The Business of Patterns: Licensing & Pricing | Mel Armstrong | Skillshare

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The Business of Patterns: Licensing & Pricing

teacher avatar Mel Armstrong, Illustrator, Pattern Addict & Teacher

Watch this class and thousands more

Get unlimited access to every class
Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Watch this class and thousands more

Get unlimited access to every class
Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Lessons in This Class

    • 1.

      Welcome

      2:41

    • 2.

      What is Art Licensing

      3:58

    • 3.

      Client Research and Pitch Strategy

      6:30

    • 4.

      Client Analysis

      10:46

    • 5.

      Pricing Strategies for licensing

      10:15

    • 6.

      Demystifying Basic Contracts

      5:02

    • 7.

      Pitch Perfect Portfolio

      5:53

    • 8.

      Conclusion

      1:57

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About This Class

The Business of Patterns: Art Licensing & Pricing

Stop guessing your worth and start building a sustainable design career.

Do you love creating art & patterns but feel paralysed the moment a client asks, "What’s your rate?" Many talented designers leave thousands of dollars on the table because the "business side" of art feels like a foreign language. If you’ve ever been confused by contract jargon, worried about undercharging, or felt unsure how to pitch your work, this class was built for you.

I've had over 12 years of experience licensing for international brands in stationery, fabric, and home decor. In this fluff-free, actionable course, I pull back the curtain on the industry to show you exactly how to value your work and protect your creative rights.

What You’ll Learn:

  • The Language of Licensing: Master the roles of Licensor vs. Licensee and understand the difference between Flat Fees, Royalties, and Advances.

  • The 4 Levers of Pricing: Learn the secret formula for calculating any deal based on Term, Territory, Usage and Units

  • Building a Pitch-Perfect Portfolio: Shift from a "gallery" mindset to a "sales" mindset by creating professional Sales Sheets that Art Directors love.

  • The Sustainability Factor: Discover how to factor in your cost of living and overhead to ensure your business is actually profitable.

  • Calculating Your MVP: Define your "Minimum Viable Price" so you never say "yes" to a bad deal again.

  • Tiered Pricing Strategies: Learn how to present "Low, Mid, and High" value options to give your clients choices while keeping you in control.

The Project: Your Business Blueprint

You won't just watch videos - you’ll build your business. By the end of this class, you will have a ready-to-use Business Blueprint including:

  1. An Ideal Partner Analysis: A strategic deep-dive into a brand you want to work with.

  2. A Personalised Pricing Calculator: A custom spreadsheet that tells you exactly what to charge for every scenario.

Who This Class Is For:

Whether you are a student looking to make your first sale, a freelancer tired of low-paying "buyouts," or an established artist or surface pattern designer looking to streamline your professional process, this course will give you the confidence to sign contracts with total peace of mind.

Resources:

There are a number of PDF downloads with this class including a 30 day Licensing Action Plan which you can implement after you complete the class.  I also highly recommend The Graphic Artists Guild Handbook Pricing and Ethical Guidelines*, which I proudly was an advisor for for the Surface Pattern Design sections on pricing.  

Turn your passion for patterns into a professional powerhouse. 

Stay Connected:

*This is an affiliate link, so I will earn a small commission if you go on to purchase it.  I only recommend products that I love and use myself. 

Meet Your Teacher

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Mel Armstrong

Illustrator, Pattern Addict & Teacher

Top Teacher

Hello and greetings!

I'm a dedicated illustrator and surface pattern designer hailing from Wellington, New Zealand. My passion lies in crafting beauty, whether it's through illustration, patterns, sewing, or even assembling IKEA flat packs (yes, really).

Driven by an insatiable thirst for knowledge, I found my way to Skillshare. After discovering this treasure trove of learning, I not only delved into various classes but also found my... See full profile

