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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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