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Need help! offer to buy digital rights of illustration?

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Gosh, I need advice from someone.  I received an email from a local-ish business owner. (They're a legit business, I've checked).  They found an illustration on my website and she would like to "buy the digital rights to print as a small run product label"  This sounds great but I've mostly been focused on original art sales and illustration for publishing...I have no idea how to handle this.
If she buys the digital rights, does that mean I still retain the right to use the image in any capacity? I mainly want it for self- promotion, portfolio use.
How do I price something like this? My first instinct was to price it similar to the way I'd price the original watercolor since she will now own the image and be able to reproduce it as she wants... I guess I'm afraid of asking for too much? My smaller watercolors are priced around $200.
If anyone has advice or even a link to other information on selling the digital image of an illustration...you'd be my hero  :love5
#1 - September 02, 2017, 05:30 PM

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Digital rights are not printed rights, so I'm a bit confused. If she wants to use the image on a printed label, she's not buying digital rights. (Another illustrator may be able to help clarify this for me. I'm not an artist.)
#2 - September 02, 2017, 08:57 PM

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Rachel,
As a graphic designer I would purchase art and photography for my clients. Most of the time it would be stock art or I would draw something myself, so I don't have experience with something exactly like yours... but I thought I'd share a few ideas.

Ask about how many labels they will be printing, if they are considering a second print run, and if they will be doing advertising for the product that will include your image. "Small" to them might be 200, but it might 20,000. What I am thinking is that your price of $200 might be too high in the first instance and too low in the second. But for most cases it will probably be a good price, or a good place to start. (The place where I worked would sometimes flex a little on price to get the job.)

In general, with graphic design the client would have the rights to use the image, but the designer would still use the image for his or her portfolio and self-promotion.  An image I would create wouldn't get used again for a different client, making it different from stock art (keep in mind this is why your $200 price is fair, instead of $35 from istockphoto.com.)

Another thing that some artists do is put a timeframe on the image use, such as they can use the image for two years and then they have to pay again... this isn't the easiest way to go and might turn the client off from the deal.

Good luck,
Sarah
#3 - September 03, 2017, 04:48 AM
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Not an illustrator, but I'm somewhat familiar with this from photography: could you license use rather than selling rights? 
#4 - September 03, 2017, 05:32 AM

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What Sarah said. Digital rights are for use digitally only. A product label is for licensing in print. The rights you sell are based on the run of the print, the length of time the image will be used and the geographic area of the product distribution.
Ask them:
1. What the product is.
2. How many labels they plan on printing.
3. What the distribution of the product will be.
4. What promotional and advertising (this is probably going to include digital ads) plans they have for the product and if the image will appear in those places.
Since this is a piece already created, the price will be less than if they got something custom. The cost is based on how many and much of the above is planned. The higher the numbers or wider the distribution area, the greater the usage rights cost. In many product licensing deals, there is a per piece payment (much like a book royalty).

Another thing to ask is their budget. In my experience, a lot of smaller firms expect art to be cheap or free. If they have a budget that doesn't pay you fairly, don't agree to bad terms.

As a designer, I have charged between $300-$1000 for a logo mark. If they are using the word 'label' instead of 'logo mark' like they are using 'digital rights' instead of 'print rights', you need to sort that out as well.

If you can find a recent copy of the Graphic Artist Guild Pricing and Ethical Guidelines, you can read up on common terms, rights sold and pricing. The book also has sample contracts you can revise for your own use. https://www.amazon.com/Graphic-Artists-Handbook-Pricing-Guidelines/dp/0932102166/
#5 - September 03, 2017, 06:26 AM
« Last Edit: September 03, 2017, 06:29 AM by Wendy Martin »
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Thank you all for your advice. It was immensely helpful! This post is a re-write of something I posted a couple hours ago because the moderator took it down. Apparently I cannot quote what the business owner wrote me?  So here it is in my own words, the extent to which she wants to use the illustration:
1) Print 15 labels per week, no print advertising, would use product image on their website and social media
2) The business is a bakery and the illustration would be going on packaged granola
3) Their distribution is just local at this time. I know they do have other goods distributed state wide (VA)

I plan to get a copy of the Graphic Artist Guild Pricing and Ethical Guidelines from our library tomorrow. 

I did ask about her budget and she said she doesn't know because she has only purchased from Shutterstock before. I looked on Shutterstock and to get a commercial license for 2 images is $199, an editorial license for 2 images is $30.  I assume/hope she was purchasing a commercial license.  Does anyone have advice about pricing this?  It sounds like she'll be using the illustration in a fairly small scope.  I wonder if $200 is a bit high as Sarah mentioned?

Thank you again for all the advice! You've been awesome!
#6 - September 03, 2017, 09:33 PM

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