Artwork Release fee

[peavey123]

Hi All, I am looking for some wisdom. Here's the situation.

I have a customer who I created a brand identity for and recently called me saying "I just bought Adobe illustrator, That's what you make my signs and flyers on right? Well, my assistant is going to learn how to use it and create my flyers etc. now. Can you send me a template of all my flyers, signs etc?" We've been doing about 10,000-20,000 flyers a month and I feel that once they get the template they will not be such a regular customer anymore as they've been shopping around on all quotes recently. Which brings me to the artwork release fee.

The customer understands and agreed to paying an artwork release fee, as it was outlined in the beginning of our working relationship. I'm just really not sure what to charge? I don't usually have to do this because the clients always come back. lol
Is the fee based on potential lost work because they will be getting their printing done at whoever the cheapest guy is in town, so that's a bunch of work lost? or do I just charge for the time to produce a template? or somewhere in between?

I could use some input from all you smarty pants.

 

[JJGraphics]

It's definitely a sticky situation you're in! As a business owner who also produces what he designs, I can commiserate with you on this one. Here are my thoughts:

1) Figure out what you're losing in profit and make sure the price you charge for the designs compensates for lost revenue. You may even want to go as far as telling the customer that the prices you charged for design took into account making money on the production end, so if the customer wants to take away that part of the transaction, then they're going to pay heavily for the artwork. Perhaps the customer doesn't realize that you make money both designing and in production?

2) Charge enough to be noticeable, but don't burn the relationship. We had a customer hire someone to do their "design" in house and he failed miserably at it and they fired him. Sure he could open photoshop and illustrator, but he couldn't figure out 'why' he should make one font larger than another, or 'why' he should change the colors/layout. The boss quickly realized that there's a reason he pays us for this stuff. He came back and the relationship has been good ever since. I DEFINITELY took a risk by giving him the artwork, and that time it paid off. Other times: not so much.

In my case, if I were 'only' designing, with no possibility to generate revenue through production, I would up my design fees by 200-400% (depending on if it's a creative type design, or a plug and chug type design) over what I charge now. That said, I'm willing to take one on the chin in the design department because we handle all print production in house, so we can make it up on the back end.

Hope that helps!
Justin

 

[rjssigns]

Not sure if this will help, but here goes. Wife and I sell photos through a managed website and pricing varies. The high-res unlimited license is the most expensive with tiny web ready images the least expensive.

Sounds like they want the "unlimited" deal so charge accordingly.

 

[Tim4]

If they walked through the door as a new customer today and wanted a quote for you to design the package that you have, what would you quote them?

That is the price and any profit from previous printing is a bonus.

 

[Dennis422]

If you charged them a design fee, theoretically the files are theirs. They have already paid you for your work.

BUT, if you have a "special" pricing that states "designing for internal" use only, and it states that if they want files released, they you could charge them.

I remember the discussion about this with my college professors, and that was the conclusion.
Yes, everyone wants to do all the work for their customers, but if you do not have a legal right to ask them to pay, might as well give them to them and hope that they will order more from you. If you try to charge them, and they do not like it, a few bad words spread around will cost you more that you will make with the release fee.
Plas, they will be done with you for sure.

Just my way of looking at the issue.

 

[genericname]

If you charged them a design fee, theoretically the files are theirs. They have already paid you for your work.

They paid for the time that went into the design, and the final product, not the blueprint. Any designer worth their salt states on contracts that designs remain the property of the designer, unless explicitly stated otherwise.

 

[TyrantDesigner]

This is a sticky area. I personally would figure out the man hours to generate a template based on their work (or templates) apply a margin to cover revisions if needed. then If they are going to jump ship when they get the files ... what would you normally charge for an IP release ... then charge double since you also are going to lose their printing as well. Also, keep in mind that any fonts you use for their work do not transfer to their system ... you paid for the rights to them to be used only by you ... they will have to obtain their own liscense for it ... same goes for raw stock art you have used ... check your liscenses ... 9 times out of 10 you will see a 'can not resell or distribute' clause in your design elements you have not created yourself. If you need to get it for them ... it costs time, so charge accordingly.

 

[peavey123]

Thanks Everyone. Although I'm still unsure what to charge because there are so many "what if's". Tis' a sticky situation indeed.

Like Justin said, what if I charge them a hefty artwork fee and then they decide illustrator is too difficult to use and come back? or what if they figure it out, then go to which ever printer is having a sale that month and we don't get anymore business from them at all?

Seems like their brand has really taken off. New office, more employees, personal assistants etc and they are getting cheaper by the day.