Level: Intermediate

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Transcripts

1. Welcome: Hey, everyone. I'm Mel Armstrong, and welcome to the business of patterns, licensing and pricing. I've spent the last 12 years designing and licensing patterns for everything from stationery and fabric to wallpaper. If you're anything like I was when I first started, you absolutely love the creative process. But the second, the conversation shifts to contracts, pricing or negotiations. You freeze up. There is often this huge emotional gap between creating beautiful art and actually selling the rights to it. That gap is where so many talented designers and artists leave money on the table, whether it's by accepting low fees, confusing exposure with payment, or just feeling too nervous to ask what their work is truly worth. Well, we are going to close that gap together. By the end of this class, you'll feel like more than just an artist. You'll be a confident, creative entrepreneur. You'll walk away with a clear plan for calculating your value, a strategy for reaching your dream clients, and the foundational knowledge to make your business safe and profitable. Your class project for this class is your business blueprint. It isn't just homework. It's actually going to be a real world deliverable. You're going to create your own business blueprint in two parts. Firstly, you'll define your ideal client. We'll use my custom worksheet to identify a specific company you want to work with and you'll find the gaps in their current line that your art can fill. And secondly, you've got to create a pricing tear sheet. This is where you'll build a personal spreadsheet with three pricing scenarios, a low mid and a high value. Giving you instant calculator numbers you can use the next time an inquiry hits your inbox. I know the business side of art can feel a little daunting, but I promise it doesn't have to be a mystery. Once you understand the mechanics of how licensing actually works, it stops being scary and starts being empowering. It gives you the freedom to focus on what you love most creating. So if you're ready to stop guessing your worth and start building a sustainable career with your art, let's dive in. I'll see you in the first lesson. But 2. What is Art Licensing: Hi, everyone, and welcome to the very first lesson. Before we dive into the beautiful world of patterns, we need to talk about the engine that makes this a business, and that is licensing. So what is licensing? You can think of licensing like renting out an apartment. You own the building, your artwork, but you're giving someone else the keys to live there for a little while in exchange for rent. You don't lose the building, you just profit from it. So to get started, we need to learn how to speak the business. So let's break down the three most important pillars of licensing language. First up, let's identify the players in the game. So you are the licensee. You hold the copyright. You are the creator and the owner. And when you license your work, you aren't selling the art itself, you are granting permission for someone else to use it. And then you have the company, and they are the licensee. This is the brand or manufacturer paying you for the right to put your gorgeous patterns on their products for a set amount of time. Now, there are three ways the rent gets paid in this industry. So you could have a flat fee or a buyout. And this is where there is a one time payment. You get the payment upfront, and that's it. Regardless of whether they sell ten items or 10,000, you just get that one payment, and you often also lose your copyright. Second one is my favorite, and that is a licensing fee or advance. And this is a middle ground. The company pays you a flat fee to use the art, but you keep the copyright. Now, sometimes this can be also an advanced against royalties, meaning they will pay you, say, $1,000 now, and then once a product sells enough to cover that $1,000, you start earning extra royalties on top. This is a really great way to ensure you get paid for your work today while still participating in the success of the product tomorrow. So this is probably my favorite way because you can get both the upfront fee and the royalties going on. Then you also have just the royalties. So this is a percentage of sales, either net or gross with no upfront payment. If the product sells well, you get paid continuously. And this is kind of pure passive income. Oh, it does mean waiting until the product is actually in stores to see your first payment. Now, this is the part you want to highlight in your notes. Every single licensing agreement is built on four levers. If a company asks for a price, you can't answer them until you know where these levers are set. So the first one is term, and that is how long can they use the art for. So is that two years or is it forever? Second one is territory. So where in the world can they sell it? For example, is it just in the UK or is it worldwide? And then three is usage or scope, and that is what are they putting it on? For example, is it just teats versus the entire home decor line? And then finally units. And that is how many units of the product will be produced. A run of 50 is worth a lot less than a run of 50,000. And then the golden rule, the broader the lever, the higher the price. If they want it forever, everywhere on everything, and they are printing thousands upon thousands of then that's gonna cost a lot more than a one year deal for a single greeting card in North America that are only printing, say, a couple of hundred. So understanding these levers is the secret to never being underpaid again. Alright, that is the foundation. In the next lesson, we are going to stop cold emailing into the void and start strategically defining your ideal client. So I will see you there. 