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Discussion Starter · #1 ·
I have found a piece of artwork on an artists site which I thought would work well with my line I am starting, and sent this artist an email asking if he would allow me to use it in exchange for a plug to his portfolio and a portion of sales. The artists was excited about it and said yes, that would be fine.

My question is, what is a reasonable amount for a website that is just starting up to pay an artist per shirt? I know big sites like Threadless and DBH they pay out a certain amount, but what would you consider a fair deal for a smaller website paying over time? I was thinking of doing something like the artist gets $2-5 out of each shirt sold up until $250 or 300 total. So they would get paid for the usage of their work, it would just be over the time that the shirts were sold.

Is this reasonable, assuming that the artists were interested in the first place without any mention of big pay?
 

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sounds fine, but to say for sure i would have to consider your cost and since you;re just starting, they;re probably higher than those other sites. also you're selling shirts at... say....20 a piece 250 in sales is about 12 shirts, what after that? i think you would wanna sell way more than 12 for each design. j

just some thoughts
 

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correct me if i am wrong, but i think @fender967 meant total payble to the artist of 250 - 300. You could also consider a stepped commission for the artist e.g. first 20 shirts @ $4, next 50 shirts @ $3, remaining shirts @ $2; which could be capped by dollars or number of shirts sold. It really depends on what your cost structure per shirt is like, don't forget to put this in there.
 

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Discussion Starter · #4 ·
Thanks Utemptu. Yeah, that's what I was talking about. Ok, I'll work something up, I just wanted to make sure that was reasonable. Ideally, I'd like to just flat out buy the work and then make full profit from the shirts rather than always having a cut taken out, so that is why I would have a cap.
 

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The way I see it, you have 2 options:

1. Pay the artist a fixed one-off amount to use the artwork on your shirt.
2. Payments based on sales as discussed previously. I would expect that you will pay a little more for this, as the artist is then assuming some risk for not getting paid the full amount.
Think about exclusivity of the design.

Cheers,
 

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Whatever route you decide to take, make sure that you get the artists consent to use his artwork in writing, as well as having the payment terms clarified in print.

People often fall out over mutual agreements, so keep it formal.
 

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Ideally, I'd like to just flat out buy the work and then make full profit from the shirts rather than always having a cut taken out, so that is why I would have a cap.
Perhaps s/he would prefer this as well particularly given that it will be a start up. Take it into consideration when negotiating.

As was suggested, get it all in righting and try to get exclusivity to the extent you can. An outright buy of the design would be more of an assurance of exclusivity.
 

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The artist retains ownership of copyright even when a design is bought *unless* it is specifically transfered to you in writing in the agreement. Make sure you get copyright ownership in case the design becomes popular and you do not want to take it out of the line up anytime soon. If the designer is paid in full - at your cap price - they still own the copyright and can then sell it to your competitor, to take you to court to stop producing it unless you pay more money.

Don't be under anyone's thumb. Get the copyright *in writing* on any design you pay for.

The following is just food for thought, as I worry about these things alot and it was the first concern that popped into my mind when I saw the fixed fee per tee shirt sale:

I also would not pay the artist in fixed dollar amounts and I will tell you why. There is only one way I would agree to that, and that is if I already know for a fact, without a doubt what my net profit per shirt is. If you know your net profit - for sure - then I would not worry so much about a fixed fee per shirt, bc you'll know what you will be left with to use for operating capital, but if you don't know absolutely positively what your costs are, this is my concern:

If you plan to sell your shirts at $20 per shirt, and your costs are $7. That leaves you $13 per shirt. If you signed that you would pay $5 per shirt, you keep only $8. What if your shirts do not sell at $20, and you must reduce your price to $16. Your cost is $7, that leaves you $9, and you signed to pay $5 to the artist, now you are left with $4 net profit. Hardly enough money to buy another blank.

I would agree to pay the artist a percentage of the net profits (remember to pay off the net profits, not profit, so you do not sell yourself short by paying the artist before you cover your operating costs.) Yes, you must word things properly bc if things go sour and a lawyer comes into this, they will want the figure off the profit if that is what you write.

If you sell your tee at $20 and you negoiate to pay the artist 20% of the net profit, and your cost is $7, that leaves you $13, you pay $2.60. In this case, you are left with $10.40 to roll back into your future production. If your tees do not sell and you must reduce your price to $16, and your cost is $7, that leaves you $9, you pay 1.80, and you are left with $7.20 to roll back into production, a much better scenario than paying a flat rate per tee shirt - using the same exact sale prices and costs.

You can adjust the percentage to what you think is fair, I only used 20% as an example to show how the same sales prices can leave you with more or less money to roll back into your future production costs when paying by flat fee per tee, or by a percentage of net profits.

If you make less per tee, you don't want to have to still pay the artist the higher dollar amount. In the same respect, if the design is great and you can increase your price for it, the artist will make more per shirt (which is not my foremost concern.) I am focusing on your well being and the ability you will have to keep the appropriate amount of "profit per sale" to *roll* back into your business for inventory for future stock.

You need operating captial, pay the artist on a scale that slides along with the sale price to protect your capital interests.

I'd also suggest you decide in advance on how to get out of this if the design does not go over well. Set some sort of time limit - whatever you choose - say 6 months as an example. If in that time sales are slow, and the artist only makes $120, and the cap is $300, but the design is dragging you down and you want to replace it, set something up that at 6 months time - you will pay the designer in full whatever the balance is, in this case $180, and you are then thru (of course you still own the copyright - that design may come more into demand at another time in the future, and it will be yours to re-introduce.)

Sorry so long winded. I would re-read and edit it, but I am too tired. :) This wasn't an easy concept for me to explain, the words to make it shorter elude me at the moment.

Good luck to you... I hope this goes well, no matter how you choose to proceed, even if it is to pay a flat fee per tee sale.. That can work out well as long as the retail price stays high, I was focusing on the sadder side of reality, sometimes great designs just don't sell, or sell as well as we'd hope, what then? Best wishes to you and...
 

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Kelly,

Thanks for taking the time to write that, although I am not in need of it, it is VERY insightful and I would imagine that it'll help out a lot, to him, and others along the way.

It's just nice to see someone take the time to help, and I notice that you do that all of the time.
(You explained it fine too)

There's not a 'thumbs up!' icon here, so just play-like this is one! heheh

!

Randy
 

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Thanks so much for the kind words, Randy... that's really nice of you... here's a thumbs up right back at ya: ! :)
 

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There are pros and cons to either way of doing this.

I have been facing the same question for the last couple months and getting to the point where I will have to have a concrete format for how we will run this aspect of the business.

I am sitting on the fence and if I had to make a choice at this very moment it would be BOTH.

I would offer a very small flat amount $100.00 - $200.00 depending on the quality of the design ( and only if I felt very strongly about it)

I would offer a middle of the road per unit amount - $1.00 - $2.00 per unit sold (paid monthly)

I love all the info Girlzndollz added and it assisted me in making sure I am considering all aspects of my decision. With me being a designer as well I would appreciate having the choice depending on my situation at that very moment.


Also with the artwork copywright I am going to look up something we have used in the pass that allows exclusitivtiy of use and first right of refusal for non-mention uses.

it allows the artist to feel they still have ownership of their work. I will speak with my lawyer about this and see b/c we did not have the same objective when we drew this doc up.

I just like clean cut situations where everyone's needs needs and concerns are met.
 
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