whether the client uses the design once for Facebook or prints it uncounted times and sell it on the surface of his goods.

I am not able to find whether should I add / charge something extra, flat fee or % royalties to the price when it is used on the package.

For example the Handbook uses price examples for different types of packaging and the regional size of retailer, but does not offer any key to read what is the work part and what is the licence part of the price - if there is any.

And I would like to find the key to understand how can I transfer it to our local prices.

Thanks to everyone who would add a piece of advice.

Karel

  • Here is an article that talks about this some. – Ryanthehouse Sep 29 '16 at 11:32
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In my experience, packaging design / artwork would almost always be charged as a flat fee. However, there are a few different ways that this could work...

If you are creating a STYLE GUIDE that will then be used as the basis for lots of different formats then the flat fee can be quite high depending on the reach (an international brand that I work with recently paid 30k USD for a new design style guide). This would then be sent to other design / artwork houses for the generation of individual SKUs and they would be paid for that work.

If you are generating individual designs / artworks for various pack formats, weights, flavours, etc then you would charge a flat fee per format. For instance, if there was an inner pack, a multipack and an in store display unit then that is three pieces and 3x the fee. If there are 4 different flavours, then you would charge for each flavour. In many cases, you would charge a higher fee for the first (master) design and a lower fee for the variants (roll outs).

The one common exception to this rule is if you create an illustration or photograph that somebody then takes and incorporates into their packaging design. In this case you could charge based on the number of impressions, in the same way that Getty Images (for instance) would charge.

All that said, what you can charge will vary based on the customer, until such time that you are a very established and in demand designer and can therefore name your price (as was the case for the 30k bill I mentioned above). A small local firm will have little or no budget for their packaging design, but when you get a call from a major brand that will be producing millions of the item that you are designing the pack for, you can dramatically increase your fee.

The key thing to bear in mind is that the producer of the product will want to divide the cost of your design between the number of packs that it is applied to and they will want the final cost per pack to be tiny (just a few pennies / cents per pack at most).

  • Hi Chris, thanks a lot. The different price level in Czech is a sort of problem for me. Yet I have so far figured: - I should consider the costs per pack - Expected number of sells or produced packs That should give me idea how many times my art (both illustration and design in this case) will be reproduced with keeping in mind reasonable cost per pack. Yet does it mean my opinion - compared to someone who prints my art ONCE and hangs it on the wall I definitely should add some fee to the one who uses it on products - is generally right? (not used to send on ENTER commenting :)) – hokic Sep 29 '16 at 12:36
  • Not necessarily. Lets's say someone loves a one-off canvas that you produce and is happy to pay 500 pounds (dollars, koruna, whatever) for it. If the same piece of artwork was on packaging for a product that sells for 1 pound, and the company can only afford to budget 1 percent of retail cost for the design, then they would have to be confident that they can sell at least 50,000 additional units for that design to be worth 500 pounds to them. Lots of variables in there, but these are the kind of calculations that everybody does to protect their margins. – Westside Sep 29 '16 at 13:15
  • Hey Chris. So… I try to think it over. What you say, is - number of impressions does matter, and I should keep it in mind when negotiating the fee. But I should also take care about who the client is. Sometimes there is better to go bit lower to make a deal then to try to stick on the price that is not acceptable for the particular client. So the first part answers my question whether there is the difference between packaging and wall hanging, while the other says that it is still business and I should play my partner the same way I play in the poker - if I wanna sell. Right? – hokic Sep 30 '16 at 12:25
  • Haha. Well, there's is always a little overlap between poker tactics and business tactics, ;-) but I think the lesson here is to find out as much as you can about a company before you quote. Try to find out how many units they sell and how many different products they have. This will help you pitch it right and if you go in at a good price then maybe you can design EVERYTHING for them. Also, don't restrict yourself to Czech companies, some people like a 'foreign' design aesthetic to help their products stand out or seem exotic. – Westside Sep 30 '16 at 13:11
  • Hey Chris, have had very busy last days, in the matter of personal life. So sorry for delay with my reply. But thank you for all your help and support. It has been really helpful. Thanks! – hokic Oct 5 '16 at 8:55

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