Home – New Forums New here? Share your story How much commission should I charge for website listing & sales in retail fashion

  • This topic is empty.
Viewing 5 posts - 1 through 5 (of 5 total)
  • Author
    Posts
  • #991426
    DruSull
    Member
    • Total posts: 1
    Up
    0
    ::

    Hi there, my friend has a ladies fashion boutique in a country town since 2012 and is looking to increase her sales with a website and shopping cart. She’s had a great website built and it’s ready to go and she wants me to upload the items (pictures, descriptions, sizes and prices) and market the site to create more sales etc. Items range from $50 to $180 RRP, mark-up is 230%-240%.

    I’m not sure what commission to charge her and we both had a few ideas and would love to hear your comments and ideas too please :-)

    Should I charge commission on the mark-up or final sale price?

    Also, what’s your thoughts on commission on Sale and Clearance items if I’ve gone to the same effort to upload and market these items too if they sell for much less??

    Due to limited traffic and sales at first and if a lower commission starter package is arranged, what should the time limit be and if it takes off quicker than planned, what to do then? It will still take me the same time to upload all the items! Should we draw up a basic business contract?

    My original idea – $5 per item uploaded + 5% commission on mark-up, once sold

    My 2nd idea – $5 per item uploaded + 5% commission on mark-up, once sold…or…15% commission-only on mark-up, once sold…whichever is the greater $ amount

    My brother’s idea – 15% commission-only on mark-up, once sold (Sales and Clearance items – 30% commission-only on mark-up, once sold – I thought this a bit steep, but the profit made will be much less too)

    Her Accountant’s 1st idea (starter package until it takes off) – $100 per week + 5% commission on mark-up, once sold

    Her Accountant’s 2nd idea (2nd starter package – hopefully) – 10% commission only on mark-up, once sold

    Is her Accountant trying to rip me silly or is this reasonable? At $100 per week retainer, it’s going to take me a lot longer than a few hours to upload all these items isn’t it, and 5% on mark-up isn’t really that much! Especially at first, it’s going to take me a long time to upload everything to start the cart off isn’t it!

    Anyway, I look forward to your ideas, and thanks so much for your time! A

    #1181479
    ThexArm
    Member
    • Total posts: 253
    Up
    0
    ::

    My apologies in advance if I sound harsh. This is one of the reasons why Sales guys shouldn’t know too much about product margins. Although she has done all the work up till now including selecting and developing website. Now she is looking for someone to update the website and promote it. If you are a very good marketing and sales person then you can obviously make a good cut out of sales. Anyway, it’s good that you are being honest and disclosed your confusion in this matter given that you came to know about the high margins in the business.

    Is it possible to hire someone on hourly basis to upload the pictures, prices etc?

    Sales commissions can range anywhere between 5 – 26% on a step scale based on performance. Higher rate of commission for generating more sales. Flat rate is not acceptable as there is no motivation for sales person to do better.

    Personally I would pay hourly for the admin work and commission based on performance.

    Sent from my iPhone using Tapatalk

    #1181480
    bb1
    Participant
    • Total posts: 4,485
    Up
    0
    ::

    Personally I would ask if the margins are achievable, and will the product sell with those margins.

    It is not the first time that someone has applied unrealistic margins, and you are left doing all of this work, with no resultant sales, not becuase of the work you have done, more that the prices are just unrealistic.

    I would be going for an hourly rate for my work on this one, you could do a lot of work for very little return, has the seller quoted such high margins to try to get you to do all the work, but once listed, every item is on markdown to achieve sales, leaving you with little for your efforts.

    Like any investment quoting sky rocket high retiurns, tread carefully, and think how they can achieve that when most (not all), business’s achieve substantially lower margins.

    #1181481
    LucasArthur
    Participant
    • Total posts: 3,171
    Up
    0
    ::

    Hi DruSkul or A {insert name here}

    Hope you are well.. May i welcome you to the forums and also suggest it may benefit you to add a little more about yourself or business in this Intro Section so we can get to know you a little better ;)..

    For those ;) that replied before me, i commend you as this is such an unusual proposition.. Well, in my eyes it is… And with the information provided, albeit quite comprehensive on the commission side of things, I find this query near impossible to answer and this is based on my previous retail/wholesale and import experience along with many many years of ‘sales’ experience…

    What i mean is that although there is a lot about what is proposed, there is little in what you are actually going to bring to the table with experience and the likes and seems that there are 2 roles being combined which also is a little unusual.. One being the web admin guy/gal and then the second being SEO/Traffic driver? Correct me if i am incorrect, please…

    Just a couple of points.. Even if those margins are discussed, you need to bare in mind all other costs the actual business owner is burdening..

    As a business owner, and operator of the website i assume, i can not see any major advantage in paying a commission to someone who is maintaining my site as such and would opt to employ someone on a per product upload basis with ZERO commission…

    As you, i see this as a huge win whatever the commission fee is arranged.. Reason is that, even though you are investing considerable time in the outset uploading images and the likes (which really isnt that long if all files are provided correctly) there is very little ongoing maintenance required to keep a product in a website shop.. So the longer it is online and the more of that single item that are sold over time you will continue (forever i assume) to benefit from the sale and with dollar cost averaging the time spent upfront will be mitigated quite quickly if the enterprise is successful.

    Although the above are not answers, i wanted to just throw a little different perspective into the equation.. Really, i am more curious about how this conversation has come about and is this person a friend or business associate? All of which can change your approach a little..

    Look forward to reading more about you.

    Jason

    ps.. i think the margin has little to no insight into the question you are asking re commission – the margin, as Bala inferred, is irrelevant in this equation and can sometimes be too much information which can taint some peoples expectations.

    Jason Ramage | Lucas Arthur Pty Ltd | E: [email protected]   P: 61 3 8324 0344    M: 61 412 244 888
    #1181482
    Dave Gillen – Former FS Concierge
    Keymaster
    • Total posts: 2,566
    Up
    0
    ::

    Hi DruSull,

    Welcome to the forums!

    You now have about 10 different opinions on this matter, which must be pretty confusing for you. There are a couple of reasons for this:

    1) It’s a highly unusual arrangement. You see, the website is an asset that your friend has built and owns. So as Jason has mentioned above, when the website makes a sale, your own contribution is highly uncertain (i.e. the website – her asset – is doing a lot of the work itself). This makes it hard to say how much you should be paid for each sale.

    2) Because you’re just starting, you (and she) have no idea how many sales you’ll be generating. 5% could be worth $5/week or $5000/week, and you’d kind of need to know this to know what’s fair. Though even then, how much of that $5k came from the work you did (vs the design of her website for example)? We’ll never know.

    3) What happens when you’re successful? Does she have to pay you perpetually for the sales HER website makes? Or can she let you go once all your hard work starts to pay off? Neither choice seems fair to both parties.

    As the other members have suggested here, an hourly rate seems best for the admin (uploading). I would say the same is true for the marketing work – start off with a limited amount of work, and as you achieve some initial results the profits will hopefully justify more marketing.

    Good luck!

    Dave

Viewing 5 posts - 1 through 5 (of 5 total)
  • You must be logged in to reply to this topic.