Pricing question

  • SVS OG

    Hi! This is one of those "working for a friend of a friend" situations. Someone wants to start a YouTube channel and needs a sort of character design/logo* based off the host's portrait. It's very informal, so I'm imagining it's work for hire, to be done within the week. I haven't even met the host yet; it's the friend (who is already freelancing for the host in a different capacity) who asked me what I'd charge so she could suggest I do it. I'd say that portraits are one of my relative strengths, so I think I could come up with something.

    Does this sound appropriate?
    If so, what kind of questions should I ask?

    Also, this is in Italy, which tends to drive prices down, but I at least want to know what the going US rate is.

    Thank you!

    • P.S. I already said I wasn't a logo designer, but I'd imagine that she means something more like an avatar.

  • SVS OG

    @LauraA since this is for a friend, in case you decide to give them a lower fee, I suggest not going below your hourly rate. Also, don't let this turn into a scope creep. limit you revisions to 1 or 2 times only.

  • SVS Instructor Pro

    @LauraA I would recommend not assuming it is Work For Hire.
    It certainly can be, but only if both of you agree. Otherwise I recommend licensing only the uses the client intends to use the artwork for right now.

    After all, if the channel becomes successful enough that the client needs to use the artwork in other ways you can always negotiate that later.

    I agree with feature creep that @Nyrryl-Cadiz mentioned.

    I'm not aware of a going rate in the US. You can find people doing avatar drawings for $20- $1000. Based on my experience you are going to find that the budget is low. Your hourly rate may even be deemed "too high". Which is why I would again recommend limiting the rights licensed.

    By licensing the artwork to (for example) a YouTube banner and avatar use only for 2 years for $200, the initial investment by the client is very low. If the channel fails they haven't spent any significant money. And you made enough to hopefully break even.

    BUT if the channel succeeds and they start generating real revenue, then re-licensing the image for 5 years for (and I'm just picking numbers here) $500 is great for everyone. Client continues to build a brand and you continue to generate income from work already created.

    And while you (likely) lost money on the initial license of $200, you start to generate profit on the relicensing of the same image over and over.

  • SVS OG

    @davidhohn and @Nyrryl-Cadiz Thank you! These are all very good points. In reality, I haven't worked professionally yet in illustration (only in portraiture, which is a whole different thing) and I don't have any idea how to establish a going rate (maybe that pricing book)? But I like the idea of doing it for a price that the client would consider low, and then licensing it. Also because I think the channel's concept has a lot of potential, and so I would be happy to promote it!

    The reason I am assuming it's work for hire is that I am in Italy, where so much is done casually among friends. To do this with a contract, likely I would have to pay more to set myself up as a business (VAT tax number, etc.) than I would earn, which is a bummer, and that would put me under pressure to get more work immediately to make it worth it. I'm just now setting up my website and will hopefully be ready to go pro, or try to, by sometime next year. But I can inform myself here about the Italian side of things.

    Anyway, thank you for the tips! At least I have some idea how it should be done now.

  • SVS Instructor Pro

    @LauraA Always interested to hear how things work in other countries!
    Would you really need to do all that formal work simply to use a written contract?

    Let me offer an alternative -- what if the casual agreement among friends was that you would license the image for two years. See how it goes and then license it again for some other period of time? Would that work? Or in Italy is it generally understood that without a contract any casual agreement is a transfer/sale of the artwork?

  • SVS OG

    @davidhohn I understand it (i.e., this is just what I've heard people say casually), to go into business for yourself you have to do the bureaucracy to get a VAT number and then set yourself up with an accountant. This obligates you not only to pay an accountant, but also to make sizable social security payments even if you earn nothing. It's way more complicated than merely doing a schedule C, or even getting a business license in your home state and paying sales tax. I have done both in the US.

    I have always planned to "go official" when I was ready to work professionally, but I never considered that work might start trickling in in amounts too small to make it worth it. The initial hurdle is high enough that you might operate at a loss, not to mention the time lost. This is in addition to the usual problem of starting artists not making much to begin with.

    I honestly have no idea what all this does to contracts, but I would imagine that drawing up a contract makes you "official," and therefore subject to all the starting costs and bureaucracy. I should talk to an accountant.

    Don't even get me started on doing two tax returns. I love Italy but I'm not fond of the bureaucracy!

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