Business partnership -- what to offer?

Discussion in 'Growing and Managing a Business' started by nikpmr, Sep 28, 2010.

  1. nikpmr

    nikpmr
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    Hello,
    I run a website building service on the Internet and another company (whom I work for, in an entirely different profession) has approached me and asked if they would be able to offer my company's services as a bundle with their own product. This would be my first business partnership and I am unsure how much I should ask for in compensation, and in what way it should be given. Here are some specifications:

    - My product (kafafa.com) is used to create websites with no programming experience. Their product (shortsalecommander.com) helps real estate agents keep track of their short sales. They would want to use my product to give agents the ability to create web sites for their clients to view information about them and their listed properties.
    - They plan to double the price of their product ($49 to $99 per month) with the addition of my services. The pricing of my service directly through me is $6.25 per month, but does not include the real estate tools.
    - As an employee I can expect to be using my hours to create an alternate ("realty") version of the software if negotiations come through.

    I am wondering whether I should ask for a commission based on sales, simply a monthly license fee, both, or an entirely different pricing plan.

    Any guidelines on what I should do would be appreciated.
    Thanks so much!
    -Nick
     
  2. VVhite_Angel

    VVhite_Angel
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    Hi, welcome in BAF forum :)

    Commission based on total sale can be interesting for them : If they don't sell, they wont pay a lot.
    At the contrary, if they sell a lot, you are both to get lot money back.

    Or the two : A license fee + a %
     
  3. Fergal

    Fergal
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    Welcome to our business forum nikpmr.

    I agree with VVhite_Angel, that a commission fee could be the way to go. That creates a win win situation in that the more they sell the better it is for you and the better it will be for your partner.

    If you want to expand your partnership programme you could consider promoting your business through an affiliate network such as Commission Junction or ClickBank.
     
  4. wringle

    wringle
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    I have had an offer for business partnership from someone with a great business reputation and the funding to do so. I am trying to find someone to help advise me through the legal documents where we can both benefit and i will cover myself from being left on the curb.
     
  5. Fergal

    Fergal
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    That's good news wringle, congratulations. I'd suggest that you seek professional legal advice from a local solicitor or perhaps even from your accountant.
     

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