A costume design business can operate on a commission or flat rate structure. In a commission structure, the designer or sales-person receives a percentage of the amount of the sale. In a flat-rate fee structure, the designer identifies a flat-rate for each piece she produces. Below is a discussion of the two options and their benefits and drawbacks.
Being paid by commission is impossible to maneuver if you are a sole-proprietor. Because you will be paid a percentage of the price of the garment you produce, the sale itself must be brought in by another individual. The sale will, in other words, have been made by someone other than yourself, but you will then be offered the job of producing the costume. Typical commission rates fall between 10-20%. Therefore, you can negotiate the amount of commission you will charge individually for each costume.
The Benefits of Commission
One of the benefits of commission is that you are not responsible for selling your work. Basically, after establishing yourself with a few groups that typically require costumes or with someone else in the costume industry, such as another designer, your work can typically be completely focused on making the costumes.
Additionally, you will be able to set the amount of your commission. If you feel that the business is good and may result in the client returning to you in the future, you can charge less commission. If, however, a costume is particularly intricate or a one-time creation, you can charge more commission to make its production worthwhile.
The Downside of Commission
The downside of receiving a commission for your work is that you are not receiving the full payment of the costume. Rather, you are sharing in the profits. While this may be suitable since you are not in charge of making the sale, it does mean that you are making less income. Moreover, you are not paid up front, but rather have to wait until the entire payment is made for the costume before receiving your percentage. Additionally, there is no guarantee that you will receive any business. Since you will be dependent on a salesperson for your work, you may find that you are not, in fact, making any money.
A flat rate fee is when you establish a flat rate for your work. It can be based on the number of hours of work you put into making the costume, the size of the costume or any other factor. This rate is typically not flexible and applies to all costumes you make.
The Benefits of a Flat-Rate Fee
The main benefit of a flat-rate fee structure is that you can count on the amount of money you will make for each item. While there might be slight variations in the amount of money, for example if a costume take a shorter time to make than you expected, you will still have an idea of the amount of money you will make for a particular piece.
The Downside of a Flat-Rate Fee
A flat-rate fee, however, can mean that you put in much more work than the amount of money you earn. A flat-rate fee would stay the same no matter how many hours of work you put in. Therefore, if you work for twelve hours on a rather simple costume, you will earn the same amount of money when you work for twelve hours on a costume that you can only be hand-sewn.