how much comission should i charge?

[thinkingbig]

Hi

I am on the planning stage of my idea and need to get the most important thing sorted out- comission. I need around 100 clients on my site, everything on one theme centralised. Each purchase will cost around $15 for the customer. Would a 10% comission be alright to ask for, making it me earning $1.5 per sale of a $15 item?

Also, should i ask for a monthly fee (maybe $20) because i will be advertising their brand and other associated products on my site?

any help is appreciated

cheers

 

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[blackraven]

I guess it depends on what you are selling! A 10% commission on a physical product is about normal, if it's a digital product then 10% is terrible!

 

[thinkingbig]

mine gives a code which gives access to a physical product, so should it be higher or lower than 10%?

cheers

 

[eloise]

Tell me more about what you are doing!! I do think 10% is fair if you are selling a product. And if they are using your site, I think a monthly fee is fair too.

 

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[Chris W]

If I understand this correctly you are making a website that offers advertisement for business owners to market their product?

If so then 10% commission seems fair to me.

Look at it like this.

You are getting people to buy their product. Without you, they would have never gotten that sale on the item. The seller gets profit from the sale, the buyer gets the item they wanted, and you get a small commission for making the deal. So pretty much it's a win-win-win situation.

As for the monthly fee, I would hold off on that unless your website is getting a lot of traffic. Your cliets will be much more willing to pay $20 a month if it's a well established website that is showing great results then if it's a new website with no traffic.

Hope this helped,
Chris W.

 

[thinkingbig]

would a 15% commission and no monthly be alright?

The difficult part will be convincing all the clients to take part in my site. I am planning on offering free 1 month usage, whereby i do not take any commission for sales in the first month. Hopefully, that helps

 

[Chris W]

Giving one month free is a good idea but you have to remember that if their product doesn't sell to their expectations then after that month they are going bail and you will be left with nothing.

As for the 15% commission, it all depends on how effective your service is. If you're just getting them a few sales that they could have easily gotten without your service then they won't go for it. But if you are netting them a lot of sales, then they will be making enough profit for them to afford paying you a 15-20% commission and possibly even a monthly fee. The more sales they get, the more commission they can offer you.

You have to look at it like this. You are offering a service. If your client's aren't happy, you won't succeed. Just develop a helpful service and the money will come with it.

Hope this helped,
Chris

 

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[thinkingbig]

hey thanks for the quick replies Chris.

Was wondering, if there was downtime in my business, what reason would they have to bail. I will only be taking commission from them for a sale plus advertising their business. It is not like i will be taking an initial monthly fee.

cheers

 

[biophase]

Can you explain the money flow?

Does a customer come to your site, get a code, buy from another site and then the site owner sends you $1.50 via paypal?

 

[Chris W]

Sorry, I overstated when I said that they would bail. If I do have a correct understanding of your business idea (which I may not) then this is what I think could happen.

The client may not bail but if they don't see good enough results then they may feel like they can market their product better and get the same customers but not have to pay the commission.

They may still leave their product on your website for you to advertise for them to get a few extra sales here and there but the bulk of the customers will be going directly to them which in turn will take away from your sales and commission.

So basically you will just be advertising for them without making much commission from it.

Hope this clears it up,
Chris W

 

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