3. Client Research and Pitch Strategy: Welcome to Lesson two. This lesson is about choosing your direction. We are moving away from the spray and pray approach, sending your portfolio to every company on the planet and moving towards a sharp, strategic pitch. We want to be a solution, not just a suggestion. So the first step is to stop thinking broadly and start thinking narrowly. You can't license patterns for everything. So you need to identify where your patterns lend themselves to. So once you identify your core industries, you can then start analyzing their specific trends. Soft pastels dominating the bedding market for spring, bold geometrics making a comeback in wallpaper. So tailoring your work to these shifts is how you show a company you are paying attention and that your art is marketable, not just pretty. So here are a few categories that you could look into. So you've got the juvenile or kids. So look at specific colors and subjects for bedding or apparel. Then you've got stationary and paper goods. So sophisticated small scale prints for greeting cards or notebooks, the home decor or textiles industry where you could use large scale repeating patterns for curtains or upholstery. And then there's a fabric and quilting market where collections tell a story. So if you work in collections, then this is probably a good market for you. So now for the fun part, you get to become a detective, and this is where you select your ideal licensing partner for your class project. So I want you to pick just one company that you would love to work with and then perform a brand analysis. So for this, I don't want you to just look at the brand's website. I want you to analyze it. So look at the style, palette, and scale. So what colors do they use? Are their prints dett or graphic, and look at their current product line. Also, look at seasonality. Are they just focused on Christmas or back to school or all year round designs. And then also look at their pricing tear. Are they mass market like Target or Walmart, or are they high end luxury so you're more boutique retailers. You work should align with their price point. So what you need to do is find the gap, and this is the most crucial skill in licensing. Most designers pitch what they have. And what I believe is a great way to get clients is to pitch what the client needs. Have a look at their current collections. What is missing? Do they have florals but no geometrics? Do they have bright colors but lack deep, moody jewel tones? Look at it from the art director's perspective. An art director's job is to fill their product calendar. If you can show them a gap in there, say, called a three line that your collection perfectly fills, you've instantly moved from being just a random submission to being a valuable asset. So use the ideal client research worksheet, which is available for you to download to guide you in this analysis of your brand or company. Next, you need to be able to find the right contact so a great portfolio sent to a generic email address is a wasted effort. You really do need to try and find a specific human who makes the art decisions. So your target, this is usually the art director or creative director, or if it's a small company, then even the owner or the head of product development is the person that you're looking for. So how do you find them? Well, LinkedIn is a very good tool for this. So you could search the company and then filter through all the job titles. This often provides you with a direct name and often shows you the previous work just to give you some context. You can also look at company websites and about pages. Sometimes the team is listed directly. Social media, you could send a quick DM on social media and just ask who the right contact is for sending a portfolio. So when you connect, you need to ensure that your approach is authentic, so no copying and pasting generic messages to different companies. Create something that is specific. So maybe reference a specific collection of theirs that you admire before mentioning your own work. And then your pitch email, this needs to be short, relevant and actionable. Art directors are very busy people, and you have to grab their attention in seconds. There are three essential components to your pitch email. First up is brevity. So keep it under five sentences and get straight to the point. Next is relevance. So immediately mention why you are contacting them. For example, you could say, I love how your something product line incorporates this specific style element. I have a collection that aligns perfectly with your upcoming autumn launch theme. And also, you need to include a clear quarter action, and with a simple request. Don't attach your entire portfolio, offer to send a link to a private viewing gallery or ask, Are you currently open to reviewing new pattern collections for 2026? Some subject lines that work. So try to avoid something like my portfolio for your review and try something different like maybe pattern collection review and put in the name of your collection for Autumn 2026, which makes it quite specific or surface pattern designer pitch with your name and the client product that you want to focus on. Also, always link to a professional private online portfolio or lookbook. Never attach high resolution files to a cold email that's really unprofessional and might even get flagged as spam, so it might not even get to the art director. So in the next lesson, we're going to dive deeper into analyzing a client for pitching. So this is where the real work happens. See you there. 