Commission for managaing and marketing a client website

[DomainM]

Hi,

I'm looking for some guidance, I have a client site with an established business within a niche but competitive retail sector. The client has a positive reputation and as such they wish to expand their business online by selling items via a branded retail site.

The site was developed some 18month ago, but unfortunately due to the company's lack of in-house personnel the website has yet to be launched. The company owners have asked me to help as they have little time to dedicate to maintaining their own site.

I have offered to maintain and market their website based on a commission of all sales minus PayPal/Protx costs.

With work required to include ongoing design, product updates and search engine optimization what level of commission would be seen as reasonable? I have indicated an initial figure of 20%, is this fair?

 

[retired_member21]

It just depends on the product (for me)

Amazon charge a massive 20% on home furnishings etc on their site, the total order value including vat and delivery. We couldn't live with that - it wasn't feasible.

If you are coding the site yourself (and coding a DB/cms etc) - you should propose a cut of the net sale price and build this into the CMS for your customer - e.g. before tax/delivery - as this (as a retailer) would be a more attractive proposition.

I was approached recently similar scheme - 10% of net sale value (exc vat/delivery) and it would've worked out well for them (as our average order val probably 200-600) just they had some negative rep on the internet but I was very close to going with them.

10-20% is a good figure, but as mentioned above, of the right figure

 

[DomainM]

Thanks Nick.

The client is within the furnishings sector.

The only issue I could see is that they've already paid me to develop the website (believing that they would manage the site in-house via a Magento install).

Its good to know that Amazon charge 20% as this gives me a good reason to charge the same figure especially as our agreement would also allow the client to further enhance their own brand and encourage shoppers to their own physical retail outlet.

 

[retired_member21]

The only issue I could see is that they've already paid me to develop the website (believing that they would manage the site in-house via a Magento install).

They are either going to have to pay someone in-house, or someone like yourself and if they are already running a busy furniture company would probably most likely prefer their developer to maintain the site as there's already a trustworthy relationship there.

As I said it was far too expensive with amazon - it kills most profit so I wouldn't recommend charging the same as them/same model unless you can make sure their profits remain good enough.

If you get the right amount with them now, they may be less likely to want to change it in maybe 12 months when they could start picking up more online sales (basically they will be more likely to keep you on instead of investing in a new/cheaper ongoing system for themselves)

 

[DomainM]

I believe the issue is that they don't have an internal developer or any IT.

So the option for them would be employ someone in-house (unlikely as they don't know when they'd see a return), try and maintain the site them self's (also unlikely as they've been unable to do this at any point over the last 18months) or employ my services.

I'm having a meeting with them next week so should find out more.

 

[retired_member21]

Sure - as I mentioned though our problem was that our costs for delivery on some items were around £80 per product - but we only charged/advertised it on the site as £19.99 or free over a certain amount to entice a sale. Delivery is an item which most companies don't make that much on, but can seriously cripple if you are charging them on a %

Good luck with them - hope it goes well

 

[expertc]

...
With work required to include ongoing design, product updates and search engine optimization what level of commission would be seen as reasonable? I have indicated an initial figure of 20%, is this fair?

I do that regularly in B2B as a consultant. My advice to you – forget about commission, this is not a good way to talk to companies. Have your hourly rate and work on that basis. Otherwise you are most likely to lose the client. Just thoughts…

 

[namealot]

Firstly how high does the site list…? You need figures projected online sales, percentage of return customers, do they do promotions monthly, yearly, what's there marketing strat are they also promoting the site, sales patterns, trade shows, do they have stores , delivery area, How often do they bring out new lines… Not many people buy home furnishings without seeing or using first so would they buy cold online... If they purchase instore you get nothing.. What about return customers is the company sending out brochures telling them to buy online ? your commission compared to the work could be poor.

Some companies sell home furnishings online but the vast majority of these do not have UK outlets or are well known...?