How much commission?

[XLMonkey]

Yes, I've done this a few times. 10-15% is fairly reasonable. You should ensure that:
- you're specific what whether this is 10-15% of what the client bills, or you receive (sounds silly, but if you bill the client 100, do you pay them 10% and end up with 90? or do you bill the client 110 and pay them 10, so they've received 10% of your net receipts)
- expenses are excluded
- if you are billing the client direct, and then paying the commission, that you pay out AFTER the client pays out (so, commission on actual revenue rather than projected)
- the agreement only covers the initial period of work, so that you aren't bound to the same deal for any extensions/other business

[boredsenseless]

I've done similar things with other consultancies.

They tend to insist on at least 30% of a cut as otherwise it 'hurts' their overall profit reporting.

i.e. a project they staff internally gives them a 30% profit (once you take into account the convoluted way they work out resource cost). If they give a project to you at 10% comission it would then appear that their overall profitably was only 20% of turnover and this would affect the bosses bonus.

The percentage isn't important the end figure is what matters. If they take 80% but you still earn more than you would do normally then everyone is still a winner, even the end client wins, because even if you don't do the job they'll just put a graduate on the job and he'll do it worse but bill at the same rate.

[Fran]

Great help.

Cheers

[TheFaQQer]

Make sure that your agreement with the finder is written well enough - you don't want to be paying them commission for all the work that you do for the client forever.

[Apache]

Finders fee

Anything between 10% ans 20% depending upon the amount of work involved and whether you're likely to get future work out of it - it's a finders fee you're talking about.

[chicane]

There's no such thing as standard in such a scenario. All that matters is that the financial arrangement you come to is acceptable to both yourself and your client.

[Fran]

Has anyone done something like this?

[mace]

Sounds great

Agencies used to be on margins of 30% in the early days. Nowadays, they can go as low as 10% if they have a long term relationship with a client. If you regard pimps as your sales force, how much is the typical cost of sales and marketing for a company? I reckon it's a lot more than 15%.

[Fran]

There is a local (to me) company that I do some smaller project work for along side my normal gigs.

They have had a request from a client that is right up my street, but that they wouldn't really have any involvement with. They have offered to pass the client over to me . They are going to take a % commission, suggesting 10/15% of the total cost of the project.

This seems about right to me, but I want to get a feel of what is standard.

Has anyone else ever worked like this? (I mean apart from normal agency work) If so what commission rate did you pay?




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