If you’re like me, your eyes glaze over when people start talking about the word “licensing”. This word meant nothing to me earlier on and frankly just sounded like some business jargon that wasn’t all that interesting. But once I saw art licensing in action and realized its potential for me as an artist, let’s just say these little ears perked up, eye glaze be-gone! I’m here to give you a quick straightforward understanding of what it is and why you should care. (Anyone else’s Mom-brain hearing the Bluey episode where they keep repeating “aaaaand why should I care?” after reading this subject line too?? No, just me? OK cool…moving on lol).
If you’re completely unfamiliar with the term art licensing, the best way to think of it is essentially “renting” out your artwork for a specified amount of time (usually 2-3 yrs at a time), to be used by a company on their product that THEY manufacture, THEY stock the inventory for, THEY sell and THEY ship to stores to then sell to end consumers. The company that licensed your art then pays you recurring royalties for as long as they continue to sell any products featuring your design.
Greeting cards are my product of choice, as you likely know by now, and I sell all of my cards via this magical world of art licensing. So what this means for me is that I design artwork with the intention of it being used on cards. I then submit my ideas to the greeting card publisher I work with pitching my concepts for cards. They then let me know which designs they like and which they don’t. Sometimes they like the idea of one, but want several changes made. We may go back and forth several times on 1 card design until we land on something that works for them. Once they are happy with the art, I send them high resolution final digital files that they can then send off to the factories that manufacture their cards to be printed.
Card companies will typically print anywhere from 1000 - 10,000 pieces of 1 single card design (depending on how large the company is and how many stores they sell to). Once they’ve produced the final cards, they stock the inventory and sell these cards to stores. Some companies sell all over the U.S., others sell globally…it varies. For each one of my cards that is sold to a store, I will be paid a royalty on that card. A royalty is a percentage of the wholesale price of the card. The wholesale price is usually half of the retail price, and in greeting card land, a typical royalty percentage is 5-7% of the wholesale price. So for example, if a card retails for $5, the wholesale price would be $2.50. The royalty paid would then be 5-7% of that, or approximately $0.15 per card sold.
Now you may be thinking $0.15?? I only get $0.15 for all of my hard work? While that doesn’t sound like much, remember what I said earlier about how many pieces of a single card design a company will print to sell? (Hint: approx 1000-10,000 pcs). Now if you multiply that $0.15 by 1000-10,000 pcs sold you’re looking at $150-1500 for a single card design. BUT wait… there’s more! This is just for the initial print run. If a card sells well, it can remain in a company’s card line for years and years to come which means it will be re-printed many many times, and you will continue to be paid for all of those years. Are you starting to see the potential here? I encourage you to explore this wonderful world if you haven’t yet done so! Stay tuned for my post next week where I’ll really pull back the curtain and share some real life numbers on how much money I’ve actually earned from some of my own card designs!