Howdy everyone!
So a friend of mine wants to commission me for a logo design and I don’t know how to do pricing for this.
Should I just say something like "it will cost x amount"?
Should I do a day rate, an hourly rate?
I just have no idea how to navigate pricing honestly.
Hello!
I don't know about pricing logos but you should do some research about it.
For example you have to think if it's a big company or a small one. How much time it wil be used.
In any case never price per hour this kind of jobs.
You have to keep in mind that logos is something very expensive as it is something very very important for a brand and they will use it everywhere.
Hope this kinda helps somehow, good luck on the commission!
@Griffin I think in this case since you don't know what to do, hourly is the way to go. I don't think I'd ever do a value based logo branding design for someone I personally knew - just too sticky possibly.
I think if they're serious about a logo, at least in my experience, they're in for a good 20-30 hours. From the research to sketches to revisions to final versions that would be the minimum I'd factor in. Just based on that, you'd charge between $1500 and $3000 depending on your hourly rate.
Here's a pretty good dissection of how Chris Do, the owner of a pro design agency prices a logo.
https://youtu.be/RKXZ7t_RiOE
Worth watching the whole thing, but feel free to start at
https://youtu.be/RKXZ7t_RiOE?t=168
I point this out because the Chris Do references the Nike logo specifically. He says that the Nike logo is worth "billions", and then Chris Do goes on to use the Nike logo as an example of "pricing the client" rather than the job.
Fundamentally I agree with this approach.
Except in the case of a logo created for a 1971 era Nike. You see the designer, Carolyn Davidson, was paid $35 in 1971 ($221 in 2020 dollars) for the Nike logo.
That's it. Full stop. Nike owned the Swoosh logo mark for $35.
See, here's the thing about pricing logos that I've never heard anyone actively address. Because, in 1971 the Nike logo was only worth $35 to Phil Knight.
Nike was being run out of the back of his car as he sold shoes one pair at a time at track events. The whole business could have been dead the following month, or a couple months, or even just a few years later. The chances that Knight had the budget to pay what the mark was worth at the time (much less the potential value of the logo 15, 20 or even 50 years later) are incredibly slim.
Now, it's well known that more than a decade later in 1983 Phil Knight and Nike did compensate Carolyn Davidson with a surprise gift of Nike stock which has since become worth hundreds of thousands of dollars (arguably a STEAL given that the logo is now worth billions) but that was not out of any business savvy of the designer. It is just as possible that the Nike logo would have only ever generated her $35. I wouldn't want that. I can't imagine any of you would want that. I doubt very seriously the original designer of the Nike swoosh Carolyn Davidson wanted that.
https://www.oregonlive.com/business/2011/06/nikes_swoosh_brand_logo_hits_4.html
But if you follow Chris Do's advice in this video to the letter that's what would have happened.
So here's what I suggest to anyone doing logos for small start-up companies with budgets that don't (or simply can't yet) compensate you for your time, talent, and effort.
LICENSE your logo.
Do. Not. Sell. It. (that is, don't create the logo as Work For Hire. Don't transfer your copyright to the client)
Explain the the client that this logo has significant potential value (and believe me, your client will already know this) and that if you charged accordingly it is likely to be outside the client's current budget. Instead offer to license the logo ( I'd personally specify an "exclusive unlimited use") BUT for a limited amount of time. The lower the budget the shorter the license time.
If the business is successful the client can always come back and relicense for a few more years.
Eventually, if the business is successful enough (as we saw in the case of Nike) they will come back for a "full buyout" at which time you can negotiate a fee that is commensurate with what the logo is actually worth.
@davidhohn I'm curious about your perspective on these friends and family type deals though. I totally agree with everything you've outlined here, but in the cases where it's a friend that "needs a hand with a logo", how would you approach licensing? I mean, 99.999% of your friends are not going to be making the next Nike. Usually it's someone you know that owns a local bike shop or something like that.
I think the last logo I tried to make in a situation like this, I ended up making a couple thousand less than I would have charged in a work for hire situation, and 3 years later they had someone else make a new one anyway.
@jdubz You are totally right that 99% of your friends aren't going to be the next Nike.
Nike didn't know that it was going the be the next Nike!
I'm sure if Phil Knight knew Nike was going to become a huge company he would have hired a "proper" design firm and paid an appropriate fee for the logo.
And that's the beauty of licensing.
It works with a client's budget at the time they are looking to have the work done.
It both shares some of the risk and shares the potential rewards.
It allows for both the tiny businesses that will never be more than a single shop AND the businesses that (almost accidentally) grow into a larger more profitable company, eventually being able to pay a reasonable design fee.
I think the last logo I tried to make in a situation like this, I ended up making a couple thousand less than I would have charged in a work for hire situation, and 3 years later they had someone else make a new one anyway.
Can you clarify the situation you refer to?
Do you mean you had a Work For Hire design fee that both you AND your client would have agreed to but you chose to go the license route?
Not sure I would recommend that. The licensing that I'm suggesting is for those start-up clients who can't afford a reasonable Work For Hire design fee, but YOU still want to do the project.
You know, the ones (maybe even a brother-in-law) that offer you $200 to create a logo.
You aren't losing any money in this situation, because the client simply doesn't have it. If you quoted (let's say) $5,000 for a logo to this kind of client, they would just say "Sorry, I don't have that much".
And you mention the client simply got a new logo 3 years later.
Unfortunately that's a risk you take when you license anything.
The licensing option I suggest is not a "sure thing" for future income. The fundamental risk is always there because the business may simply fail. Ergo, no relicensing fee.
You point out another risk (that I didn't mention in my initial post) that the client may not like your logo enough to relicense it. Ideally they would ask you to redesign the new logo (now with enough business experience to pay an appropriate design fee), but of course there's always a chance they would move on to someone else.
(In the case of the Nike swoosh, Phil Knight didn't actually like the logo at first. He only went with it because production schedules were tight. It is just as likely that he could have hired a new designer as soon as the finances allowed it.)
BUT, using the licensing option, at least you gave yourself the opportunity to generate an appropriate design fee from a client with a small budget. If you ALWAYS do logos work-for-hire (even for clients with inappropriately low budgets) you never give yourself that opportunity.
Can you clarify the situation you refer to?
Do you mean you had a Work For Hire design fee that both you AND your client would have agreed to but you chose to go the license route?
It was something I did personally (we hadn't discussed the two options). Normally when I'm working with smaller companies, most of the work I'm doing is work for hire (for things like web development). I had done some logo licensing in the past where it was a lower fee but I retained the license, but more often than not these smaller companies end up getting a new logo made every 5 years or so. In the past 10 years of working, I've never actually made more money on a licensed logo because these ma and pa companies just were never going to get big and they never had much interest in their brand.
So I had switched to doing it as a work for hire because I could bill a good amount more. I do see that I could be leaving money on the table if they ever did something with it, but I just never saw any fruit from it which is why I had switched.
Howdy everyone!
So a friend of mine wants to commission me for a logo design and I don’t know how to do pricing for this.
Should I just say something like "it will cost x amount"?
Should I do a day rate, an hourly rate?
I just have no idea how to navigate pricing honestly.
