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hey everybody Stephen T here I'm back I've been on the road for a while uh traveling everywhere I'm beat but hey I'm pretty excited today because I'm going to talk about how to get the highest royalty rate that's right now I know everybody people have asked this before how do I get the highest royalty rate well first of all I'm going to tell you that royalties royalty rates averaged about five percent that's right about five percent sometimes three percent of huge volumes and and maybe it's on consumables it could be three percent I've seen royalty rates as high as seven or eight so how to get those higher royalty rates that's what we're going to talk about today there's a couple things you can do now what I'm going to talk about our things that I don't really recommend but I know a lot of you guys really wanted to squeeze it a little bit so I'll show you how number one if you have a business selling the product your product and you have proven sales that's one way to get a higher royalty rate in fact people ask me all the time Steve you know you should I license I'm already selling my product or or maybe I'm a little tired of manufacturing myself I want to license that's absolutely fantastic I tell everyone if you've got proven sales that you can show a potential licensee right that you can show them hey I've been selling XYZ on Amazon or maybe a couple stores and this is what I've done you can get a higher royalty rate guess what because you've taken away risk really simple that's number one number two do a crowdfunding campaign now I like crowdfunding campaigns but I don't think everybody should start a business just because they've raised a little bit of money on a product and I don't think every product should become a business but I do think that you can use crowdfunding to show proof of demand that's right and I wouldn't set my numbers so high that I've got other people looking around and and maybe they're going to copy my idea I sent the numbers a little bit lower in fact I had one student that said there his goal for 10,000 units and guess what he got a licensing deal it was practical you know what it did it showed that potential licensee that people want it so that's one way to show proof of demand would I recommend running the crowdfunding campaign no I don't think you have to but there's some of you guys out there that want to do it to get a higher royalty rate that's one way the third thing is have a patent oh you're kidding me yes if you if your product is patented and it's pretty broad let's say you're going to get a higher royalty rate but should you run out and you know file a patent just for a higher royalty rate I don't think so but if you already have one okay there's a good chance you will probably get a higher royalty rate there you go there's three number four show a customer show the proof of demand from a retailer that's right if you can get to a buyer that look at your product and make sure it looks really good you guys you see if you can have let's say a 3d computer-generated graphic artists make your project look so good that people think they can buy it you can show to a buyer that's right show to a buyer and if a buyer likes it that shows interest that shows the man that shows that takes away a little bit of risk and guess what you can get a higher royalty rate for that now if you've done some other work too maybe you've got models and prototypes and CAD drawings if you've done more and more and more work you can most likely get a higher royalty rate but I'm here to tell you that's not what you should be focusing on I just told you how to do it but I'm also telling you all those things I mentioned to you cost money I would rather do this I've got to come up with a lot of ideas spend very little money and get an average royalty rate of 5% and then go on to the next project because I haven't spent the time and money and other things that maybe they'll pay off because I think it's a numbers game at the end of the day I truly do so I'm never thinking about the highest probably right now I'm thinking about minimum guarantees which we could talk about later and I think I have but I'm talking about an average royalty rate that's reasonable there you go there's the word reasonable so there you go I give you five examples of how to get a higher royalty rate the average is about five three if it's huge volumes maybe a little bit higher but hey guys be reasonable and just get those ideas the companies that's what you want to do is always a numbers game hey thanks for watching Stephen G here if you like this channel share it with other people please do that and subscribe down below we're getting close to 11,000 and it's all because of you guys thanks for watching this is Stephen key hi this is Stephen key and I just want to thank you for watching and fit right TV we're here to save you time save you money and show you how you can bring your products to market through licensing so 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