i do some small scale formulating for a handful clients. i always keep the IP. one of them has had some sucsess with thier product and wants to scale up. i dont have the capabilities so they want to buy the formula. i have no idea what to charge them. they paid $2500 for the formulation and then for each production. im happy to sell it to them but i dont know whats a good price. any advice please.
Comments
Cofounder & Chief Formulator
Indochine Natural
Ask for more 5,000 - 7,500.
Since they seem to be having some success with sales of the product, you may benefit more in the long-term from a royalty transaction.
You might charge say $2,500 as an upfront fee + a royalty of 5% on revenue from sales of the product, paid quarterly and subject to an audit of the company's sale so you can verify the royalty amount.
See website for details www.desertinbloomcosmeticslab.com
If they paid $2,500 originally to have the formula developed I don't see any great incentive to pay more than 4X to buy the formula outright.
See website for details www.desertinbloomcosmeticslab.com