I would say this is an opportunity. Charge a percentage for the thing. Some people might freak out when they realize you charge, but it shouldn't be a big deal if it's cheap. I would keep it under ten percent, but over one percent. Art is something that should be shared, but if you do it for fun, it can't hurt to get some cash for it. If you do it for the money, then it should help you with your personal finances.

Of course, this is completely opinionated. I have no idea about your personal finances or anything. You can completely disregard what I say if you don't agree with it.

To make a long story short, I designed some creature art that people seem to be quite fond of. I see characters and renditions of them frequently.

However, as flattering as it is I was approached on the curiosity of if they could sell their original character version based on my creatures on mugs, posters, shirts and the like. I'm unsure whether I should charge a percentage of every sale, or simply ask for a free item of everything they plan on selling?

I don't want to look like a money hungry jerk and am afraid to loose future relations if I ask for a percentage. What do I do?