I was about to do work for the city of Las Vegas.
I have to forewarn you: This is a lengthy post and I’m going to be very transparent and go into incredible detail regarding pricing and licensing terms.
This is the kind of thing you get access to if you purchase the Learn Lettering Master Class. I’m going to show you how to actually make money with your hand lettering. This post will tell you how to avoid practically giving away tens of thousands of dollars of selling power without even realizing it.
This post is long, but if you’re serious about making money as an artist, do not skip it. If you’re in the mood for lighter reading you can go back and read the previous posts (I’ve been blogging daily for over a week now), but make sure you come back and read this one later.
So anyway, I was about to do work for the city of Las Vegas.
A firm reached out and asked me to do hand lettering for a B2B (business-to-business) campaign.
We are interested in having you complete some [hand lettering] illustrations.
We would like you to provide us two different estimates:
1. for 3 completed illustrations
2. for 5 completed illustrations
How many of you at this point would have immediately sent back a quote? I bet most of you.
How much would that quote have been be for? A few hundred? A few thousand?
I’m going to show you how this ended up being a 5-figure deal, but to do that, we need to roll back the clock.
Immersing Myself in the World of Licensing
Three months earlier (this was in 2012), I was researching and learning online, like I usually did, and I came across a website that talked about licensing artwork.
For some reason, this intrigued me. I became obsessed. I didn’t actually have any projects at the time that would have been able to utilize my newfound licensing knowledge, but I was consumed all the same.
I bought and devoured books, read articles, and watched videos on licensing. I got my hands on everything I could.
One book in particular I found was copyright 1995, so it was a bit outdated. It talked about the “world wide web” and CDs, but it gave such a wonderful overview of the core principles that it ended up being one of the most valuable resources for me.
I took the principles and terms from the book and adapted them for the modern age of the internet. I created a new template for myself in case I ever had a licensing job.
Little did I know that I would end up utilizing it not once, but three times the very next month.
It changed the whole way I approached client jobs.
The 5-Figure Client Project Conversation
Meanwhile in, Vegas… they’re still waiting for me to provide two quotes for the sets of 3 and 5 designs.
What did I come back with? Was it a quote?
No, it was more questions:
Thank you for getting in touch. Can you tell me about the intended application so I can price for the appropriate usage scenario(s)? I would be looking for medium examples, such as “Magazine and Print Advertisements,” “Online Promotions,” “Billboards,” etc.
I’m trying to get a sense for where and how the design is going to be used because it matters.
Is this design going to go on a single greeting card your client sends to their mom, or is it going to be mass-produced and re-sold on t-shirts and used in advertisements, and billboards?
Your design holds the selling power. Your hand lettering creates the appeal. Remember that.
Here’s what they came back with:
For each illustration we are looking for the below usage:
2 years from date of first insertion, exclusive, print and online only.
Look at that! They immediately snapped into business mode and used licensing terminology once I started speaking their language. They get this stuff.
Let’s break down what they’re talking about.
- 2 years from date of first insertion
- The design will be used for a two-year period. That period starts when the campaign begins (they’re just being clear so it couldn’t be construed that the two years started when the project starts.).
- They’re referring to exclusive rights here. A design can be licensed using exclusive or non-exclusive rights. If non-exclusive, that means I could also license the design to someone else!
- Obviously, for a business campaign, they certainly don’t want anyone else using these designs at the same time. They want exclusive rights.
- It’s important to note that this factors into the price. If the client had asked for options with exclusive vs. non-exclusive, exclusive would always be more expensive (I’ll explain why later).
- Print and online only
- This is where the designs will be used.
- Essentially, they have two years of exclusive rights to use the designs in print and online media.
Cool. This is what we’re looking for!
Providing the Quote
Let’s look at what I sent back:
Here is a brief summary of the quote. I will provide it in greater detail once the decision has been made to move forward:
- Design Rates
- Set of 3 Designs
- $1,200 each
- Set of 5 Designs
- $1,000 each
- Usage Rates
- Summarized terms:
- The Client is given the exclusive, non-transferable and non-assignable use of the artwork for the purpose of application in promotional materials in all print and online media.
- Rate for Above Scenario:
- $1,500 per design for the period of 1 year
- $3,000 per design for the period of 2 years
Ok, there’s a lot going on here. First of all, I want to point out that this is not by any means the contract. In fact, as I talked about in this recent podcast on attracting clients, you always want to explain your terms personally to the client and not only send a big legal document.
Explaining the Terms in Plain English
Never just send over an attached PDF contract and expect the client to read through and understand all of the terms. You should also explain it to them personally in an email or over the phone.
Imagine your friend comes over to your house and says, “Hey, what are you working on there?” You reply, “Oh, it’s a contract for a client project I’m working on.” When your friend asks, “What does it entail?” think of how you’d reply to your friend.
