Royalties are easy to do, I have done many over the years.

You simply agree of a number per unit of sales. A penny, nickel, dime, dollar, etc.

I had several based on usage, these were rental tools that we had patents on and all companies hd touse our equipment to set numerous tools downhole in an oil well. Every time they set a tool they kept tract of the usage and paid us based on each setting of a tool. we got paid each quarter and if they damaged or lost a tool, theywere given a discount off of the list price.

The end result is based on unit sales or usage depending on the application of the equipment.

The inventory was reported once a year, depending on the initial agreement.