[Jewelry making - Article 00466] - Re: [Orchid] Design royalties

[Neilthejeweler]

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    I don't know beans about royalties. But I do know how deals should
    work. 

>     they shall have an infrastructure to get it manufactured all
>     subsequent orders will be processed via the designer. given me 2
>     options for the payment plans: 

    Based only on what I read here it appears they will be doing the
    marketing and actual production while you handle the orders. So who's
    being paid a royalty here? Are they buying your design or are you
    paying a promotion fee? If they manufacture do you still retain
    artistic control? What happens when things go wrong with orders? Ex.
    you get a lot of orders but the co. can't keep pace. Now you're
    (maybe) dealing with irate customers but possibly have no control
    over production. Who gets the bad name? 

    You need a clause that permits both of you to audit. Without that
    audit there is no way you or they can be sure of what is due to
    either party. Who initially receives the customer's money? When is
    payment between you and the co. made? What about returns? 

    This a business that has zero track record. You would be wise to
    obtain credit reports and background on the principals of the new
    company. 

    How long is the term of this contract? Can you renegotiate royalty
    rates and payment arrangements later on if you find you're being
    short shrifted? 

    Ask them for a sample contract and tell them you'll have it
    reviewed. If they ask you for money to write a contract let that be a
    warning signal. 

    There will many more questions once you see what the deal truly
    entails. 

    Ok, I've been the pessimist. But this kind of a deal might be real
    sweet if it works.
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