Sunday, September 13, 2009

So you want to LICENSE your ART...

I have had a number of questions on two subjects LICENSING YOUR ART and HOW TO DO CRAFT FESTIVALS so in today’s post I will address the first topic and later this week I will attack the 2nd.

When you go into shops and even the supermarket and see images of sports figures, cartoon characters or artist’s works on products you are being exposed to the licensing business.

Many artists’ names come to mind immediately like Mary Englebreit, Thomas Kinkaide and Donna Dewberry when you discuss art and licensing.

Generally a company or an agency will approach an artist and discern their interest in the licensing market.

There are formal contracts and lawyers involved and eventually a product or products will be produced using the artist’s work or inspired by the artist’s work.

Mary Englebreit for instance went from direct representations of her illustrations on flat objects to elements pulled from her paintings on fabric and even 3 dimensional figurines.

If an artist is popular enough like Mary or Thomas Kinkaide (the painter of light) they don’t have to worry about being a sculptor or knowing the fabric business; products are produced in sample form and they lend their suggestions for alterations and details but in some cases never even see anything other than photos until the product is on the market.

I got into licensing by accident it happened that the owners of a needlework company called Candamar Designs here in California were at an art festival back in the 1980s where I was showing my pen and ink originals and they talked to me at the show, left a card and made arrangements for a meeting at their business.

I got to tour their factory in La Mirada and go to lunch, we agreed on the basics of an agreement and about 2 or three weeks later I received a contract which I ran by a lawyer.

Once the contract was in effect I loaned them artwork which they adapted as needlework kits with my name on them as designer and I was paid a royalty per kit sold.

KNOW that it can be months or even more than a year between signing with a company and ever seeing any money.

I know artists who signed contracts and had companies go out of business before they could ever collect any royalty checks.

Depending on the company and the product it can be anywhere from 2 percent to 7 percent of the wholesale price of the item and most companies will send you a detailed spreadsheet with the items sold, at what price and how much you were paid per piece and in total…I found that most companies paid quarterly but occasionally you will find a company that is small enough or staffed enough to pay monthly-T shirt companies and sometimes rubber stamp companies will pay a flat fee up front and you might be able to negotiate some free product but no royalties other companies will give you work money and a lower percentage still others have exotic combinations of all of the above so anything is possible.

I always made sure I got at least one or two PORTFOLIO pieces of the finished item, T Shirts I got a dozen and if the company paid a onetime fee I also negotiated from 2 to 12 free pieces that I could keep or sell-since I was doing a lot of art and craft shows I had a place to sell these products and it increased my take from allowing the companies to use my work-it also gave my regular customers new opportunities to purchase items when their walls were full of flat art or as gifts.

Also you can often make arrangements to buy your products from the company (under the normal rules their wholesale customers abide by) at wholesale prices.

If you don’t understand wholesale prices you need to educate yourself as a business person if you intend to venture into making your art a part of the Licensing field.

SELDOM is the wholesale price of any item HALF of the retail market price.

In the old days some products used to have the retail price printed on them-those were the days before bar codes.

Most items have a suggested retail value so for the sake of this discussion let’s say the item is $10.00 US.

Wholesale would be $5.00-that’s standard BUT let’s say the item is purchased by a major chain and they buy all or most of the product produced-they will negotiate a better deal; it could be 50/10, 50/25, or even 50,25/10.

That means you take the $5.00 wholesale and then deduct an additional percentage for quantity.

50/10 would be $5.00 less 50 cents (10%) or $4.50; 50/25/10 would be $5.00 less $1.25 (25%) less an additional $.37 cents (10% of $3.75) for a wholesale price of $3.38-if you have a 5% contract you get about 17 cents per unit sold.

Some items sell for so little that your percentage is based on dozens or even half or full grosses (a gross is 144 items).

If you are asked to license your work ask a lot of questions make notes and be sure that all you discuss is covered in the contract you sign-CLEARLY covered.

A T shirt, wearable’s and accessories company may take one design and produce it on several types of shirts each with a different price and each with a different minimum quantity required per size to purchase…they may also put the same design on tote bags and even towels-make sure you know how you are being paid, per item, per wholesale unit, per dozen???

A wholesale unit can be a specific prepacked quantity of any item that comes in sizes or a collection of designs like cards that come with a display or rack-there can be a discount on such a purchase because they are forced to take a lot of stock but also the company will not be paying you for the price of the display if it is not free so know the terms.

Every company I licensed with sent me a catalog and price sheets just as if I were a wholesale customer THEY set the prices, only the highly favored few artists at the top of the industry will ever be included in any price negotiations.

There are many books available on art as a business and I could go on and on with the intricacies of this business-don’t have your money spent before you make it and because you get a big check once don’t expect the same check every month-many licensed artists are happy if they get a hundred bucks a month average.

I’ve also saved the bitter truth for the very end-you are as good as your contracts-if you want to license your work you must be highly original but also very accessible to a wide variety of consumers-in other words you’d better be GOOD and you’d better be POPULAR.

Because you do well in one market it doesn’t mean you will do well in every market and your style can be in one day and out the next.

You also must produce new designs regularly or on demand depending on your agreement and many things you design will NOT be used by anyone-be sure you have clear cut agreements on how designs are licensed-is the company buying first rights, exclusive rights, right of first refusal etc...

The companies who use your designs are taking a huge risk that your work will make them money-if it doesn’t you’re out-read the cancellation clauses very carefully and once you are out make sure the company can’t go on using your art without paying you-it must all be in the contract.

Some companies even have liquidation clauses-if they have to dump your items to a discounter you get a small percentage of the remaining merchandise or NOTHING-be careful before saying yes to that one-again it must be clear in your contracts.

Finally, NEVER go into business with anyone on trust and a handshake (especially family or friends).

Always treat every transaction regarding your artwork like a business and have something in writing so there are no tears and bad feelings later on.

Some of the closest friendships in the world have ended because of business deals and partnerships that went south and there were no clear written agreements to refer back to-just DON’T DO IT!

It’s a lot of fun to go into a shop and see your work being displayed as wearable art or placemats or party napkins but there are very few artists who ever get the privilege of this experience and it gets harder every day in this bad economy.

I was turned down by an agent just recently because my work is “too dated” and no one wants the altered art or digital stuff there’s too much of it around all ready.

GOOD LUCK!

2 comments:

  1. WOW! Thanks for all the info. I enjoyed reading (most) of it! LOL!
    I do craft fairs, so I'm looking forward to your next post!
    Thanks,
    Kristin

    ReplyDelete
  2. You're welcome = it IS a lot of info and it hurts my heart when I hear of an artist getting taken by a slick company-so at least this is a little bit of a perparatory eye opener!
    :-)

    ReplyDelete

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