Royalty rate
Royalty rate: A royalty rate is the percentage of net sales (or per-unit fee) a licensee pays a licensor as compensation for the right to use the licensor's marks, characters, or properties on a licensed product. The rate is set by the licensing agreement and may vary by product category, mark type, sales channel, or volume tier.
In licensed apparel, royalty rates typically range from 8% to 20% of net sales depending on the licensor and product category. Premium properties (major-tournament golf, top-tier collegiate, major leagues) carry rates at the higher end; broader-licensed marks tend toward the lower end.
A royalty rate of 12% on a $40 jersey with $4 of allowed deductions yields $36 net × 12% = $4.32 in royalty owed.
Related glossary terms
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