My gut tells me they'll figure out illustrator eventually and cut 90% of the printing they do with us. The customer tried this once where they gave us a go-ahead on printing 10,000 flyers. We get the job going and then they call saying. "So we just found a printer who will print the flyers for $xxx less than you. Is it too late to cancel our order?" Red flag right there yes it's too late! haha

The last thing is we've got I'd say around 10-15 customers (all have been small orders so far) come in because they liked the work we did for this customer. So now because of you all I'm paranoid if I charge too much it could impact our reputation? lol oh lawd.

Oh and just so everyone knows. I'm just the measly graphic designer here. I'm not the boss. My boss asked me to ask you all about this and come back to him. I'm not as nice as my boss business-wise. Which is why I don't own a business. In this situation I would probably charge quite a lot knowing the amount of business we could lose, but my boss is thinking like $100-150. As you've all pointed out, there are pro and cons to each. hm

 

[Dan Antonelli]

They paid for the time that went into the design, and the final product, not the blueprint. Any designer worth their salt states on contracts that designs remain the property of the designer, unless explicitly stated otherwise.

I disagree. We grant them rights to all the files used to create their artwork, and state they have ownership rights once paid in full. We're paid enough up front that I really don't see this as a problem. Plus, it helps alleviate any concerns they have about being 'locked in' with us, and ultimately helps sell the job in the first place.

Why not get what the job is really worth in the first place instead of attempting to hold artwork for ransom? I don't think anyone 'wins' in the end with that.

Just my two cents.

 

[Biker Scout]

BOO!!

The art belongs to the original designer. Period. (Actually, the company that pays the designer in this case, your boss)

They get usage rights, and you can dole them out accordingly. Unless expressly outlined at the beginning of the contract. Did they outright buy their logo? Because that right there is a whole other arena.

If they bought Illustrator... and have someone competent to use it, re-making the flyer should be a no-brainer. I can reproduce anything, as long as I can see it. (obviously they have printed flyers lying around to look at) Which they are more then welcome to do. But they can not have any original artwork file. END OF STORY.

You can settle the deal with them by offering them a usage license for their logo (up to 25,000 impressions, or they have to pay a royality) or fully licensed logo (unlimited usage), and give them at least the vector of that, and say "Good Luck". Oh, and if you guys find that producing your own flyers in house becomes too much of a hassle, we welcome you back with a 15% printing discount should you come back. Thanks!

 

[genericname]

Why not get what the job is really worth in the first place instead of attempting to hold artwork for ransom? I don't think anyone 'wins' in the end with that.

Super happy if that works for you. It's just not the default is all, and it shouldn't be assumed that the client gets anything but the end result. Also, by supplying the client with what they need only for specific projects, you're increasing the odds that they'll come back to you when they need something larger, with different parameters, or at a different resolution.

Your work's quality speaks for itself though Dan, and as such, I'd imagine your clients are a little more loyal than the average as it is. My apologies if that assumption's off.

 

[peavey123]

I disagree. We grant them rights to all the files used to create their artwork, and state they have ownership rights once paid in full. We're paid enough up front that I really don't see this as a problem. Plus, it helps alleviate any concerns they have about being 'locked in' with us, and ultimately helps sell the job in the first place.

Why not get what the job is really worth in the first place instead of attempting to hold artwork for ransom? I don't think anyone 'wins' in the end with that.

Just my two cents.

That makes complete sense. I guess where that gets tricky for some, like us. Is we also produce all the signage, do all the printing etc etc. So we've been stuck in this. "We'll handle everything for you." way of doing business. I really like your point though Dan. Thanks.

 

[jfiscus]

All you can really charge them for is for anything outside of the scope of previous artwork charges, or anything specifically stated in previous artwork contracts.
If it was left vague, then it is a real gray area and can be hard to deal with.

You can't charge someone for "potential future business", just think if the company somehow went bankrupt today and you never got another cent from them; you should have received any income from them that you were expecting prior to that point for any work done for them. Could you sue them for the "lost business" if that happened?

If you've done a lot of printing for them, then charge some fees for "artwork archiving, collection, conversion" and putting the artwork on a hard drive for them, and try to keep the relationship healthy during this time.
See if you can set up some templates at a set rate that their "newbie" designer will be able to work from easier.
See if they want to put you on a retainer as a "brand manager" for them to oversee their artwork and verify brand integrity before they have it printed (whether you print it or not).

Honestly, 10,000 - 20,000 flyers is a LOT of flyers anymore, be thankful they haven't gone to a digital medium and just went away entirely!

