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Licensing IP for shirts -how much is typical?

2028 Views 3 Replies 3 Participants Last post by  kimura-mma
Hi all! I am in the process of starting a niche t-shirt line and there are a few designs I have that I'd need to license from the owner of the IP. Now most of these companies are very small (some one or two man operations) so I'm not looking to license football team logos or comic book characters but to approach some of these very small companies with a t-shirt idea and ask for a license to produce the design.

The real question I have is; how much should I offer? What is the "going rate" for licensing; a set dollar amount per shirt or a %? I know there is often an up-front licensing fee in many cases. In essence I want to approach the target company and say "Here is a design I want to put on a t-shirt and sell. I'll offer you X and Y to do it."

Anyone know what the big guys charge in licensing fees? Royalty %? Anyone ever work out a smaller deal with someone and is willing to offer the broad terms?

I'm thinking of offering $3-5 per shirt sold, but need to do my homework before I contact anyone. Thanks!
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Why not just ask for permission first? No fees, no license, no commissions. Point out that by you selling their images, they can get more exposure. Perhaps you can add a tag line to the image with their name.
Well, that is exactly what I plan to go in with first, but if they want to "deal" then I want to be prepared. Thanks!
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It all depends on the specific property. Major properties can be very expensive. The NFL charges $100,000 per year in upfront fees for apparel licenses. MLB, NBA and NHL are between $25,000 - $50,000. I've never worked with character licenses, but I would imagine the big Marvel, DC and Disney characters could be close to the sports leagues. Same with video game characters. Much of it depends on what you want to create and where you intend to sell. So it's a good idea to have that info handy along with projected sales. Royalties are usually between 5% - 15%.

If you are looking to work with a smaller company, it's hard to gauge what they would charge for licensing. Your best bet is to contact them and casually ask them about licensing opportunities. If you feel like a deal can be worked out, it's a good idea to consult an attorney experienced in licensing negotiations. It might be overkill to have representation during the negotiations, but it doesn't hurt to get some advice before entering into a contractual agreement.
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