Royalties: The key to your sales success
by Sara S.
Our daily work and collaboration with designers from all over the world, allows us to know what worries you as professionals. It allows us to know what matters to you and, above all, it allows us to improve in order to adapt Faberin to you, to your designs and to your concerns and goals.
One of the key aspects for any professional is to feel that their work is being valued in a fair and updated way. For this reason and because we have been able to perceive the uncertainty around the world of royalties, we want to dedicate a post to tell you all about them and about the novel process of royalty fixing in Faberin.
What are royalties?
Royalties are the money that a designer receives for the exploitation of his design, that is, the percentage of money that a designer receives for each unit sold of his design.
The designer will be entitled to receive royalties while the company or platform uses his design. It will be the company or platform responsible for collecting all revenues arising from the sale of the final products.
The designer will be entitled to receive a royalty payment (“royalty right”) equal to the amount previously agreed with him in his contract.
What does a designer have to take into account when negotiating his royalties?
If you’re a designer, you’d like to know what the royalty rate is. As we have seen, as a general rule, the figure of royalties ranges between 10% and 25% of the final price of the product.
Also, you have to know that royalties depend on sales, that is, setting or negotiating a high percentage of royalties will not guarantee you a high income.
How is the process of fixing Royalties in Faberin?
One of Faberin’s main challenges is the removal of any barrier between the designer and the market , to facilitate the creation and sale of quality products.
Unlike other types of collaborations or business forms, we offer an updated option adapted to the market, in which the benefited user, the designer, does not have to incur any cost. We provide guidance on the design process and manage the entire manufacturing and distribution process with our network of professional makers.
In addition, another novelty that you will find in Faberin is that you will decide how much royalties you want to earn for each unit sold. It is not us, as a platform, who impose this percentage or figure. But to set this amount, you must think strategically about what is best for you and your designs. That’s why we want to give you some tips to make you feel safe when fixing the royalties of your design.
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Tips for fixing Royalties on Faberin
- Your royalty figure will affect the final price of the product, so putting an unadjusted or unrealistic figure can make your design a non-competitive product.
- A price is a key tool in any marketing strategy. It will be part of the value proposition you provide, so it has to be in balance with what your design provides. Component of design, functionality, history, images… Everything counts.
- Analyze the competition, to estimate what price range your design could have in the market.
Take into account the data we gave you at the beginning, generally, the percentage of royalties of the designer is between 10% and 25% of the cost of the product.
As we want you to feel safe and comfortable with this figure at all times, at Faberin, we give you the chance to readjust it when you get the manufacturing budget and thus, the final price that your product will have. Thus, you can set an approximate figure when you upload your design to Faberin and as soon as your design receives a quote we will notify you so that you can review your royalty figure and adjust it according to your preferences, what do you think?
Words by Sara S.