4. Client Analysis: Analyzing a brand before pitching is often the hardest part because it requires shifting from a creative mindset to a strategic market driven mindset. So in this lesson today, I'm going to show you a detailed breakdown and examples of how you could analyze a brand. And in this case, it's going to be a children's fashion brand. So let's jump in. So it's not enough just to look at their products. You need to look at their strategy. Here are three key areas to analyze when you're looking at a brand's website and social media. Color palette. So look at the past three to four collections and ask yourself, are the colors saturated and bright, for example, primary red or cobalt blue, or are they muted and earthy, for example, dusty rose or sage green. Also identify their corn neutral. So, for example, an off white, an oat, or a gray. Then look at their pattern style. So focus on the non photographic prints. Are they painterly and whimsical, simple and graphic, like basic geometrics? Are the motifs large and loose or small and detailed? And do they use linework? Then look at the pattern scale. So look at the patterns on the garment. Are the patterns generally small and dense for, say, baby clothes, or are they large, isolated and bold for older kids items? And finally, what is the vibe or the mood? What emotion does the collection evoke? Is it playful and quirky? Is it classical and traditional? Maybe it's minimal and Scandinavian, or maybe it's bohemian and eeral. Next up, look at the price point. So check the cost of a standard T shirt or a dress. Are they low budget fast fashion or are they mid range, or are they high end boutique? And this really influences the perceived value and the complexity of the print. Look at their target age and gender. So look at the models that they have in their photos and the products. Do they focus heavily on newborns or toddlers? Or are they primarily catering to their six to 12 year olds? Do they balance boys and girls wear or do they focus on gender neutral items? Then look at the social media engagement. Look at the comments on their posts. What language do their customers use to describe the brand? What do customers say they want more of? And this is really a gold mine for unmet needs. And then let's look at the gap analysis. So this is where you fit into the picture. So you're looking for the missing motive. So list all the motives used recently. So, for example, dinosaurs or trucks or flowers or rainbows. And then let's say they have lots of florals and animals, but their last geometric was really simple. You could pitch a sophisticated, muted geometric pattern like a simple diamond, inspired by their core color palette. And then look at their last two seasonal launches. Say they've done a lot of bright summer prints, but their winter prints are just solid colors. You could pitch a textured winter themed pattern design to work on, say, flannel or fleece. Then look at their accessories like blankets and backpacks. If they sell accessories, but they only use simple stripes on them, you could then pitch a large playful character placement print specifically designed for the front or front pocket of a backpack in their signature color style. So these are just some ideas of what you could do. Here is the action plan to start, pick just one brand and go through these nine analysis steps. Once you complete the analysis, the gap will usually become very clear. So here is a real world example. I just grabbed a brand. I really love this brand Reign Crew. It's a local brand, and I thought I would give the analysis a go on this. I haven't actually pitched to this company. I just wanted to show you how I would go about analyzing it, and then maybe I will pitch my idea later on. So the first phase is the aesthetic and style analysis. The second phase is the customer and market analysis, and then the phase and then phase three is the gap analysis and pitch idea. Looking at this company, I've discovered that they have a very muted, earthy and sophisticated color palette. So there's lots of sage green, blush pink, Sienna brown, et cetera, and they avoid highly saturated primary colors. So I would avoid using any neon or electric blue or bright red, and instead, I would use some more low saturation, sort of complex hues. I would create a palette based on muted earth tones first. And then I had to look at their motifs. They have a real sort of hand drawn, artistic and whimsical kind of motif style. They look like they were drawn with a fine pencil or crayon or even a watercolor wash. They are imperfect, soft, and slightly vintage inspired. I'd want to avoid crisp vector art, bold outlines, and perfect symmetry. And instead use sort of textural brushes or hand drawn lines and organic wobbly type shapes. The pattern types, they seem to have predominantly ditzy florals and conversation prints. So, for example, small holiday trees, tossed fruit, suns and abstract shapes. They also feature simple gingham and plaid and stripes, which they use as their coordinates. So I would focus on sort of a tossed ditzy repeat, maybe. The motifs are generally small to medium scale garments to maintain the sweet and understated look. And with the overall vibe, I found that they are very modern, understated, sort of California surfer check meets timeless heirloom type style. The clothing is relaxed, loose fitting and emphasizes real comfort and quality. I think the key selling point here is the prints are cute without being garish or overly busy. They are designed to coordinate with neutrals and be passed down. So they have that heirloom quality. So let's look at phase two, which is the customer and market analysis. So this is where we are defining who buys the clothes and why and also the price point. Which I think I believe it is mid to high end. So for New Zealand, that would be sort of 80 to $120 plus for just a simple set. Appears that the customer is willing to pay more for quality, longevity and artistic originality. So your print cannot look cheap or mass marketed. It must look