What is the best thing to do when a client wants to own rights to and possibly resell an application a vendor develops? Is it customary to charge double or thriple the normal rate (the rate if the vendor owns the rights). We've heard to charge the client more if they want to own the rights to the code and resell the program.

Any thoughts, advice, experience?

stetsonbu

Based on our seller programs, our resellers usually own the rights to resell our products rather than to the software codes.

But I think double or triple rate is acceptable for owing the code rights.


KingMarsh

eLearning Consultant

Wonderful! Thanks for sharing your experiences KingMarsh!

As you probably already know...per copyright law if you create an application exclusively for a client as "work for hire" they are the owner/author of the product. You have no other claims. They may do as they wish.

Your can attempt to negotiate a royalty or licensing agreement with the client...however, many don't care for that level of continuing relationship. I have no idea what sort of tiered pricing structure is appropriate...but would imagine there is a premium for custom work, particularly when the intent is to generate future revenue. So you can try to get at those revenues all at once (higher delivery fee) or overtime...lower delivery fee w/royalties.

Of course, if it sounds like the application is something others would really like to have...you can always develop/market the application yourself....and build a licensing agreement with those clients that might want to resell.

Thanks Verite!

We decided to negotiate a partnership (royalty option) with the client as this was determined to be the best solution with a higher initial development cost.