 

[Biker Scout]

Why not get what the job is really worth in the first place

Because most places would go out of business just waiting around for the right clients who are willing and able to pay. "Willing AND Able" are the key components, and are like unicorns to the rest of us mere mortals.

 

[player]

Are you giving them everything you have or are you going to make up some templates?

I would make up a few templates, charge that like a regular job and not give them everything you have ever done for them. It is reasonable of you not to give them everything. You guys make your living and they are going to take it away. Nowhere does it say you have to give them all the tools you have to do the job.

 

[Biker Scout]

Right, I'm going to ask my plumber if I can have his drain snake, since I saw a video on YouTube on how to clear my pipes. I paid him to do it once, and it was a lot. Certainly enough have paid for his tools, so I deserve them now. Then I'm going to ask my dentist if I can have a few of his drills, and maybe some gas. I'm pretty sure home dentistry is on the rise for the DIY crowd.

There is a complete lack of respect for designers in general. It's time you start demanding respect in your chosen profession. Which means being above reproach in all aspects and handling things in a professional manner from the gate.

 

[player]

If you did 3D CNC carving work for them and they said we are going to buy Artcam and source our own CNC machine, would you feel obliged to give them all the 3D models and tool path files?

 

[Dan Antonelli]

That makes complete sense. I guess where that gets tricky for some, like us. Is we also produce all the signage, do all the printing etc etc. So we've been stuck in this. "We'll handle everything for you." way of doing business. I really like your point though Dan. Thanks.

We do 95% of their printing as well (collateral wise, I mean, not signage). But I've always felt that we've been adequately paid for what the job is worth, they own it.

It's surprising that so many don't want to release art files. That's fine too, and I understand that positioning. From my vantage point, it's actually been a strategic advantage for us that we DO release files upon completion and payment since many agencies in our space don't. And it's interesting to me how many clients are specifically asking the question up front. So right off the bat, we put them at ease with our response.

Some of this goes back to what the actual deliverable is, how it's described, and what the client expectations are. Best thing you can do is have those conversations all upfront, and in writing, so there's no misunderstandings down the road.

What sucks in this scenario, and others which are similar, is that at the end, you now have a client presumably aggravated and feeling like they didn't get what they thought they had paid for. So all the good will, and opportunity for potential referrals goes out the door. After all the time you've invested in the relations, even if they walk, it would be nice to know you could still count on them for a referral. I'm sure you did great work for them too.

 

[shoresigns]

BOO!!

The art belongs to the original designer. Period. (Actually, the company that pays the designer in this case, your boss)

They get usage rights, and you can dole them out accordingly. Unless expressly outlined at the beginning of the contract. Did they outright buy their logo? Because that right there is a whole other arena.

If they bought Illustrator... and have someone competent to use it, re-making the flyer should be a no-brainer. I can reproduce anything, as long as I can see it. (obviously they have printed flyers lying around to look at) Which they are more then welcome to do. But they can not have any original artwork file. END OF STORY.

You can settle the deal with them by offering them a usage license for their logo (up to 25,000 impressions, or they have to pay a royality) or fully licensed logo (unlimited usage), and give them at least the vector of that, and say "Good Luck". Oh, and if you guys find that producing your own flyers in house becomes too much of a hassle, we welcome you back with a 15% printing discount should you come back. Thanks!

I'm aware that the art technically belongs to the designer legally if no contract was made stating otherwise, but I don't think the purpose of that law is so that you can hold hostage the designs that you've already been paid for. Could you explain with a real-life example of when a company would license their logo and not actually own it?

 

[Biker Scout]

There are several different overlapping realms of "Design" that aren't talked about or very apparent from the customer's point of view. There's the "Design Studio / Marketing Firm / Advertising Agency" style. Then on the other spectrum, there's "Sign / Print Shops" who also design and do pretty much the same things the other group does. Albeit, a lot cheaper and often times quicker.

Ask yourself, does my business have a counter or a conference/meeting room? I guarantee you that if your business has a counter, you are practically giving away design fees and solid work that could otherwise be more profitable to your bottom line and offer more of a "value" to your clients. You will also attract different set of clients as well. The counter approach is fine... just don't expect that your walk-ins or regulars are going to pay legit design consultation fees, retainers, sign contracts etc... they are going to throw some piddly cash at you, and you are going to work really fast and hard to meet their deadlines and expectations.

Yet, the business with a conference room is in control. Asks all the right questions, listens to their client's needs and lays out the best course of action that's in both parties benefits. Contracts are signed, hands are shook and work commences. With follow-up meetings and strategy sessions, synergy exchange, etc...

Perception IS Value.