like unique unique art. The target audience seems to be parents who value sustainability, so organic cotton, ethically made the mix and match functionality and the family matching, like the mummy and me. So they have quite a few sort of sets that go together, so mummies and the kids set. So your picture must highlight that your print will work seamlessly with their existing solid garments and will last multiple seasons. So the brand emphasizes timeless pieces with excellent quality, so modern, understated, yet fashion forward look. So I would not want to pitch a print that is overly trendy or loud. I would want to pitch a print that feels like it could have existed five years ago and will still look good in another five years. And the last phase, the gap analysis and pitch idea. So now we can find something that they need but haven't developed yet. So based on the analysis, Riley and Crew heavily relies on tossed florals and simple plates, especially in their soft sort of artistic style. So there is a potential gap here. While they do florals and conversations really well, there is often a need for a sophisticated abstract filer print that aren't nature based, but still use their signature aesthetic. So I've discovered that the need here is a versatile, gender neutral abstract pattern that can be used on baby blankets, gender neutral rompas and adult pieces, so for that family matching. So I came up with the Wabi savy geometric. So Wabi Sabi is really kind of timeless. Aesthetic, I guess. And then I thought the geometric would work really well. So the Wabi Sabi, the philosophy of that is that this is the ancient Japanese aesthetic philosophy that finds beauty in imperfection, impermanence, and incompleteness. It celebrates the raw, the simple, the rustic, and the subtle marks of time and nature, like a crack or an uneven surface or faded color. So some really cool textures and stuff like that. So to maintain the aesthetic fit, the pattern must maintain that hand drawn imperfect, imperfect style and use the muted earthy palette. So a tossed repeat of loosely drawn, imperfect grid lines or small wobbly semicircles like a C shape, the motif should look like it was stamped or drawn quickly with a dry paint brush. So I would paint these with a dry brush on paper, scan them in possibly vectorize them in illustrator to create an organic repeat. Then for the scale fit, I think a mid scale airy pattern that doesn't feel too dense or busy on a garment. So the goal here is this pattern is a flexible coordinate that adds visual interest without competing with their existing harrow prints like their signature ditsiFlal. So by pitching this Wabi Sabi geometric, I'm showing them that I understand their muted color palette. That I can replicate their hand drawn aesthetic and providing a pattern for a strategic need, gender neutral abstract coordinate that expands their product range. And this kind of analysis transforms the like their stuff into, I understand their market and can solve a design need for them. So I encourage you now to go find that brand and go through these nine analysis steps and see what you come up with. You might surprise yourself. So yeah, give it a go, and I love to see the result. So up next, we're going to talk about pricing strategies for licensing. I'll see you there. And 5. Pricing Strategies for licensing: In this lesson, we're going to talk about pricing, which is a very hard topic to talk about because there are so many variables. But let's jump in and see if we can create some strategies to help you come up with the best price for your situation. So before we talk about numbers, let's talk about value. So your time has value and your artwork has value. Major issue in our industry is price dumping, which is when artists significantly undervalue their work by offering it for a very low fee or even for free. Now, I have been guilty of this in the past, thinking that a freebie for a friend or exposure would lead me to more work, but it doesn't. When you undercharge, you not only devalue your own work, but also hurt the entire creative industry. We need to say no to free work and low fees and say yes to valuing our art and our time. So if you've ever felt paralyzed, wondering, what should I charge? I want this to end right now. We are going to stop guessing and start calculating based on value. Your price is not just a random figure. It's a sum of four distinct factors. So factor one is your experience and your brand recognition. So are you a student or a beginner or are you an established professional? An established designer with a recognizable style can command a higher initial price or royalty percentage simply because their brand adds inherent value and reduces risk for the licensee. If you are newer, you might start with slightly lower fees, but tire you negotiate for a shorter term, like about one year to get the rights back quickly so you can then increase the price upon renewal. Factor two is the complexity of the design. So how long did it take you to create the pattern simple dot blender might take 30 minutes. A dense hand painted harrow print might take 40 hours. So your price should reflect that investment of time and unique skill. How unique or breakthrough is the design? A generic design is easier for the client to replace lowering its value. High intricate signature design is harder to replicate, justifying a higher price. Factor three is licensing rights. This is the most powerful factor we discussed in Lesson one. So this is the term, the territory, usage in units. And this is the multiplier for your baseline price. The more rights the client controls, the higher the price must be. So remember the rule, exclusive rights, meaning only they can use it for X time or product immediately command a significantly higher price than non exclusive. And