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E-Commerce Proposal - Partnership

Opportunity to profit on anothers product with my expertise.

         

Swordfish

3:28 pm on Sep 19, 2005 (gmt 0)

10+ Year Member



I have an opportuntity to to profit on a product in the fishing industry that would be a perfect product in my popular fishign site.

The client can't afford to hire me to design a custom site to sell the product on his domain and then do the proper SEO mod work. It would just be too much for him.

I am going to propose to options to him.

#1: We sell the product in my store on my domain. Each product sold, I will fax him the invoice and he fullfills it and ships out. I write him a check at the end of the month for 75% of the earnings. 25% may not be enough for my time, but I want to make it worthwhile for him also.

#2: I setup the store on his domain and do all the seo work on my time. I like to his products from my existing site and have him write me a check for 25% of each sale. I would therefore maintain the site very cheaply maybe at $100 per month. With this option, he could potential give me the boot after a year or so of my hard work with the search engines.

Am I missing an option?

I am quite the expert to setting up stores and doing mod rewrite that I should be doing many more of these as side projects...

Swordfish

9:03 pm on Sep 19, 2005 (gmt 0)

10+ Year Member



nobody?

Peter Cornstalk

2:43 am on Sep 21, 2005 (gmt 0)

10+ Year Member



I would do #1 and would never do #2. If he wants a website, he should pay hard cash for it or do it himself.

If you do #2, you need to make sure you are the owner of the domain name. If you are to get 25% of ALL sales, you also need some way to ensure that you know about all sales and know about all sales inquiries so he can't make sales behind your back.

Morgenhund

11:21 am on Sep 21, 2005 (gmt 0)

10+ Year Member



> #1: ... I will fax him the invoice
If you send faxes yourself, you'll be fed up with this qiute soon; even if you automate this process you never know if he receives this fax or not. You'll have to call him each time to control -- a lot of work for 25%, unless you're selling profitable luxuries or so.

> and he fullfills it and ships out.
Never "outsource" shipping orders to your suppliers, unless they have an established logistics system. Otherwise, you cannot control it. What if a customer sends you an e-mail insisting the order is not arrived? You have to ask if they shipped the order. They probably not (they lost your fax), or they probably yes, but do not know it for sure -- no records left. Feel good, already? :)

> #2: ...
Same control problems as #1, but:
> he could potential give me the boot after a year or so of my hard work...
Hard work must be paid in cash, not in promises.

> The client can't afford to hire me to design a custom site to sell the product

I've met "partners" like this one. Most probably, he is doubtful if e-commerce returns his investments, and just looks for a cheap opportunity to try it. If he wants earnings, he must share risk. Else, you'll invest your work and he'll invest nothing.

I'd ask him to give me a stock of his products (if applicable) in terms of 30-90 days payment AND possibility to return unsold stock after 90 days. Then I'd fullfil my orders yourself and have full control and responsibility.

If you have troubles persuading partners, most probably the problem is not with you, but with partner. Do not spend too much time on them: try to look for somebody else, or just a different partnership type. For example, manufacturers are usually much more interested in selling their products that wholesalers or an owner of brick-and-mortar around the corner you're trying to persuade to step into e-commerce world.

PS: All based on my expirience.

[edited by owner]Spell checking[/edited]

flyingpylon

3:51 pm on Sep 23, 2005 (gmt 0)

10+ Year Member



I've had similar thoughts about selling products via the web and wondered if some kind of consignment arrangement would work. Take an inventory of product, try to sell it, and if it sells, pay the supplier. Obviously since you would be reducing your risk, your profit would need to be lower compared to standard wholesale/retail rates to compensate. Big suppliers probably wouldn't go for it, but it seems like smaller ones might.

For me, this would be more due to the fact that I don't have a lot of cash to invest in inventory, especially when I have no idea if it will ever sell. Your situation is different, but the end solution might be the same.

I agree that you should retain control of the order processing and shipping process if at all possible. Customers will associate their experience with your site, not with the supplier, and it's important that you control that experience.