Packaging design fee

Question

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.

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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

Answer 1

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).