factor four is the sustainability factor. So this comes down to personal things like the cost of living. So your baseline price needs to cover your existence. And this could include your rent, your groceries, and your healthcare. If you live in a high cost of living area, your hourly baseline naturally starts higher. And then don't forget the hidden costs. You aren't just getting paid for the hours spent drawing. You're getting paid to cover your Adobe subscription, your website hosting, your high end scanner, and your taxes. And then you've got the global market versus a local reality. While licensing is a global game, you have to ensure your minimum viable price actually keeps your lights on. We don't price to compete with the lowest bidder. We price to sustain our unique practice. So there are so many ways to come up with a price on a license, and there are so many variables. So my first point of call would be to have a read of the graphic artist Guild pricing guidelines book. Use this as a starting guide and then calculate the price based on the variables and questions you have gotten answered from the client. So after doing that, the best way to price a license is to separate the cost of creation from the cost of usage. So you will have a creation fee plus a usage fee, and that will equal your licensing price. Your creation fee is what you charge for the time it takes to create the artwork. A simple formula is your hourly rate multiplied by the number of hours you estimate the work will take. I'll show you how to work out your hourly rate in a minute. Then you have the usage fee, and that is the cost for the client to use the design. A common way to calculate this is to base it on a percentage of the recommended retail price. This can range from 2% to 15% and is then scaled based on the key factors we just discussed, the units, time, region, et cetera. When you quote a client, you can offer them different options, for example, a one year license versus a five year license to give them more value for their money and encourage them to purchase a more comprehensive license. So here's the formula that can help you come up with that price, and you can also access a calculator on my website. Use this as a guide only and check with the graphic artist guide book for more information. So let's break down into steps. So first, you can work out how long will the job take to complete or did it take to complete if you've already done it in hours times your personal hourly rate, and that is your creation fee. And then work out the number of units produced, times the recommended retail price percentage, so that could be 5% or it could be 15%. Of the recommended retail price. And that's your usage fee. So then you just add up your creation fee and your usage fee, and you come up with your minimum viable price. Now, for working out your hourly rate, this depends on your experience, your location, and your cost of living. So a simple way to calculate a starting rate is to work out what your annual income goal is and then divide that by 52. So 52 weeks. Then divide that by the hours worked per week, which then becomes your hourly rate. So, for example, if you wanted to earn $60,000, you would divide that by 52. Then you would take that amount and divide it by 40 hours a week if that's what you want to work. And that would be $28 85/hour. I've also got a calculator on my website. That will do that for you as well. So and then step two, you want to add your value based pricing. So your base rate is just the start. You should also consider the value the design will bring to the client. So ask yourself how large is the company? Where will the pattern be used, a small, limited run or a major product line. How long will the pattern be in use? A pattern for a multinational brand's main product line is worth far more than a pattern for a small local business as one off project. Now let's turn that licensing fee into a flexible, professional document using the pricing tear worksheet and calculator resource which you can download. Every negotiation starts by presenting a sort of a tiered pricing system, and this gives the client options and puts you in control. So, if you look at this table here, I've got three tiers. The first is the lowest, and it's basically based on a one year license and one location for one product. And then to calculate it, I would use my MVP or low royalty percentage with a small advance. Then the middle value is probably the most used for me, and that's a three year term, probably one region, such as Europe, and it could be up to three products. And then I would ask for a royalty around seven to 9% with a higher guaranteed advance. And then you've got tier three, which is a real high value, which is kind of reserved for breakthrough art or exclusive deals, and that can go for five years in a global territory, and this one will also have a higher royalty rate and a substantial advance. So this is just an example. I want you to go away and come up with your own after working out your own sort of situations. Everyone's going to have different prices, so depending on where they live and their situation. So this is something you can do for yourself. Don't just copy mine, create your own one. So and also with the advance, a crucial term in the royalty tiers is the advanced against royalty. This is a lump sum payment which is upfront that acts as a guarantee. You keep the advance and even if the product flops, and the company starts paying you royalty only after the royalties earned equal the advance amount. Always, always negotiate for a nonrefundable advance on your royalty deals. I don't have them, but I really recommend trying to get an advance. Alright, so you've done the math. You know how to calculate your licensing fee, and you have your tiers. Now, how do you manage the conversation? So in negotiation, the person who states the first price sets the anchor, which influences the final number. Because you've done your research, you should feel comfortable setting the first anchor. So when the client asks for your price, present your tears and start the discussion at a price point that is ten to 20% higher than your target price. This gives you room to negotiate down while still landing above your MVP. Fair pricing is not aggressive. It is informed. You are simply stating the value of your art based on the rights the client is asking for. With your pricing strategy complete, we move on to the final piece of the puzzle, demystifying basic contracts, so you can sign with total confidence. See you there. 