I've not had experience with licensing flat artwork (except for notepads ), but did license 3 dimensional artwork for over 15 years. Licensing is definitely based on trusting the company you are with. And of course you already know that it takes 1,000's upon 1,000's of units being sold each month to amount to any money to speak of.
And then again royalties are based on the PROFIT.... the question is always how does a company come up with the PROFIT to calculate your royalties... if you ask, the answers you get are normally pretty vague.
Because it's never as cut and dried as saying... the item retails for $10...wholesales for $5... so you get 5% of the $5....that's just not how it works... there are lots of costs that come out of that $5 before you get your 5%..... and it's different for every company you license with. When all costs are deducted you might very well be making only 5% of $1.00.
And so when they start discontinuing one of your items and mark it down... you might possibly NOT get any royalties because according to the company they are NOT making any PROFIT.
There is money to be made from licensing... but, it's definitely not "get rich fast" like most think it will be.
Good Luck With Your Licensing... I do hope that your royalty checks GROW!!
Sonja/Funked Up Art