Design royalties and the minimum price for a pattern
At the beginning of 2022, we took a look at the statistics to see which topics take you to us. This post of design royalties and minimum price for a pattern is an oldie and goldie from August 2018. As it is still very much valid, we decided to lift it up once again. If you wish to discuss deeper this or any other topic, feel free to contact us!
As a design agency, Patternsfrom Agency approaches, and we get requests from all types of companies needing surface design services. The companies are big and small, startups and mature ones, operating in home textile and construction businesses, and absolutely everything in between. You name it, and we have it! To be able to work with a big variety of companies, we have put a lot of effort into equal pricing of the patterns for all these players. Our solution are design royalties combined with the minimum price for a pattern.
When determining the price for a pattern, the first thing is to know how you are going to use our pattern. Do you manufacture wallpaper or bed linen, or do you perhaps design entire interiors? That helps us to determine a sales unit, which may be a reel of wallpaper, a set of pillowcases, or the number of hotel rooms in which the pattern will be used.
Also, we need to know in which markets do you operate. Is your business local, are you operating globally, or perhaps something in between.
One of the main things to determine is also the level of exclusiveness: if you are going to use the pattern globally for paper products, are you OK to see the same pattern in home textiles or in fashion goods?
Last but not least, we need to determine the rate for the design royalties. Again, this depends on your business and your margins: the designers can not assume to get the same royalty rates from designing the carton of milk or the bedlinen, as the margins are very different in these product groups.
Having clarified these four points, we are ready to proceed with you, but the final price is still unknown. That depends entirely on your production volumes.
We have set minimum prices for licensing patterns with either global exclusive, semi-exclusive, or limited exclusive terms. The biggest difference in these terms is the geographical and product group coverage: with the global exclusive terms, you will be the only company globally to use the pattern during the term of the agreement whereas the limited exclusive term allows us to sell the same pattern also to other markets and product groups. The semi-exclusive term is something in between: you’ll get either one product group globally or all product groups for one market.
Before you receive the production-ready, color-separated, layered pdf files from us, you pay the minimum price of the pattern.
What if the pattern becomes a hit, and you wish to extend the agreement?
Fear not. Our aim is to design unique and good patterns, that last time, so you are not the first one to face this issue with us. You can extend the agreement with the design royalties for as long as you wish.
Besides the pattern data, you will receive the bio of the designer and her photo as a guarantee of the originality of the pattern. You can use those for marketing the final product. We are happy to help you to sell your products better.
Are you a designer and want to discuss pricing or some other topics to make your business bloom?
Book a time for one-to-one business coaching! We have been helping several designers both artistically and business-wise as they face challenges with developing their business. Fear not to contact us!