6. Demystifying Basic Contracts: So let's look at contracts as your best friend. It's kind of a bit of a shift in our mindset, I guess. A contract is not a weapon. It is an agreed upon blueprint for a relationship. It protects both you, the license, and the company, the licensee, by clarifying expectations and providing a clear path if the relationship encounters problems. A contract provides protection. Without a contract, if they fail to pay you, you have no recourse. With a clear contract, every term, your payment, their usage, and the timeline is legally defined. It also provides clarity by ensuring that every term we discussed, so the term territory usage in units is black and white, preventing costly misunderstandings down the road. Now, you don't have to be a lawyer, but you absolutely need to check for these critical clauses. I have included a contract review checklist in the downloads for you to use as a guide, but here are some main sections. So the first one is the grant of license and scope. What you should check is does this section clearly and narrowly define the exact art being license and the exact usage, territory, and term agreed upon? A red flag here would be vague language like all product rights or global rights in perpetuity without an astronomical price tag. The next section to look at is the warranties and indemnity. So check that this is where you, the designer, guarantee that your art is 100% original, that you own the copyright and that it doesn't infringe on anyone else's work. This is important because this clause protects the licensee from being sued if your art is copied from someone else. You must be sure your work is original. If your art is original, this clause is just routine. Then look at the payment schedule and reporting, and this is really crucial for when you have royalties. Check that you have negotiated a royalty that the contract must specify the royalty rate, for example, 8% of net sales, the basis. So is it net sales, gross sales or wholesale price? Always aim for gross or wholesale, if possible, as net can be manipulated. And then the reporting schedule. So, for example, is it to be paid quarterly or bi annually or monthly, and ensure your negotiated nonrefundable advance is clearly stated and that it is credited against future royalties. Another one to look at is the termination clause. So check under what conditions can either party end the agreement early. This ensures you have the right to terminate if the licensee fails to make payments or fails to launch the product within a reasonable time frame, for example, 12 months. Also check the credit and attribution if negotiated. So check if you negotiated the right to be credited. So for example, pattern design by your name, ensure the language is clear about where the credit will appear. So for example, is it on the packaging, the website or a hang tag? So what do you do if you don't understand a clause? Well, it is okay and professional to ask questions. Don't ever feel silly about it. You are signing a legal document that affects your income for years. So ask for clarification. If you see a term you don't understand, email the art director or your contact and ask, can you please explain what indemnification means in this context. A good business partner will explain it clearly. You can also negotiate edits, and don't be afraid to request these. If a clause feels too one sided, you can suggest a change. For example, changing the payment basis from net sales to wholesale price. Um, and also always send these requests in writing. Now, if the contract involves a large amount of money, so a really major exclusive deal or contains truly complex clauses, find an intellectual property or contract lawyer. This might cost a few hundred dollars, but it's an insurance policy that protects thousands and potential earnings. So how do we handle amendments and renewals? So licenses don't last forever, and that's a good thing. When the term of your contract expires, the art comes back to you. The rights to the pattern or the artwork return to you, the license or. Now, if the product was successful, the licensee will want to renew the contract. And this is your chance to increase the price. The price should never be the same as the original license as the product is now proven in the market and has less risk. And finally, if the client wants to use the pattern on a new product before the contract ends, they must send you a contract amendment which requires a new price and payment from them. In the next lesson, we're going to look at creating the pitch perfect portfolio so that you can transform that interest into a request for a contract. See you there. 