Royalty rates will vary widely, based upon demand. Toy companies often pay for exclusive rights to utilize a popular image. The dollar amount paid for the top properties can be staggering, plus, there may be many demands placed upon a licensee for performance, advertising, etc. Licensee are limited to a very narrow and specific product or product category. Companies seek brand identities as they do character or images for their ability to have immediate public awareness and appeal.
Companies often add a popular identity to their product instead of expending money advertising.
Payment is typically based on the wholesale selling price of your item. Many inventors tell me that they want to license their invention to as many different companies for as many different applications as possible. Many companies try to turn their products into character or trademark licensing opportunities. This means a company licenses their product, company name or logo to another company or manufacturer for a specific item or application.