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How to determine how much to pay for each reprint when licensing someone else's artwork?

1511 Views 2 Replies 2 Participants Last post by  kimura-mma
I came across a couple cool artworks and decided to contact the artists to see if I can print them on t-shirts. They both agreed to licensing the artwork and that they want it to be limited. Cool and all... but I have no idea how much to pay for how many shirts.

They both want to work out a deal to where if I want to reprint (print more after my first order) that I will have to pay for it pretty much. Just starting out, I'm not printing thousands at a time, not even 500 yet. I plan to start off with a batch of 200 to test run the design. Realizing all this, I realize that licensing will be much more profitable when I have a fanbase of at least 1,000+. But, I figure, I already asked, so might as well follow through with it.

The first guy, I blindly offered $100 to print 214 shirts. Now if I reprint 3 more times (about 600 shirts), I will have might as well paid for a commissioned design that I have the right to and can print as many times as I want (I usually pay around $300 for those). See how it's not too smart to license at such a small stage? It doesn't seem very smart at all from a business stand point.

The next guy, I haven't replied to yet and it's been about a week, but I'm still trying to figure it out. Is $100 for 500 shirts too little of a payment?

Should I pay per shirt (ex $0.50 a shirt)? I just want an equation or rule or something that I can use for mostly everybody I license from so it won't be a guessing game of how much to offer, you know?

Help :p Please.
(Sorry if this is kind of hard to understand, I wrote this at work at the very end of my lunch break so I was rushing!)
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You can't just arbitrarily choose a price like $.50 a shirt or $100 for 500 shirts. You need to understand your business model a little better.

Let's start with this...

How long is it going to take you to sell 214 shirts?
How much profit will you make after selling those 214 shirts?

The purpose of this is to understand how much money you can make over a given period of time. Then you can to determine what percentage of that money you can afford to spend on designs.
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