7. Pitch Perfect Portfolio: Okay, in this lesson, I'm going to talk about how to build a pitch perfect portfolio to help you get clients. A licensing portfolio is a sales tool, not a gallery. It should solve the problems for the art director. It should also showcase your versatility, so grouping patterns into collections and stories. Also, art directors are really busy. You have 30 seconds to prove your style matches their brand, and which is why I like to send sale sheets as opposed to full on portfolios. So the sale sheet is your secret weapon. Um, sending the entire portfolio is an overkill. Instead, using a sale sheet, it's just one single page PDF that showcases one specific collection or a curator group of patterns. It's the fastest way for a client to say yes without digging through a 40 page deck. And they may then ask for what else you have available, and then you can send on your portfolio. So when thinking about what you put in your portfolio, I like to group my patterns into stories or collections. So my collections basically will have a hero print and then some coordinates, and then a bunch of blender patterns. Now, it really depends on your market that you're targeting, as well. So you might be targeting a greeting card company, and then, in that case, you might want to have some typography in there, some patterns and some spot illustration. So it really depends. So my target clients are mostly for patterns, so fabric, stationery, that sort of thing. So the majority of my portfolio is made up of collections. So also, I like to include mockups. This is in my portfolio, not my sale sheet. So the mock ups show a product relevant to your target industry. So like wallpaper if that's your target industry or fabric for a professional sales sheet, all you want is to show your patterns. So you'll have your hero pattern. Coordinates and your blender patterns. You should also include your name and collection name and maybe a reference number, as well as that makes it a bit easier for the clients to tell you which one they want to license if it's just a single pattern. Also, both the portfolio and the sale sheet should have some contact information on them in your portfolio. There should be on every page, if you can. So let's look at my portfolio for patent collections. This is one that I will send out to fabric companies or maybe stationary companies. So this is my portfolio. It is on Canva, or that's where I created it. You could send a link to a client from that directs them to this Canva preview of it, or you could download it and send them a link to a PDF using Adobe Acrobat or even save it on a cloud server like Dropbox and send them a link there. So basically, I have a bunch of things in here. I have a little bit about myself, and then I have a list of clients that I've worked with. And then I have pages dedicated to just collections that I've created. And notice every page has my website and email address on it. So I basically update this every time I add another collection. I do take stuff out, as well. These are super easy and quick to create on Canva. And because I've got it there, I've got it set up like a template. So basically, I can then just copy one of these pages and then chuck in my new collection as I create it. So it's super easy to add to, super easy to remove from. So this is an example of a sale sheet for my whimsical forest floor collection. This collection has been licensed to Cloud nine fabrics. So initially, this is what they saw for my collection. And then we went and added quite a few more blenders and different color ways. So this here is all set up in my pho shop. I have a template for it, and then I just add I have sections here for all my patterns. And then when I create a new one, I can just update each of these patterns to the new one and then change the title and then change the color colors here. These are all color fills that I've created. And then, of course, I've got my logo as well. So as an example, this had about five or six patterns to begin with. I had a couple of colorways of the harrow print, and then Cloud nine wanted some additional blenders, so I added some more and then some more colorways, as well. So the final version is this one here, which is about 16 patterns. So a lot of them are just different color ways of different of the patterns, and there is a couple of additional blenders in there. So always be prepared to increase your pattern collection if need be. Congratulations. You have now completed all the steps necessary to operate your surface pattern design business professionally. You should now be ready to pitch, price, and sign contracts confidently. In our final lesson, we'll wrap up the class project and map out your next steps forward, securing your first successful licensing deal. See you there. 8. Conclusion: We made it. Congratulations on completing the business of patterns, licensing and pricing. I want you to take a moment to appreciate how far you've come. You didn't just learn about patterns. You built a business framework necessary to turn your creative talent into consistent income. I want to leave you with one final, powerful mindset shift. Licensing is not a battle. It is a collaboration. Companies need your art to make money, and you need their platform to reach a wider audience. When you approach them with confidence, clear pricing, and professional contracts, you demonstrate that you are a serious, valuable partner. This is the foundation for securing repeat business and building long term earnings. Now, remember your two part class project, your ideal licensing partner research worksheet, and your personalized pricing tear sheet. You don't have to upload these to the project gallery as they may be a little bit sensitive, but do upload something a portion just so that we can see that you have accomplished it. And it also helps me and the entire community learn. And it also ensures that you have these crucial business documents ready to launch your career. Thank you so much for taking this journey with me. I can't wait to see your first licensing deal announced. So do let us know if you do get a licensing deal after doing my strategies. Good luck and happy pattern making Sea.