How much to charge?

Discussion in 'Community' started by bburchill, Dec 17, 2003.

  1. bburchill macrumors member

    Dec 5, 2003
    We just lost one of our clients as a result of them being bought out by a mega company that has its own in-house ad agency. They own lots of businesses exactly like the client we are loosing.

    This mega company is interested in buying the rights to this years creative to use for 2004. We would ship them all of the art and they would take over from there.

    The creative includes four regional seasonal print, billboard, bus king, transit shelter campaigns plus a couple special event print and poster ads and several collateral pieces.

    If I add all of our creative cost for these items plus the talent and photography usage costs for another year, it comes up to a little over $100K.

    What should we offer this creative for? Do I discount it by 50% or 60% or what? Any suggestions would help but keep in mind we want to make an offer that will be accepted. Any income is better than no income and if they don't like our numbers, they'll just use their own creative.

    We're really bummed.
  2. iGav macrumors G3

    Mar 9, 2002
    50%/60% is a huge mark down...

    to be honest any number you think of you'll be pulling out of thin air... wouldn't it just be better to sit down with the mega-corp and agree a mutual figure??

    10%-15% sounds more realistic to me, but they might be thinking 5% or 50% you just don't know.

    I'd personally arrange a meeting and see what you could salvage.

    serious bummer though.
  3. Kwyjibo macrumors 68040


    Nov 5, 2002
    It would depend on how your figuring your costs are they realistic? is the company paying the same for similar work? If so they will be more likely to pay closer to retail. I would try and negiotitate with them. Start high and have a firm low, dont' come off depserate because i'm sure a firm like that will try and bluff you .
  4. tazo macrumors 68040


    Apr 6, 2003
    Pacific Northwest, Seattle, WA actually
    Kwyijbo is right:

    name an outrageously high price, so that your firm, decidedly low(er) final price seems much more reasonable :) start off with atleast 3x as much as you would like :)

    you might even get lucky and have them agree to it :)
  5. etoiles macrumors 6502a


    Jun 12, 2002
    Where the air is crisp
    or you might have them laugh and walk away. You will look like a clown if you just pull numbers out of your hat. "300% ? No ? Then how about 200 % ? Maybe 120 % ? etc. ..."

    you need to figure out how low you can go without losing money and that should be your absolute minimum. If you feel adventurous, try to negotiate a margin on top of that.

    They will soon let you know what they have in mind, but it is important to start off with a fair price for you.

    May the force be with you and all that good stuff.
  6. bburchill thread starter macrumors member

    Dec 5, 2003
    Great responses...Thanks!

    Just to clarify, they want to buy open files of all creative work we did in 2003 that they will re-use for 2004. We own the creative and they understand that.

    I just did up an excel worksheet where I put our original creative cost for each piece in one column and then talent and photography in 2 other columns with a total at the end.

    So, as I expected, it came to a little over $100k. Do you think it's a sound methodology to apply a discount percent to each total like 85% or 35% (the percent I use would be the same for each item)?

    Or is there a better methodology to use. I can't find any reference material (web or otherwise) that covers this situation?
  7. mischief macrumors 68030


    Aug 1, 2001
    Santa Cruz Ca
    It's too valuable....

    If your cost was 100K, don't get paid for less than what its worth.

    If they want to screw around and dicker offer them a licensing deal that still pays your costs but retains your rights to the material. A lump sum to cover toal incurred costs so far on the account plus a little bit of cash whenever they release work you designed.

    What was the original contract like? Buyouts don't kill existing contracts. The bigger company absorbed the DBA and legal obligations of your client. bring the original payment schedule to negotiations and GET PAID IN FULL.

    It would be worth digging into contract law on this one. Search Amazon under "Nolo Press".
  8. bburchill thread starter macrumors member

    Dec 5, 2003
    Thanks. Just a little clarification.

    We produce all the creative for 2003 and we own the rights to it.

    We were paid for that creative by our now ex-client.

    The new mega company that bought our client, has asked us what it will cost to buy all of our 2003 creative so that they can re-use it in 2004.

    Hope this makes more sense.
  9. mischief macrumors 68030


    Aug 1, 2001
    Santa Cruz Ca
    Yeah, that's clearer.

    You have 2 choices:

    1: If you want future business you should undercharge SLIGHTLY.

    2: If you simply want to be free and clear you should charge what it's worth if not up it by 10% to cover diminished revinue for 2004.
  10. bburchill thread starter macrumors member

    Dec 5, 2003
    Thanks for the advise. As it is, the mega company has made it clear that they will not be using us for 2004. Our only hope to garner addt'l revenue here is to come in with a creative re-use price that will be accepted.

    Someone from another forum provided some excerpts from a reference book on pricing for graphic designers which suggested that 55%-75% of the original creative charge as being the negotiated averages for re-use. It also pointed out that there is no set guidelines for this situation however.

    Please keep the replys coming because this is all very helpful and if anyone has gone through this before, I would really like to hear about your experience.
  11. wdlove macrumors P6


    Oct 20, 2002
    If they are not going to be using your 2003 work for 2004, why do they even want the material? You should try doing an outstanding presentation for 2004. Make a great pitch maybe they will hire your services.
  12. bburchill thread starter macrumors member

    Dec 5, 2003
    Sorry for not being more clear...they will not be using us for 2004 (they have their own in-house ad agencyÐwe're fired) but they may want to use our 2003 creative for 2004, IF, our price is right.

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