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Closed a rev. share deal

Now what?



8:21 am on Aug 24, 2002 (gmt 0)

10+ Year Member

Thanks to some of the valuable suggestions by members here, I talked with one of my existing clients on phone a few moments ago and he agreed to launch a new site on revenue share basis. I have to go and meet him and discuss the specific details. I would welcome suggestions and inputs members here feel that should be worked out properly and discussed at the initial stage itself.


5:44 pm on Aug 26, 2002 (gmt 0)

WebmasterWorld Senior Member agerhart is a WebmasterWorld Top Contributor of All Time 10+ Year Member

Congrats Web_India!

Can you give us some more details as to what information you are looking for?

How to work out production? Contracts? Payments?


5:56 pm on Aug 26, 2002 (gmt 0)

10+ Year Member

yes, I wanted to know all the details like what % of the sales is a good figure to quote and other specifics, since this is the first one I'll be working on rev. share basis so that I don't miss on anything and regret later.


6:56 pm on Aug 26, 2002 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

Congrats web_india!

Are there affiliate programs already running in the same industry? You can check to see what kind of commissions they receive. If it is electronics, the margins are much thinner than, say, psychic advice. Also, make sure you get all details in writing including payout scale, pay periods, payment terms, notice of agreement termination, etc...



7:14 pm on Aug 26, 2002 (gmt 0)

10+ Year Member

travoli, thanks for the inputs.

Actually, it's related to women apparel and accessories. I am not much aware of many related popular affiliate programs, at least here in India.
Also, I haven't yet had any talk to the client regarding any written agreement, actually he's an old client of mine and we are working together for the last two years and so far haven't faced much problems.


7:55 pm on Aug 26, 2002 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

I try to run the commisions pretty close to what the existing commisioned sales reps get. It's a good starting point.


8:00 pm on Aug 26, 2002 (gmt 0)

10+ Year Member

Try to shoot about 10% above what you think you can get. You can always drop your price later but it is much harder to raise it after the work has started.

If the standard affiliate commission is 10% I would shoot for at least 15-20%. The margin on the products you are promoting is probably somewhere around 25-30% so that should be a workable deal for your customer.


10:26 pm on Aug 26, 2002 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

Make sure you get down on paper all the deliverables on both sides and put in place the contingencies for loss of revenue in case of problems created by the other party.

Make sure you both have access to the joint clients (in case things go sour).

Make sure you both have access to the stats of the site.

If you are going to be partners, I'd suggest that 50% each of the net profit (i.e. after the cost of producing the goods and shipping etc..) would be fair, but it really depends on what you are bringing to the table.

We get approached by companies looking to do the revenue share thing and insult us by offering the same rate they offer affiliates, this doesn't sound like it's an affiliate scheme so don't let them treat it as such. My advice on the percentage is to have 3 levels.

Ideal - Best deal for you
Walk Away - Don't do the deal for less
Win-Win - The deal sits right with both parties

If you are promoting the site, don't let them think they hold all the aces, without your skill they have a pile of apparel sitting gathering dust.


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