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Old 9th January 2008, 06:26 PM   #1
cjohnso5
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Default My Website Marketer Wants Commission

My website designer also does website marketing and is offering to do my website marketing if I offer him a commission on my product sales. What should I give him?

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Old 9th January 2008, 10:17 PM   #2
Karri
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0% ...

0% commission that is

I am in Internet marketing and would NEVER ask for a commission on sales following work I've done for a client. There are simply too many variables that factor into conversions. For an Internet marketer to lay claim to a percentage of your sales because he built you a website or optimized it or whatever seems rather presumptuous and actually a bit unethical.

Some questions that come to mind that you might want to ask:
  • And at what point down the timeline does the commission arrangement end?
  • Are his marketing activities a one-time project or ongoing?
  • What activities/tactics will be carrying out for you?
  • What if you advertise using channels / tactics NOT performed by your consultant?
  • Will conversions (sales) be carefully tracked so as to ensure you are not paying commission on conversions that were not a direct result of his efforts?
  • Is he the only one ever going to be working on your site, your brand, your presence with your target market?

Then again, I've not come across any colleagues using this practice so perhaps I'm missing something.

I guess I could see how he might charge a commission for pay per click and maybe email campaigns. (But again, I myself wouldn't feel comfortable asking for a commission.)

Interesting subject as I'm sure there are others out there who ask for commission. Anyone else run into this?

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Old 10th January 2008, 04:45 AM   #3
Logan
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I've worked on a percentage basis providing search engine marketing in the past.

Those are good questions to consider Karri. Based on my experiences, there isn't a specific number. I've worked on projects based on 2-3-5% and others that were in the 10-20% range. The amount of sales needs to be a consideration imo. As with my situations, I and the client had the best results in a <3% scenario - but we were able to get their sales from ground zero up to 250,000+ per month. Life was good.

The flipside - it becomes very difficult for someone to provide services if they are not making money.

Personally, if I was in your shoes ... I would shop for what the same services would cost you to purchase from others. Then propose to him you pay that much. If he does not accept that, and you really believe he is the 'one' ... then offer him a comparable percentage and an amount up front he can expect to receive for sure. For example, if it is a new site making no money ... how about paying him a flat rate that moves to a percentage once a certain sales level is achieved.

I'd be hesitant though, as a good personal relationship is vital in a scenario like this - and that isn't always common. Also consider, % should be based on net sales before tax, shipping and returns should not be included.

Big assumption I make - I am assuming ongoing services that continue to add value are always being provided in exchange for this type of relationship. It shouldn't be do the work, then sit and do nothing while enjoying the fruits of his/her labor.

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Old 10th January 2008, 07:29 AM   #4
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Default website marketing commission

The internet marketing results (notoriety, advertising, traffic) can't be majored in the volume of your sells as a fixed percentage.
I think that the commission is appropriate for the seller.

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Old 10th January 2008, 07:33 AM   #5
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If its constant work you should reward the sales person with commission. The actual amount depends what you are selling and what margin you are selling. If it's subscription based service and I should build up your subscription base sure I would like to have at least 50% of revenue.
If its just a product to sell with 30%-40% margin, I would ask 5% of revenue. Its a low because you are spending over 3% to payment gateway anyway who does not have any efforts at all for your business.
If its just setting your site up, I then find someone who does it for fixed fee.
Business is business.

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Old 11th January 2008, 05:36 PM   #6
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Quote:
Originally Posted by Logan View Post
... Based on my experiences, there isn't a specific number. I've worked on projects based on 2-3-5% and others that were in the 10-20% range. The amount of sales needs to be a consideration imo. As with my situations, I and the client had the best results in a <3% scenario - but we were able to get their sales from ground zero up to 250,000+ per month. Life was good.

The flipside - it becomes very difficult for someone to provide services if they are not making money.

Big assumption I make - I am assuming ongoing services that continue to add value are always being provided in exchange for this type of relationship. It shouldn't be do the work, then sit and do nothing while enjoying the fruits of his/her labor.
Good points, Logan ... I have honestly never run into a client wanting to pay me this way, nor have I considered asking. I guess it really depends on the situation and what both parties feel comfortable with.

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