You’d break it down, but you’d also simplify it. You wouldn’t just say, “Here, read the terms.” You’d say, “Oh, they want to use my design in print and online media, so the terms basically say they have exclusive rights to do so for a period of two years from when their campaign starts.”
That’s what I’m doing in this email.
Let’s dissect the first part of my reply. Note that I break up the quote into two parts: Design Rates and Usage Rights.
The client is paying for two separate things here.
To make this very clear, let’s say another client commissioned me for a design in the past. We’ll call it Design X. That client commissioned the creation of the design and also licensed it for a year. That term has ended, but I still own the rights.
Now, if a new client wants to use Design X in their project for two years, what would they pay? They pay Usage Rights.
However, with our current client, they want to use a design that doesn’t yet exist. In other words, they need to commission me to create the design they want in the first place! This is why there is a Design Rate. They’re paying to commission me for the creation of the design, and they’re also paying me to use the design in their campaigns.
So in this case, I’m quoting a rate of $1,200 per design if we are doing three ($3,600 total), or $1,000 per design if we are doing five ($5,000 total). Basically, I was creating incentive such that if they do more, it’s more cost effective on a per-design basis.
For the usage period, the client requested two years. I provided options for either one or two-year durations. The two-year option didn’t have a cheaper rate than the one-year, but I wanted them to know that there wasn’t a minimum duration and we could still do just one year if they wanted.
Thanks for the numbers!
Are we safe to assume a usage fee of $2250 for 18 months? I believe the client may only require that length of time.
They wanted to do a year and a half. No problem.
There was a phone call and a couple more emails discussing deadlines and preliminary details, but after a couple weeks, things were finalized.
Five Designs, Five Figures
They decided to commission all five designs. That meant a design rate of $1,000 each according to my proposal.
Usage rates of a design for 18 months in print and online media was quoted at $2,250 each. That gets multiplied by five designs.
They sent over a purchase order.
Purchase Order Total: $16,250.00
Mistakes Were Made
I’ll be totally transparent with you: I didn’t do everything perfectly. I learned a lot during this project.
One of my biggest mistakes was starting without content. As you’ve heard me talk about in 10 Mistakes You’re Making With Clients That Cost You, the client is responsible for two things: Content & Goals. You design content. You must have content first in order to design!
I made a mistake. It was a mistake that caused what should have been a three-month project to stretch into six months. That mistake was allowing the project to start before the client had all of the content.
They told me they had what we needed for the first couple designs and that they would get me the finalized content later. Unfortunately, repeated delays cause the project to span half a year instead of three months.
I should have required all the content up front before starting. This would have prevented the project delays.
But you live and you learn! All in all, it was still a great project.
You Hold the Selling Power
Most designers don’t understand the selling power of hand lettering and full ownership of rights. Typically, designers sell the full rights to their work without even thinking about it. Often for mere hundreds of dollars.
But when you understand how licensing and usage rights work, you being to realize the true value of your designs. That project I share with you above resulted in making five figures and I still retain full ownership of the design!
This is why if someone wants to buy the design outright, you need to seriously think about what that means. It means they can do whatever they want with it. If they’re a large company that is going to be reselling your design on tens of thousands of shirts and making hundreds of thousands in profits, why are you giving all of those rights away?
Selling ownership is like selling your soul.
You need to take this very seriously.
If you’re going to sell ownership, the price needs to reflect all potential selling power and profits you’re giving to this client.
Plain, Tin Lunch Boxes
Ever see a kid freak out over a plain, metal lunch box and beg his mom to buy it? Me either.
Kids want cool designs. They are drawn to creative art. They react to cartoon characters they recognize. Those are the lunch boxes they want.
Design holds the selling power. Your art is what moves products!
Pieces of the Value Pie
Think of all the factors you control when it comes to usage rights:
- What products? (lunch boxes, t-shirts, posters)
- Where will they be sold? (location or region)
- When will they’ll be allowed to sell? (at what time)
- For how long? (duration of usage rights)
- At what rate? (price, profit margin)
- Non-exclusive or exclusive? (can only this person sell or can others?)
You need to think of every single one of these factors as a piece of the value pie. The whole pie is your ownership of the rights.
Let’s say the pie represents the value of Design X. Look at just a few of the many different things you could do with the full ownership of this pie:
- You could allow someone to sell lunch boxes with Design X in China for 1 year.
- You could allow someone to sell lunch boxes with Design X in the United States for 1 year.
- You could allow someone to sell t-shirts with Design X in China for 1 year.
All of the above would be permissible given that the exclusivity you offered the client pertained to the location.
But what happens when the client wants more exclusive rights?
