I run a small event hire business in a regional town. I provide AV gear, tables, chairs etc. One thing I don't do is large tents. People often ask me for these but I've avoided doing them as they're a lot of work, expense, liability, specialised knowledge etc. The problem is that I'm pretty certain I miss out on a lot of work for my equipment because I'm not a one-stop-shop. For example if someone hires a tent they're going to need tables, chairs, AV etc but my competitor in the next town half an hour away provides all that gear so I suspect that they supply a complete package & I miss out.
I have a good relationship with a company that just does tents in a different town about an hour & a half away. I sub hired them the other day for an event. I'm not keen on the sub hiring model though because:
-I'm liable if anything goes wrong e.g. tent collapses.
-I have to find the money to pay them in advance which could be a lot if the client doesn't pay or cancels last minute.
-The revenue I get from my gear is relatively small compared to the cost of the tent. Eg. I might hire $1K worth of gear but have to fork out $4K for the tent.
I've been thinking about an agency agreement where I list their tents on my website & get a 10% commission but the agreement for the tent hire part is still legally between the tent supplier & the customer. The benefits to me are:
-I get the customer so I can hire them my gear.
-I get a commission on the tent.
-I don't have the legal or financial responsibility for the tent.
The benefits to the customer over going direct are:
-Can deal with someone local for site inspections etc
-I have a better website
-I've got better AV gear (my specialty)
The benefits to the tent hire company are:
-Get new clients in a much larger town
-I do a fair bit of the sales work, site inspections etc
-The other company doesn't show up in Google local search (since they're too far away)
Has anyone had experience with agency agreements? Does this sound like a good idea or is it too messy?
I have a good relationship with a company that just does tents in a different town about an hour & a half away. I sub hired them the other day for an event. I'm not keen on the sub hiring model though because:
-I'm liable if anything goes wrong e.g. tent collapses.
-I have to find the money to pay them in advance which could be a lot if the client doesn't pay or cancels last minute.
-The revenue I get from my gear is relatively small compared to the cost of the tent. Eg. I might hire $1K worth of gear but have to fork out $4K for the tent.
I've been thinking about an agency agreement where I list their tents on my website & get a 10% commission but the agreement for the tent hire part is still legally between the tent supplier & the customer. The benefits to me are:
-I get the customer so I can hire them my gear.
-I get a commission on the tent.
-I don't have the legal or financial responsibility for the tent.
The benefits to the customer over going direct are:
-Can deal with someone local for site inspections etc
-I have a better website
-I've got better AV gear (my specialty)
The benefits to the tent hire company are:
-Get new clients in a much larger town
-I do a fair bit of the sales work, site inspections etc
-The other company doesn't show up in Google local search (since they're too far away)
Has anyone had experience with agency agreements? Does this sound like a good idea or is it too messy?
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