What an artist royalty actually is, and how to compare one

A percentage of what?

A royalty is always a share of something, and platforms differ on what that something is. Some pay a share of the full sale price including shipping. Some pay a share of the sale price after the base cost of the item is deducted. Some pay a fixed sum per unit regardless of what the item sold for.

These produce very different outcomes on the same sale. A large percentage of a small remainder can be worth less than a small percentage of the whole. When you compare, work out what one actual sale of one actual product pays you, and ignore the headline.

Markup royalties versus share-of-margin royalties

There are two structures in common use. In a share-of-margin model the platform sets a price and gives the artist a slice of the profit, which means the artist and the platform are pulling against each other on every rupee.

In a markup model the platform charges its normal price for a plain product and adds the artist royalty on top. The customer buying a design pays more than a customer buying a blank one, and the difference is the artist's. Nobody is dividing a fixed pot.

ePrintSmart uses the second. The royalty is twenty per cent of the goods value, added above the plain price rather than carved out of it. It is why the rate can be what it is without the printing being squeezed.

• Share of margin — artist and platform split one pot
• Markup — the royalty is added on top of the normal price

Before or after tax

In India a printed product carries GST, and a royalty should be calculated on the goods value rather than on the tax. Paying a percentage of a tax-inclusive figure means part of what you are paid is a share of money that was always going to the government.

Our royalty is worked out on the value excluding GST, so the percentage describes the goods and nothing else. It is a small distinction that becomes a real one at volume.

When you actually get the money

A royalty that appears in a dashboard is not the same as a royalty in your bank account. Ask three things: when does an earning become payable, how often are payouts made, and what happens if the customer returns the item.

Here an earning is recorded when the order is paid, and it is settled monthly. If an order is refunded, the earning is voided and the reason is shown to you rather than the row quietly disappearing — an artist who saw a sale appear deserves to see why it went away.

Tax, briefly and honestly

Royalty payments to a resident in India attract tax deducted at source. The rate is lower when a PAN is on file than when it is not, which is the practical reason to add yours before your first payout rather than after.

Beyond that, whether you need to register for GST and how you declare this income depends on your total earnings and your situation. That is a question for a chartered accountant. We can tell you what we paid and what we deducted; we cannot tell you what to file.

How to start

Everything runs through one place. Artists sign in at the artist studio, upload work, choose which products each piece suits, and see what they have earned. Customers browse the artwork, pick a design, and choose what to put it on.

Nothing about it is exclusive. You can sell the same work elsewhere at the same time, and there is no listing fee and no minimum.

• Apply with three pieces so we can see how you work
• Choose which products each design belongs on
• Get paid by bank transfer on what sells

Common questions