Exclusive vs. Non-Exclusive Rights
Let’s say you offered licensing rights to a client to sell lunch boxes with Design X in China for 1 year at a flat rate of $1,000 (just to keep this simple). If the rights were non-exclusive, that means you could also offer another client licensing rights to sell lunch boxes with Design X in China for 1 year and make another $1,000.
However, if the client wants exclusive rights to use Design X on lunch boxes, you would not be able to license it to anyone else. That means there’s is decreased revenue potential for you, but increased exclusivity and revenue potential for the client given that they are the only one who is allowed to sell this design in their region.
That means the price of exclusive usage rights should go up.
Instead of $1,000, you might charge $3,000 or $5,000.
Now, just because you’re giving them exclusive rights to use Design X on lunch boxes, doesn’t mean you can’t license the design to a different client who sells other products. Bear with me—this is where it gets good!
So you could very well sell licensing rights to a different client to sell t-shirts with Design X in China for 1 year!
This is revenue potential for you. You could sell other exclusive or non-exclusive usage rights to various clients for t-shirts, backpacks, USB flash drives, magazine ads, etc. It’s important that you understand the revenue potential here. Each of those deals is a potential $1,000–$5,000 extra in our particular example.
The Client Wants to Buy Out the Rights
But let’s say the client isn’t happy even with exclusive rights just for lunch boxes. They don’t want anyone else using Design X for anything at all. In other words, they want exclusive design rights such that you could not license the design to anyone for anything—including t-shirts, posters, stickers, wall art, other lunch boxes, etc.
This is the most critical point of the entire post and why I have meticulously set the stage to explain in detail why this is important, so pay close attention here.
When you consider all of the various usage cases in which you could license your design, you begin to understand that when a client is wanting to buy out exclusive rights and ownership completely they are wanting to acquire thousands if not tens of thousands of dollars of selling power.
Yet, almost every designer I know transfers the full rights of their design every single time for mere hundreds.
Now when I look back to that three-month period of my life where I immersed myself in the world of licensing and learned everything I could, I see just how invaluable that investment was.
Could I Ever Do That?
At this point, there’s likely two kinds of reactions happening right now. The seasoned letterers might be getting upset at this point because they look at the work I did in 2012 and they’re thinking, “I could totally do way better than that.”
I have no doubt that you could. I know you’re talented. But how do you feel about work you did three years ago? You don’t think I cringe looking at work I did three years ago and think about how I could have done better? Of course I see all the flaws now.
But that doesn’t matter. The point is I knew how to conduct business. The point is it was valuable to the client and their campaign. It’s a business-to-business campaign. What do you think they made in revenue by putting out this ad with eye-catching designs in business magazines? They’re getting business owners to decide to go ahead and book a meeting in Las Vegas for themselves and 20 of their employees! Likely hundreds of business owners (if not more) booked events because of this campaign.
Businesses know how to spend money to make money. I guarantee the amount they made was a lot more than what they paid me. That’s why they didn’t even blink.
The other reaction might be from the beginners who are probably thinking, “This is crazy. I don’t know if I could ever do this.” Well first of all, if you made it this far into the article, you absolutely have what it takes! Do you know how many people saw this post and said, “Nope! Too complicated for me!” You have what it takes, and I’m going to show you how to do it.
If you just want to learn lettering as a hobby and maybe make a few hundred bucks from clients every once in awhile on the side, that’s totally cool. The Learn Lettering Starter Class will be 100% free and it will get you started on your way to doing that.
But if you want to get serious and harness the true selling power of your hand lettering, the Learn Lettering Master Class takes a deep dive on this and many other topics pertaining to hand lettering as a business.
We cover things such as pricing, client communication, design contracts, licensing, selling original artworks and more.
You’ll make back your investment on the very first job and you won’t find this kind of unique education that combines artistic training and business acumen in one place anywhere else.
It Takes Time to Learn This Stuff
If the length of this post is any indication, you’ll know that this isn’t easy stuff! It’s not simple and it takes time to understand and internalize and comprehend.
If you’re feeling overwhelmed, don’t be. It took me years to learn all of this. My goal in the Learn Lettering Master Class is to break this down for you formulaically and provide convenient templates, guides, and instruction that will significantly speed up the process for you and remove a lot of the headache.
You don’t have to worry about figuring out what works. I’ve done that for you and walk you through everything step-by-step.
Ultimately, being able to harness the selling power of hand lettering comes from a combination of having excellent work, understanding the terms and principles of design contracts and licensing, and being able to present and articulate these concepts confidently to the client.
I want you to know that it is possible to make a living as a hand lettering artist and I aim to show you how.
I hope you found this insightful and that my transparency and willingness to share real numbers was helpful.