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Commission based web/marketing development.

I am currently taking on a guy I like who is young and excited to work in an arrangement that is for a percentage of revenue generated by internet sales (the primary source of sales for me.) His skill set is web development and social media marketing (he is not terribly established and eager for opportunities to get more established). I would be working with him as a partner ideally but he would be in fact working as a contractor. I need to figure out what percentage makes sense and what sort of timelines I should consider. Any guidelines that people have seen used effectively would be a big help. I haven't updated my site in a year and don't blog or facebook etc. more than twice a month currently. The product and its sales seem to benefit significantly from creating buzz about it. My site, for reference, is www.coyledesignandbuild.com - thanks! dan

3 Replies

Travis Workman
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Travis Workman Entrepreneur • Advisor
Founder/President at Cognisoft
I have a commission chart I use but that is more for lead generation and sales I would be happy to share it with you. I don't want to make it super public but willing to send it to you for you to look at.
Rob Gropper
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Rob Gropper Entrepreneur
Director at PetHero, SPC - Member at Eastside Incubator - Principal at Tuxedo Technologies Group
Daniel, very cool product by the way! i see you are based on Oregon - i'm in Seattle and this looks very much like a NW product! - very cool! i've not spent much time (swamped as i'm sure we all are) thinking about your particular situation, but off the top of my head one way to help you narrow in on a rough % might be to talk to a few retailers - start with specialty shops (outdoor sports?) and find out what % they would take to resell your product then work backward from there. you could also talk to some specialty manufacturer's reps and get a feel for their requirements. If, for example, REI (might as well think big!) would take 50% (i have no idea, but i do have a few connections there) then way the benefits they bring to the table VS cost and compare that to bringing on this partner/contractor. It sounds like the decision you need to make first is "direct" VS "indirect" sales so i would start there...just a thought.
Justin Kresge
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Justin Kresge Entrepreneur
Marketing & Web Specialist
Speaking from past experiences as the former young guy. The relationship timeline should be at least a year as many strategies he implements will take hold over time, SEO, press releases, relationships with blogs, videos, social media, ect.

If he is to be your lone driving force I wouldn't worry about where the sales came from (meaning no commission codes or linking). Small numbered examples below:

Before him: averaged 10 sales a month
Month 1 with him: 16 sales
Pay him commission on 6 sales.

Use a scaling commission chart example:
First 5 sales 10% commission
Next 10 sales 20% commission
Above 25 sales 25% commission

Have defined "Projects" timelines:
Website redesigns: Completed before week 4
Facebook Page Redesign:Completed before week 4
ect,

Ongoing Benchmarks:
Facebook interactions
Articles written per month

Hope that helped. Ideally the young guy should structure the deal and have you adjust it. It's hard to give specific commission numbers without knowing the costs, current sales and expectations.


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