First things first: No one gets rich designing typefaces. In fact, until recently, designing typefaces was a pretty good way to lose money. However, both technology and the democratization of typography have made typeface design a fairly decent way to earn a buck.

THREE POTENTIAL STREAMS
There are three ways to make money designing type:

•    Revenue from retail font sales

•    Royalties from Original Equipment Manufacturer (OEM) licenses

•    Payment for custom typeface design projects

Retail font sales revenue can come either in the form of royalty payments from font foundries such as Font Bureau or Linotype, from font resellers such as Fonts.com or MyFonts.com or—if you choose to market and distribute the fonts yourself—from direct sales to graphic designers and other font consumers.

OEM business licensing can also be a source of revenue. In this arrangement, software or hardware developers license your typefaces to be bundled with their products. Although this model was limited mainly to operating system and software application developers and printer manufacturers until a few years ago, there are now hundreds, maybe thousands, of opportunities for OEM font bundling. Cell phones, PDAs, heads-up displays in automobiles, digital cameras, games-any place textual information is displayed-now provide opportunities for font licensing.

Finally, designing fonts as part of a custom typeface design project can yield a one-time payment. More and more companies are commissioning custom typefaces for their exclusive use. In fact, demand for custom typefaces is so high that many independent typeface designers are doing more custom work than on spec designs for retail sales.

LET'S TALK MONEY
Let's jump to the bottom line: What can you expect from your talent and hard work as a designer of typefaces?

Prices for retail fonts range from free to more than $80 per font. The average price is about $30. If you sell directly to end-users (graphic designers and others who use the font for their own purposes), you keep all the money. If the font is distributed through a foundry or online font reseller, you keep between 10 percent and 70 percent of the selling price. Granted, this is a wide range, but there are a number of variables when a font is sold through a foundry or reseller. First, fonts can be sold on an exclusive or non-exclusive basis. Non-exclusive deals are usually with font resellers and online distributors such as MyFonts.com or Fonts.com that can also distribute your fonts. Font resellers generally allow the font provider to set the price of the font and to keep a percentage (from 30 to 50 percent) of that price for their distribution services. A few distributors also sublicense fonts to other font sales outlets. In these instances, the original font provider receives a percentage of the revenue that the distributor makes. So, for example, if the distributor sells the font directly to end-users for $25 and pays a 50 percent royalty, you make $12.50. If, however, the distributor sublicenses the font and allows the sub-licensor to keep 50 percent of the sale price, you would make only $6.25.

An exclusive arrangement usually means that a foundry, such as Monotype, FontFont or Font Bureau, has licensed the type-face. In some cases, this implies that the foundry controls all sales of the font. In others, it means the foundry has exclusive distribution rights, but you may still sell directly to end-users. Generally, the royalty for exclusive arrangements (from 20 to 50 percent) is lower than non-exclusives because the foundry makes a large investment in the development, release and ongoing marketing of the font. Although rare in the current economy, exclusive typefaces may also earn advances against royalties. Advances, when they are available, usually range from $500 to $2,500 per alphabet. In some cases, however, advances against royalties can reduce the amount of royalty provided. For example, a foundry may offer a 25 percent royalty for an exclusive design with no advance, and a 15 percent or 20 percent royalty for typefaces that have been paid an advance against royalties. As recently as four or five years ago, foundries also offered one-time production fees in addition to royalty payments. Unfortunately, these niceties have gone the way of VCRs and film cameras.