How much to charge for royalties on a product? Or no royalties at all--full payment up front?

Question

My husband has invented a product. He is meeting with a national distributor tomorrow who is interested in purchasing the patent, and taking the product in for his production, and industry catalog sales. This guy is looking at possible 3-5 mil in profits if it is sold for the price that my husband has been selling it for the past three months.

We would like to sell to this man. How do we decide on a price? The potential buyer has mentioned an initial payment, and then royalties per unit... or perhaps, royalties based on gross sales?

Can someone help us figure out how to handle this, please? We could possibly make hundreds of thousands.... or make a mistake by hundreds of thousands!!

Thanks for reading and thinking!

Answer 1

If you're going to be making a potential hundreds of thousands of dollars, it would be well worth the money to pay for some advice from a real lawyer, instead of from a bunch of random strangers on the Internet, no matter how well-meaning we might be.