I'd go for a flat fee. Two reasons...

One is he probably won't sell as many as he thinks he will.

Second is his accounting proceedures will probably be different than yours.

Keep it simple and just charge him a flat fee.

My two cents.

I tend to agree with Dan, there's no accurate way to realistically keep track of how many imprints your buyer would be selling.

Price the work high enough to take into account your labor & SOME of the potential lost income from royalties.

And I had a horrible experience in trying to sell art for tattoos--beware that world is full of big talkers!

I think that Dan is giving you good advice. There is a difference in the accounting procedures. Some royalties are based on quantity sold and some are based on quantities produced.

The vendor will indoubtably vie for the quanties sold because the pay back to the artist is based on the monies he actually has. The artist will, on the other hand, want to base the royalties based on the number of tattoos produced.

If you feel that this idea could really take off, that there is a real market for them, and you are willing to share some of the risk with him, go for royalties. If not, then opt for the flat fee.

personally, I would opt for the single payment for the artwork. It will, invaribly, save a big headache and lots of accounting argument nightmares later.