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10 Reasons why you should sign a Royalty Sharing Agreement

Signing an industry standard 4 percent royalty share agreement for your SolidWorks CAD modeling services can offer several benefits for both the service provider and you as the product design requestor. Here are some reasons why you should consider entering such an agreement:

  1.  Cost-Effective Solution:
    • Traditional CAD modeling services often involve significant upfront costs for clients. By opting for a royalty share agreement, your product design requestor can access your high-quality SolidWorks CAD modeling services without the need for substantial initial payments. This makes it a more cost-effective solution for them, especially if they are on a tight budget.
  2.  Risk Mitigation:
    • For product design requestors, a royalty share agreement shifts the financial risk to the service provider. If the product design project does not generate immediate profits or faces uncertainties in the market, the client is not burdened with high upfront costs. Instead, they share the financial outcome with you, aligning your interests.
  3.  Access to Premium CAD Services:
    • Your clients can benefit from your expertise in SolidWorks CAD modeling, which might be challenging to find elsewhere. The 4 percent royalty share allows them to leverage your skills and experience without having to invest heavily in expensive software, tools, and ongoing training.
  4.  Incentive for Quality Work:
    • A royalty share agreement creates a direct link between the success of the product and your compensation. This serves as a powerful incentive for you to deliver exceptional SolidWorks CAD modeling services. The better the design, the more likely the product will succeed, and both parties benefit.
  5.  Ongoing Support and Updates:
    • Maintaining and upgrading CAD tools and software requires continuous investment. By opting for a royalty share model, your clients ensure that you have the resources to keep your tools up-to-date and maintain a high standard of service. This indirectly benefits them by receiving designs created using the latest technologies and methodologies.  Retrieving CAD files archived by the designer is most important.
  6.  Long-Term Partnership:
    • A royalty share agreement fosters a long-term partnership between you and your clients. Both parties have a vested interest in the ongoing success of the product, creating a collaborative relationship that extends beyond a one-time transaction.
  7.  Flexibility in Cash Flow:
    • For startups or businesses with limited resources, a royalty share agreement provides flexibility in managing cash flow. Rather than paying a large sum upfront, they contribute a percentage of profits as they are realized, making it easier to allocate resources strategically.
  8.  Market Feedback and Adaptability:
    • As both parties share in the success of the product, there is an incentive to adapt and refine the design based on market feedback. This adaptability can be crucial for product success, and the ongoing relationship allows for continuous improvements.
  9.  Future On Call availability:

    • Entering a royalty share agreement provides you and I the flexibility to design new ideas that might emerge and to be ready in the future, as the ongoing success of existing projects ensures a sustainable income stream.
  10.  Reduction of hourly rate:
    • Agreeing to a royalty share enables me, as the designer, to decrease my hourly rate from the industry standard $240 to a reduced $80 hourly rate, as the potential for long-term earnings through the product’s success compensates for the immediate reduction in upfront fees.

In summary, a 4 percent royalty share agreement offers a win-win scenario, aligning the interests of both parties and providing a cost-effective, collaborative, and sustainable approach to SolidWorks CAD modeling services.

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