Art Licensing Insights
Topics and Collections
My beloved designs are now available globally on a variety of products and consistently top sellers. Here, I discuss some of the aspects that I feel have most greatly impacted my ability to create a flourishing art licensing business.
Licensing can seem overwhelming; there are so many questions! How much do you charge? How do you get buyers?
It takes time, patience, and learning. I first became interested in pattern design in high school, which led me to study textile design in college. After college, I worked for 10 years as a designer in home decor, stationery, and fashion, for products sold through household name retailers, and eventually started my own business in art licensing. This was my path but there are so many different ways that artists come into surface pattern design and art licensing.
HOW
Before becoming an independent designer, I thought about the idea of licensing my artwork and having my own business, but I honestly didn’t know how.
Soon after the POD (print on demand) market was born in 2010, I saw colleagues using Spoonflower, Society6, and Zazzle, and I was able to create a vision for my future business.
MARKETING + EXPOSURE
Gaining visibility to engage with prospective clients and build licensing partnerships is vital. Here is how art licensing leads can happen:
・EMAIL Start small with an email newsletter monthly or quarterly.
・BLOG Tell your story! Speak to your customers, clients, and partners. Write about what matters to you.
・SOCIAL MEDIA It’s a no-brainer to create a presence on social media where people already spend lots of time. Connect and stay in touch with your audience. Follow inspirational artists, customers, or companies. Follow artists, hashtags, brands, and other sources of inspiration.
・COMMUNITY Go to: Trade shows, networking events, and join artist groups
・WEBSITE Connect your site to all your channels and create a space that truly communicates your brand.
・ART AGENTS can be great to partner with a well-matched agent; you might get more licensing deals, so paying the varying commission can make sense.
・POD can add visibility and exposure that fosters additional leads and gets your name out there.
Connect and stay in touch with your audience. Follow a mix of inspirational artists, customers, companies or organizations that have meaning to your art brand. All of these connections have the potential to lead to licensing opportunities!
PRICING
The million-dollar question. What do you charge?
There’s no empirical answer to this question, so instead, I’ll provide context from my experience working for other companies for 10 years with buying artwork, and my own practices that help me with pricing. With practice, you’ll gain confidence in your ability to propose fair competitive pricing.
POD pricing
5-15% royalty on retail price is common. Most POD platforms typically offer a 10% royalty on the retail price of the products. Sometimes it’s a fixed amount, such as a dollar amount per unit sold, and those commissions can be subject to promotions, discounts, etc., depending on the platform's Terms and Conditions (T+C).
Buyout Pricing
Not licensing, but helpful to understand the context of value or expectation by buyers of artwork. Many companies prefer buyouts to use the art how they please for as long as they want. Here are figures for purchased artwork by companies that I worked with, from 2005-2015, for art brokered through art agencies, with a collection of mostly anonymous artists. There were agencies specializing in either fashion or home decor. This pricing is for artwork with copyrights that convey on purchase, which means that the ownership rights transfer with purchase to the buyer, and so this is not a licensing deal; it is a buyout.
The average range for files that were high-res, color-separated, or vector art:
$400-$600 for fashion prints
$800-$1200 for rug art
$500-$800 for wallpaper art
Additional context for Buyouts
Stationery is smaller-scale dimensions and illustration-heavy with typography and hero design, and lighter pattern design, but with collections can be helpful to close a deal if there are supporting designs that can be used for liners, and other contributing applications. There is probably slightly more vector art, but there is still a good amount of watercolor also.
Fashion prints are small to medium scale and require a more diverse approach with a focus on more trend-forward content, and can often help to include sister prints that showcase a breadth of concept, with some designs being more tightly spaced and others being more spaced out.
Home decor is typically large-scale, dimensional artwork, and typical to find pattern designers skilled with woven construction, which helps with designing for home decor applications where the texture is a consideration, unless it is printed bedding.
Licensing Pricing
I have been fortunate enough to have companies pitch to me. I license my designs but retain all ownership in any art that I create. I market my art, which allows me to gauge what is popular with my artwork, and most inquiries are to use published designs that I’ve marketed.
I no longer give up the ownership rights when I do custom design work. The length of the license term is based on the typical life cycle of the product, usually a few years with the option to renew. I also offer exclusive licenses that are category-specific or non-exclusive licenses with flexible terms.
Most small companies that I have licensed prefer a flat annual licensing fee. I price licensing fees similarly to if they were paying royalties, but in one annual fee. For renewals, I base pricing on production and factor in the sales that were made over the term.
If you license to a national retailer selling thousands of products to hundreds of stores, it will be single-digit royalties; the terms are often important to look closely at, especially if the offer is royalty on wholesale rather than retail, and it’s important to check the terms on cost deductions.
Large retailers might offer lower royalties along with an advance (a non-refundable deposit that is applied to future royalties). If they sell products, the advance is deducted from the royalties, and they pay the additional royalties due.
It may not seem fun to look at the fine print, but it's more important than anything to make sure you are getting a fair deal.
Good Questions to Ask
The best tools in terms of pricing are asking the right questions to decide if it’s a good partnership for you.
One of the best parts of being a licensing artist is being able to choose your business partners. Here are some questions that help me determine if I will offer a license or assist with pricing.
What is the budget?
Which designs are of interest?
How will they use the design?
What is the retail price?
How much product or yardage will be made?
How long do they want to use the design?
Do they want exclusivity?
Additional Pricing Resources
Negotiations
When it comes to art licensing, my gut feeling is that a lot of artists don’t negotiate. If this is true, this is a lost opportunity. In any other business, negotiations are a core element, and why should the business of art be different?
With one particular license, I counter-offered 4X the initial amount offered, and the company accepted! The truth is, I didn’t arbitrarily come up with that number. I based it on the quantity of products and what seemed fair.
Contracts
You absolutely need to have a contract to license art. Even if you start with something more basic, it's important. I recommend having a lawyer draft a contract, but here is a sample to see what is often included in a licensing contract.
Graphic Artists Guild Handbook is an incredible resource that also has sample contracts for a variety of purposes. That book elaborates better than I can on pricing based on industry standards that are based on real data.
That covers the essential aspects of art licensing. If you have questions, feel free to reach out and ask.
©Crystal Walen