75% of sales is this a big ask?

I have been given to oppotunity to do SEO for a company who at present makes very very little sales it makes almost no profit each month. However the product has a worldwide target audient and pays nothing in terms of advertising and is best suited to be sold online, which at the moment it isn't being done.

I can see oppotunity here with the product.

Would I be asking a lot if I agreed to do SEO for the business on a free basis on the condition that I make 75% of all sales through online conversions brought about via SEO work?

The way I see it the business will still be making 25% more than it is at the moment and will have to do nothing.

 

How would you see it if you owned the company?

You state, "The way I see it the business will still be making 25% more than it is at the moment and will have to do nothing."

The fact is, they might well be losing money on every transaction by agreeing to your terms.

 

I'm not sure what percentage to ask for that's why I am seeking advice from people in here...

 

It's hard to say w/out knowing the nature of the product, the profit margins on the product, etc.

For example, if someone has an ebook they are selling online, perhaps getting 35-50% of each sale might not be unreasonable since selling it only just a matter of taking the payment online and allowing the user to download it. Each copy sold is pretty much 100% profit.

But if they are selling some product that costs $30 to buy wholesale and they are selling it for $60 then asking 75% of sales means they NEVER make a profit. They would pay you $45 and the wholesale distributor $30. So it cost them $75 to sell for $60... net loss of $15 not counting shipping, labor of packing, etc.

I think 75% is waaaaaaaaaaay to high.

 

I also believe 75% is way too high. That said, I can't make a clear judgment about what the proper percentage would be. However, I can tell you that the company would be more receptive to your offer at whatever percentage, if you ask for that percentage to be taken off of actual profit, rather than the gross amount of the sales. As Canonical mentioned, they stand to lose money if you ask for your percentage based on the gross amount.

 

business owners sometimes underestimate the power of SEO and don't really understand the nature of online business, i proposed 50% to a guy who had a very interesting online store two years ago, he had the chance to make an easy 10k per month if i rank him top 3, he rejected the offer and only agreed to pay me 10% of sales, 2 years later he is still not in the top 20 and still making nothing from his website, now what is better, making 5k per month and giving 5k to your SEO or making nothing at all ?

that being said, 75% is maybe a little bit step..

thanks.

 

75% is ridiculous.

If you are going to do performance based marketing, then look at the whole picture and their profit margins on their product...if they make 10K profit on a product, then 10% is decent money and it won't hurt them. If they make 1 dollar on a product, then maybe 50% could fly...you never know until you really look at their bottom line...
whats the profit? How much of that goes to employees? taxes, bill,s whatever....even if they start by making 30 bucks off each item, after they pay out, they could only make 5 bucks...so if you take even 60% of that, it could really hurt them...also, how long do you get paid? For eternity- off all online sales for the rest of the business time? only while you are actively promoting? ....

Need more details to really know.

 

i agree 75 percent is way to high. i think perhaps you should ask for 75percent to begin with, because it will take time to generate income. After three months you could cut that down to 50 percent.

 

75% is way to high ... I would come up with a a percentage you both agree upon and go from there. How would you track exactly what your SEO has done? Only way you would do that is a percentage of all sale (and than you might as well just talk to him about being an actual partner) or you would need to just take a percentage of conversions from organic traffic.

 

just do 30 percent. that way they will make a profit from money that was not there.. and you will get your cut as well

 

its good deal i think, 75% of sale

 

75% is way too steep. I think 25-35% of gross sales is more reasonable, but it depends on the nature of the product.

 

You will never be successful in negotiations if you can't see things from the other side of the table. Successful negotiations are about finding the common ground.

I served as president of a corporation that was seeing about a 30% net margin across a variety of products. That is really quite astounding for a manufactured product.

Even at a 30% net 1 or 2% difference in credit card fees could make or break negotiations.

A request for 75% of anything (gross, net, etc.) wouldn't even have been good for a laugh.

25-35% of gross would have been good for a quick exit.

A top sales rep would be hard pressed to get a 10% commission, and that only after several years of proven sales in the high 6 figures. (We had only one that I would have even considered putting on commission.)

I doubt that I would have even entertained a commission for SEO, and if I had it would have been more like 1% and that only on sales directly attributal to the SEO work as tracked by traffic and increase in Internet sales.

Get a life folks. CPC wouldn't run 75%, and it would guarantee top placement.

 

Hence why I said the nature of the product. 25-35% commission on gross sales is reasonable if there are no to very little upfront costs.

 

willybfriendly, there are many kind of products, informational products or software for example will leave you with a 100% benefit margin, plus i think this OP is talking about 75% of the benefits (revenue), not the actual sales.

 

My understanding is that the OP is asking for 75% of sales - which would mean gross sales, not net profit.

There is absolutely no way what so ever you can sell a product online and have a 100% profit margin. Why? You have a domain name, website hosting, and you need a way to take payments. Even if it was just PayPal, you are looking at 2.5% to 3.9% in fees. Whether it be Clickbank, Regnow, Plimus, PayPal, or own merchant account, you are going to have fees.

Just because a product is information, software or other digital product doesn't make 100% Profit. There is the persons time in creating the software, maintaining the website, and if he runs a reputable (and legal) business, there are all kinds of forms to fill out for the government, including tax forms. The creator's time is worth something. But even if you factor that time as $0, there are still the other fees.

Personally, if someone came to me asking 75% of sales, I'd say no. I wouldn't even consider it.

What I would do is structure a deal whereby the more sales you bring in, the more you make as a percentage. That makes it performance based and gives the OP even more motivation to work.

 

nyxano, i personally tend to look at the BIG picture, that's why i said 100%, if i am selling a digital product, then every order is a gift from god, but i agree, it is not 100% but something close to that.

and as i said 75 percent of sales is step, and i was assuming he was talking about net profit not gross sales. 75% of gross sales is impossible.

 

Keep it simple, do it on a profit basis, and go 50/50. He can't do it without you, butif if could be bothered to source the product....etc........then you could probably do it without him. Or maybe you could try a scaled percentage increase. 1-2k/mo profits you get 35% 2- 5k you get a bit more, and so on. this will give you both an insentive to work with each other, and allow your relatioship to blossom - which will be a more rewarding siuation all round.

Ren
Video email marketing

 

I'm sorry but I wouldn't do this. I get tons of these every week where someone asks me to do work (usually a lot of it as well) for them in trade of future considerations or a link on some site or mention in their blog. Those things do not pay the bills or put food on my table. Maybe you're willing to do this but if I got an email along these lines, I would pass over it.

 

You will go bankrupt just as fast overvaluing yourself as you will undervaluing yourself.

Good luck....