This section of the forum is for discussing the business and finance issues of the t-shirt industry. Which business structure to use (sole proprietor, LLC, S Corp, etc), how to handle billing, where to register your business and get the proper licensing, etc.
We're currently looking to do work for a company that promotes/markets bands, and their tours. They want freelance designers to create shirts for their artists prior to the start of each new tour. How in the heck do I come up with a fee that is fair for both sides??? Is there a set rate for this type of work??? I'm sure that there are all sorts of differences and that negotiation is needed, but I need a starting point. Any suggestions, etc. would be greatly appreciated. Thanks.
Awesome, congrats! Sounds like a good opportunity.
Do you mean you'll be designing the shirts? Will you then provide the shirts as well? Some companies who specialize in band merch charge a package rate for a design + so many shirts, stickers, buttons etc. If it's part of a package you can usually get away with charging a little less for the design itself.
I know several artists who charge a flat rate of $300 to design a t-shirt for a band. Some charge less, like as little as $100, some charge more - I've seen $750, but $300 just for the design seems like a good starting point if it's something you do regularly. Then if it's part of a merch package, you can work it in.
We actually started our business from an art/graphic design and multimedia background. It has been our experience that setting a flat rate breeds customers asking for crazy numbers of revisions. We typically stick to charging an hourly rate for new customers which helps keep revisions down. If you really want to give them an hourly rate be sure the number of revisions included in the quote is specified and that the revisions are not to exceed more than 50% of the design or it is actually a whole new art. It is also a good idea to let them know the price is temporary and may go up or down depending on how much time you will need to invest on their projects (ie. how picky they are going to be).
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Re: Suggestions for figuring fees
Quote:
Originally Posted by Scrnprntmom
... How in the heck do I come up with a fee that is fair for both sides???
I wouldn't even consider fair on both sides.
Business 101 Lesson 1: Charge the highest possible price for your product.
Business 101 Lesson 2: Set your price just low enough to keep your competition out.
Given that, you should look at your cost and figure a profit margin that you want. Typical raw markups are anywhere from 2 times to 5 times raw cost. If your designer is charging you $100 then you would charge between $200 and $500.
However, a bigger point is what is the value of your product? Is it $1000 or is it $50?
One more thing to consider is to share risk. You do this by taking a % of actual retail sales. So on every shirt they sell for $30 you get 50c or $1 or something like that. By doing this you limit your downside (cost of your product to you) but you have unlimited upside.
Business 101 Lesson 1: Charge the highest possible price for your product.
Business 101 Lesson 2: Set your price just low enough to keep your competition out.
Given that, you should look at your cost and figure a profit margin that you want. Typical raw markups are anywhere from 2 times to 5 times raw cost. If your designer is charging you $100 then you would charge between $200 and $500.
However, a bigger point is what is the value of your product? Is it $1000 or is it $50?
One more thing to consider is to share risk. You do this by taking a % of actual retail sales. So on every shirt they sell for $30 you get 50c or $1 or something like that. By doing this you limit your downside (cost of your product to you) but you have unlimited upside.
Good Point! We're providing the design ourselves, so that helps a bit. I don't know what my competition would be for this type of venture...will have to research it a bit more.
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Re: Suggestions for figuring fees
Here is an easy way to tell if you charge the right price.
If you say it will be $x and your customer says ok right way, you charged to little. If they say let me think about it and come back and say ok, you are probably right on or low. If they negotiate, you are in the ballpark. If they never come back you are too high.
In the end though, you want to be profitable so selling for below cost is a risky move. It can be done to bring in business on a limited basis.
Now, when you do give your price, stress the value of your product to your client. Convince him that price is secondary to value and you will have a sale.
Suggestions for figuring fees 
