Contract for Royalties Resulting from Copy?

[Dexx]

Hey Gang,

I've heard multiple times about copywriters receiving an initial payment, and then a percentage of the profits generated from the copy they wrote -- for as long as it is used by a client to generate sales -- but I can't seem to find a recommended resource (or template) so base such an agreement off of...

Does anyone know where to a good royalty agreement for copywriting projects (I'm going to be doing a series of follow-up letters for a Chiropractor and want to build this in).

Has anyone ever had issues with royalty payments not being paid as they should?

[Danielle Lynn]

Originally Posted by Dexx

Hey Gang,

I've heard multiple times about copywriters receiving an initial payment, and then a percentage of the profits generated from the copy they wrote -- for as long as it is used by a client to generate sales -- but I can't seem to find a recommended resource (or template) so base such an agreement off of...

Does anyone know where to a good royalty agreement for copywriting projects (I'm going to be doing a series of follow-up letters for a Chiropractor and want to build this in).

Has anyone ever had issues with royalty payments not being paid as they should?

Hi Dexx,

Be careful when doing a royalties arrangement with an individual. It's generally not recommended unless you're working with a company because it is very easy for individuals to 'forget' to make payments or not calculate them correctly. On the other hand, companies have departments dedicated to tracking, managing payments, and sending out royalty checks.

That being said, if you want to go forward with it, create a standard contract, then outline the royalties as part of the payment area. Make sure you clearly state how much you will be paid (what % of the profits), when you will be paid (at the end of each month, each week, bi weekly), and I recommended adding a system for you to be able to view for yourself the sales (at each royalty payment due date, you sit down with your client and they show you the %.)

Will the letters be emails or physical letters? The physical letters will be harder for you to track, you'll have to rely on their word.

Again, just keep in mind that royalty contracts wont always hold when working with individuals, so proceed with caution.

Best Wishes,
Danielle

[Dexx]

Hi Danielle, thank you so much for the detailed response!

So would you recommend that I just charge an appropriate fee that I would be satisfied with -- knowing that I won't receive any future payments no matter how much business they copy generates -- and with no "terms" as to how long they can use the copy for?

Or would it make more sense to "license" the copy out for an annual licensing amount that allows them unlimited use of the campaign during that year?

~Dexx

[Danielle Lynn]

Originally Posted by Dexx

Hi Danielle, thank you so much for the detailed response!

So would you recommend that I just charge an appropriate fee that I would be satisfied with -- knowing that I won't receive any future payments no matter how much business they copy generates -- and with no "terms" as to how long they can use the copy for?

Or would it make more sense to "license" the copy out for an annual licensing amount that allows them unlimited use of the campaign during that year?

~Dexx

No problem Dexx

Yes - I would highly recommended just charging the full amount that you feel is fair, because with individuals (even well meaning one) it's too easy for royalty payments to fall through the cracks.

If I had to choose, I'd charge the full amount and let the client keep the rights to it.

From there, I'd offer a small optional monthly maintenance fee (to tweak, refresh the copy for improved performance.)

If you go with "licensing," build it on the terms that when they renew it at the end of the year - you'll do a 'update/refresh' of the copy. That way it benefits both you and your client.

Bottom line, when working with individuals and small businesses, because of the nature of small business, it's easier for both parties if you charge the full amount upfront.

Glad to help
Danielle

[Loren Woirhaye]

Unless you're dealing with a significant direct response company,
whether or not your deal pays you as you've agreed is pretty
much a matter of your client's sense of honor.

No contract is gonna prevent a person who decides to screw
you from doing it. You might ask for names of suppliers the
client buys from. Call them and ask if the client pays on time.
Straight dealings with suppliers is a good indicator not only
of meeting agreements, but of some degree of positive command
over the cash flowing into and out of the business.

[David Raybould]

Dexx-

Check out John Carlton's freelance
copywriting course "The Freelance
Course".

There are very useful sample contracts
in there.

Also, the trick to charging royalties
as well as an up front fee is to make
sure you're happy enough to do the
job for the initial payment alone.

View the royalties as gravy.

Don't let them become your bread
and butter, unless you want to
spend most of your life on the
phone chasing people for checks.

Good luck with it.

-David Raybould

[Dexx]

Originally Posted by Loren Woirhaye

No contract is gonna prevent a person who decides to screw
you from doing it. You might ask for names of suppliers the
client buys from. Call them and ask if the client pays on time.
Straight dealings with suppliers is a good indicator not only
of meeting agreements, but of some degree of positive command
over the cash flowing into and out of the business.

You know that's actually a great idea, even just as a general rule for accepting new clients, getting a "background check from references."

Might try that! Thanks!

~Dexx

[Dexx]

Originally Posted by David Raybould

Also, the trick to charging royalties
as well as an up front fee is to make
sure you're happy enough to do the
job for the initial payment alone.

View the royalties as gravy.

Don't let them become your bread
and butter, unless you want to
spend most of your life on the
phone chasing people for checks.

Y'know, I have that business philosophy when it comes to doing marketing projects for clients, and didn't even think to apply that towards the royalties aspect.

Thanks for refreshing my perspective!

~Dexx

[Bruce NewMedia]

Originally Posted by David Raybould

Also, the trick to charging royalties
as well as an up front fee is to make
sure you're happy enough to do the
job for the initial payment alone.

View the royalties as gravy.

This is very good advice.

Dexx, I've done upfront money with backend royalty deals.
But, its always been with fairly long established clients - people I knew well.
I trusted them to do the right thing, and they always have (knock on wood)
I used a simple faxed letter outlining the deal arrangements. That was all.

With a new or unknown history client, I'd be more careful. That's why getting
customary fee upfront, and viewing any performance payments as a bonus is
a good way to look at.
_____
Bruce

[John_S]

No contract is gonna prevent a person who decides to screw
you from doing it.

Sounds like a entrepreneurial opportunity for a savvy hosting/billing service specializing in JV ....oh look ... a new gimmick (gotta run.)