I need some negotiation advice for product packaging.
A company contacted me about using one of my bird images on some bird feeder product packaging. They package two feeders per case, and have a little display panel between the two feeders that is about 2h x 7w inches. They want to use my bird image on one end of this little panel and want to place some text on the other like you would a business card. They move over 100,000 of these two-feeder cases per year. They also would like to use the image on sell sheets they send to out. I do not know how many sell sheets they produce. I have sent them that question. I have also asked them if this will be US only or also include outside the US. What would be a fair usage fee range for licensing an image like this?
Even though it is a small reproduction size, the image will be used on over 100,000 cases per year - plus an unknown number of sell sheets. I don't want to insult them with too high a price, at the same time I don't want to underprice the image. Assuming they net even $1 per unit, that is over $100K per year profit for them. I have no idea what their actual profit margin is on this product, but I have to think it is higher than $1 per unit. What would be an appropriate starting negotiation point without insulting them? What additional questions would you suggest I ask in order to better derive a proposed usage fee?
Thanks so much in advance for any guidance you can provide. Feel free to e-mail me to talk offline.
I'd be much less worried about you insulting them. If you quote a price that's too high, they won't be insulted, they'll simply move on to the next photographer. If your price is too low, they'll be happy to take advantage of you without saying anything more than "That sounds great".
On the otherhand, it's much more likely that if you asked what kind of budget they have in mind, that you'll be the one feeling insulted,
You can always sign up as a buyer at corbis or getty and price out their Rights Managed Images. I just checked on one of my agent sites, and with your paramaters for a 3 year license they were around the 1400 - 1600 range. Of course, I'm not telling you what to charge; you have to figure that out for yourself, and that goes for all you anti-trust lawyers as well.
Thanks Gary. With the help of you and some others, I was able to arrive at a fair number and have submitted my quote for consideration. I will let everyone know how it works out.
I think I was contacted by the same person about a cardinal pic, but she never got back to me on my quote. Must have scared her away, but a response would have been nice
Oh well, good luck!
Andrew - interesting they contacted you also. They must have perused PhotoPortfolios.net looking for cardinals. I spoke to them on Friday June 2nd and learned they received a couple of very low quotes. One was a one-year $250 quote and another was $800 two-year quote. I politely told them that with numbers like that I didn't see how anyone could make a living, and that those were most definitely not market rates. Oh well. At least I know I didn't compromise myself or my fellow professional peers by low-balling just to make a sale. I feel very good about that.
Andrew - interesting they contacted you also. They must have perused PhotoPortfolios.net looking for cardinals. I spoke to them on Friday June 2nd and learned they received a couple of very low quotes. One was a one-year $250 quote and another was $800 two-year quote. I politely told them that with numbers like that I didn't see how anyone could make a living, and that those were most definitely not market rates. Oh well. At least I know I didn't compromise myself or my fellow professional peers by low-balling just to make a sale. I feel very good about that.
Like you, I'm amazed and apalled that anyone would sell such rights at those prices. I just licensed several images for online publication (editorial, single use, full page), each for more than that lower quote. In that kind of environment I certainly won't put my client's name out so they can be targeted by the amateur discount shooters, and I certainly hope they don't hear about these rates.
Hey, I think I just coined a title for those folks: Amateur Discount Shooters. I like it a lot!
Good work Walter. We can only hope that as this site gets more use people will read and participate in the marketing forum so they may understand the folly of low balling prices for advertising/commercial work. Someone may be happy having $250, until they realize how much money was really left on the table.
However, just simply the way that supply and demand is with nature images these days is not encouraging. I made the decision the start of this year when working on my business plan to focus more time and energy away from stock sales and more time working on producing my own products for sale--whether that is photo essays, producing DVD's, print sales, book proposals, etc. The days of running a photo business based on a stock photo model ala John Shaw's Business of Nature Photography is long gone and I believe diversifying will be the key to success.
Also, the more diverse the income revenue is the easier it is to walk away from low balling bids. End result will be fewer sales but for a much higher average sale/photo so that just means more time to focus on better paying clients or better self publishing venues. Randy
Discussion
7 repliesI need some negotiation advice for product packaging.
A company contacted me about using one of my bird images on some bird feeder product packaging. They package two feeders per case, and have a little display panel between the two feeders that is about 2h x 7w inches. They want to use my bird image on one end of this little panel and want to place some text on the other like you would a business card. They move over 100,000 of these two-feeder cases per year. They also would like to use the image on sell sheets they send to out. I do not know how many sell sheets they produce. I have sent them that question. I have also asked them if this will be US only or also include outside the US. What would be a fair usage fee range for licensing an image like this?
Even though it is a small reproduction size, the image will be used on over 100,000 cases per year - plus an unknown number of sell sheets. I don't want to insult them with too high a price, at the same time I don't want to underprice the image. Assuming they net even $1 per unit, that is over $100K per year profit for them. I have no idea what their actual profit margin is on this product, but I have to think it is higher than $1 per unit. What would be an appropriate starting negotiation point without insulting them? What additional questions would you suggest I ask in order to better derive a proposed usage fee?
Thanks so much in advance for any guidance you can provide. Feel free to e-mail me to talk offline.
I'd be much less worried about you insulting them. If you quote a price that's too high, they won't be insulted, they'll simply move on to the next photographer. If your price is too low, they'll be happy to take advantage of you without saying anything more than "That sounds great".
On the otherhand, it's much more likely that if you asked what kind of budget they have in mind, that you'll be the one feeling insulted,
You can always sign up as a buyer at corbis or getty and price out their Rights Managed Images. I just checked on one of my agent sites, and with your paramaters for a 3 year license they were around the 1400 - 1600 range. Of course, I'm not telling you what to charge; you have to figure that out for yourself, and that goes for all you anti-trust lawyers as well.
Oh well, good luck!
Like you, I'm amazed and apalled that anyone would sell such rights at those prices. I just licensed several images for online publication (editorial, single use, full page), each for more than that lower quote. In that kind of environment I certainly won't put my client's name out so they can be targeted by the amateur discount shooters, and I certainly hope they don't hear about these rates.
Hey, I think I just coined a title for those folks: Amateur Discount Shooters. I like it a lot!
However, just simply the way that supply and demand is with nature images these days is not encouraging. I made the decision the start of this year when working on my business plan to focus more time and energy away from stock sales and more time working on producing my own products for sale--whether that is photo essays, producing DVD's, print sales, book proposals, etc. The days of running a photo business based on a stock photo model ala John Shaw's Business of Nature Photography is long gone and I believe diversifying will be the key to success.
Also, the more diverse the income revenue is the easier it is to walk away from low balling bids. End result will be fewer sales but for a much higher average sale/photo so that just means more time to focus on better paying clients or better self publishing venues. Randy