Exclusive design and sales

The designer selling renderings to a manufacturer is in a
different situation. In that case, the design is being sold, not a
single example. The clear intent of both parties would be for the
manufacturer to produce and sell the products, and the copyright
would be sold along with the rendering. 

Although there’s nothing on this thread this morning, I still want
to wrap it up - you’ll see. A jewelry design in the industry is the
same thing as a patent, just different words in different
industries. You can try to call something a “fee”, but the courts
(and I) look at the flow of capital, and disregard labels.

I mentioned that I’d referred something to Andrew - that referral
could be called “design work”, but it’s actual glorified data entry.
I had some dealings with CNC lately that was essentially the same -
inputting a sketch from the customer. Not truly original work. In
cases like that, it is certainly reasonable to expect to be paid.

But the topic of this thread is someone making a new line in
collaboration with a store, which is business to business, and
original work. And then a few people piped up and said, “You should
charge her for the designs”. Or the “design work”, which is the same
thing. In my mind, and I believe any court would agree, when you say
such a thing you have made an agreement to sell your designs to the
store. That is, unless you somehow think they’re going to support
you while you do your own job in your own business.
…Mommy… I don’t see that, “give me money for the designs”
is difficult to understand. You are selling the farm, and by your
own initiative, to boot.

But whether I am right or wrong is beside the point. The real point
is that I don’t buy it, and this whole discussion that has ensued
stems from that. If you just make your designs and sell the product
of the designs, as I said long ago, it is clean business, there are
no arguments or disputes, and everybody’s happy. This whole
discussion of, “Well, I bought the designs - no you didn’t, you
bought my labor but not the designs, well how does that work
exactly, did you think I was a charity?” is completely unneccessary
if you just work in the “normal” way. You come up with a design, you
produce it, and you sell it. Prorate the design work into the final
product, just like everybody else on the planet. That’s the model
that has served the world just fine for many centuries.

Prorate the design work into the final product, just like everybody
else on the planet. 

I must be on another planet. I see a deal like this as two separate
components. Development, and production.

Well, there’s a catch here, or in the original scenario. The client
is to approve the designs before production. Fair enough. But that
may mean some number of proposals will be declined. Those declined
designs took time and maybe some money and material to do. Those were
done at the client’s request, not merely picked out of an existing
line. Suppose the client approves none. It apparently isn’t likely in
this case but still a distinct possibility. Always factor in risk.

Now since there is a preset price point and quantity, the more
designs are declined the tighter margin becomes. You may reach a
point where there is no, or at the extreme, a negative margin if you
factor in design labor, which a for profit business should. At a
thousand dollars total there isn’t really a ton of room to maneuver.

Good faith money. Design fee. CYA. Call it whatever you want. If the
OP can afford to work on spec, great. If she’d like to walk away with
a predictable profit, eliminating or at least mitigating profit
drains will certainly help. If it costs say, $100 in time/material to
do each proposal and 3 get declined…take $300 off the profit side
of the deal. Then you have $200 to develop the two approved designs.
$500 invested before production even begins. Add production costs,
lets assume total of $300 for time/materials/incidentals. $800 cost,
$1000 sale price. profit of $200 instead of $500(there’s that risk
factor I mentioned). Which would you choose? (these numbers are
arbitrary, for illustration only)

Balance that with the need/desire to land the account. I would ask
myself what is my prime motivator in chasing this deal. Is it to
make a reasonable profit? Is it to further my experience? The answer
to that will light the way.

Good faith money. Design fee. CYA. Call it whatever you want. If
the OP can afford to work on spec, great. If she'd like to walk
away with a predictable profit, eliminating or at least mitigating
profit drains will certainly help. 

Yes, Neil, those are all valid concerns - me, I just raise the price
as it drags on. (Labor: $10/hr. If you watch: $20/hr. If you help:
$50/hr.) But we are a jewelry manufacturer - if you tell me that I’m
being charged for a design, I expect to get what I paid for - a
design and all that entails - in the end (even if I don’t actually
want it - I paid for it). This whole thread has brought out those
issues - I still maintain that it is risky and foolish to tell a
professional that you are charging for design - they will demand
what they paid for, in the end. Paying for a change-order, maybe -
earnest money, certainly - but don’t sell your design. Your word is
your bond. Choose them carefully.

Well, I’m not an expert in the subject, but I try to simplify the
matter for myself.

If I run a computer shop and I sell Macintosh, just for buying it to
resale doesn’t mean that I have the rights to make a copy of it.

(I know that the Chinese’s doesn’t think just like that).

In other hand if a costumer ask me to make a design for him, I will
personalize it and the jewel belongs to him( I charge for it, but
also I suppose that as a final customer he will not reproduce it
since he belongs to other business).

Vlad R Poenaru

Still in Tucson!! By the way the only orchidean that give me the honor to
visit my booth was Mr. Charles L. Brain.

www.braziliangems.org

In other hand if a costumer ask me to make a design for him, I
will personalize it and the jewel belongs to him 

Well, Vlad - you don’t ~automatically~ give up rights to a design
when you sell a custom job. The point of this thread (that I think
many didn’t grasp) is that the situation in question is wholesale
business. Which is to say professional to professional, at least
hopefully. If you tell me (as a professional) that you are selling
(charging for) a design, my expectation is that I will have a design
in the end. Not a difficult concept. And the solution is simply to
not say the words to begin with. Do business like a professional.