Middleman commission
Discussion
Thought I should get opinions on here to see if I am expecting too much.
I have a potential customer , and I have identified a bespoke product for her that I can not provide. I have approached a company that is a reseller / installer of this product and provided them with details of the job but not the client, and suggested that I would be happy to put the two together for a commission.
The company seemed very keen to take on the job, but surprised that I expected to 'get a taste' and told me they would have to get back to me as they don't know if that is an option.
No money has been mentioned , so I thought I would ask you guys :
1: am I being reasonable?
2: if I am, what percentage should I be asking for, I assume whatever I ask for they would just bung onto their quote anyway.
I have a potential customer , and I have identified a bespoke product for her that I can not provide. I have approached a company that is a reseller / installer of this product and provided them with details of the job but not the client, and suggested that I would be happy to put the two together for a commission.
The company seemed very keen to take on the job, but surprised that I expected to 'get a taste' and told me they would have to get back to me as they don't know if that is an option.
No money has been mentioned , so I thought I would ask you guys :
1: am I being reasonable?
2: if I am, what percentage should I be asking for, I assume whatever I ask for they would just bung onto their quote anyway.
Getting a commission is logical, everyone has to get paid for a living, however, surely the commission should be coming from the client who in this case is the requester ("her") not from the random company you approached?
Since it seems you're working for "her" and therefore she should be paying you. You approached the company to help you and your 'client', they didn't come to you asking to find them new business.
So maybe find out the cost of the work from said company, add your commission (can't suggest figures as it could be anything from 1%-20% depending on what it is) and ask "her" if she's willing to pay £X total which includes your mark-up.
Since it seems you're working for "her" and therefore she should be paying you. You approached the company to help you and your 'client', they didn't come to you asking to find them new business.
So maybe find out the cost of the work from said company, add your commission (can't suggest figures as it could be anything from 1%-20% depending on what it is) and ask "her" if she's willing to pay £X total which includes your mark-up.
Edited by J__D on Wednesday 6th May 09:42
That's a fair point!
But I am not sure why 'my client' would want to pay me for simply contacting a third party company and asking them to come and do a job.
I am also looking into the option of buying the product elsewhere and fitting it myself, but i am concerned about dealing with a new product when the job is not exactly straight forward. I would actually be happier in this instance to just make a few quid and shift the responsibility on to someone else!
As the client is also a neighbor and casual friend of my mother I think if push came to shove I would pass the complicated part of the job onto a third party with no commission , and do the parts i am comfortable with. That way i will still make some cash while saving her a bit and if there is an issue with the rest of it, it is not my responsibility..
Not to mention i will still be involved, and will get to learn about this product for future jobs.
ETA:
In response to your edit:
The third party company will want to come and measure up and show her samples etc before they can put a bid in, so i cant really get her a price and then add my bit..she would be dealing with them directly..
But I am not sure why 'my client' would want to pay me for simply contacting a third party company and asking them to come and do a job.
I am also looking into the option of buying the product elsewhere and fitting it myself, but i am concerned about dealing with a new product when the job is not exactly straight forward. I would actually be happier in this instance to just make a few quid and shift the responsibility on to someone else!
As the client is also a neighbor and casual friend of my mother I think if push came to shove I would pass the complicated part of the job onto a third party with no commission , and do the parts i am comfortable with. That way i will still make some cash while saving her a bit and if there is an issue with the rest of it, it is not my responsibility..
Not to mention i will still be involved, and will get to learn about this product for future jobs.
ETA:
In response to your edit:
The third party company will want to come and measure up and show her samples etc before they can put a bid in, so i cant really get her a price and then add my bit..she would be dealing with them directly..
Edited by Shuvi McTupya on Wednesday 6th May 10:09
Not sure if this is really logical...
- from the perspective of the company who can deliver - why would they want to pay you a commission - if they refuse and you can't deliver to the client, then the chances are that the client will come directly to them - why would they wish to lose some of their profit when the alternative is keeping it all?
- from the perspective of the client - unless they have contracted you to work as a project manager / designer / etc. then why would they pay you commission? can you do the work they want - no. you can either be helpful and tell them a company that can, or just say no - they go onto google and find the company and deal directly
- if you are adding no value to the work / installation, then it is not your client for that work, why should you get paid?
- commission tends to work in situations where a company / product is widely available and it is a recognition of the sales process and that the sale was passed to that company v. other alternative providers - where they are the only ones who can do it, there is little need for a commission...
sometimes a better / more grown-up way to play this game between businesses is to go to the supplier and have this conversation:
"I have a client who needs your skills / product - I specialise in xyz so can't help them - but would love to pass them over to you as a client, and perhaps if you have clients needing xyz you might think of me..."
It is surprising how powerful that can be - you build up a network of companies who push work your way because they know they will get work back - ultimately they probably don't want to do what you do, so works well for them...
sometimes giving away something commercial works very well - the client will be happy and see you as having arranged it / more likely to recommend you - the supplier may push work your way - you have lost nothing, it has cost you 5 minutes of a phone call - you are building a network of positive support for your business
- from the perspective of the company who can deliver - why would they want to pay you a commission - if they refuse and you can't deliver to the client, then the chances are that the client will come directly to them - why would they wish to lose some of their profit when the alternative is keeping it all?
- from the perspective of the client - unless they have contracted you to work as a project manager / designer / etc. then why would they pay you commission? can you do the work they want - no. you can either be helpful and tell them a company that can, or just say no - they go onto google and find the company and deal directly
- if you are adding no value to the work / installation, then it is not your client for that work, why should you get paid?
- commission tends to work in situations where a company / product is widely available and it is a recognition of the sales process and that the sale was passed to that company v. other alternative providers - where they are the only ones who can do it, there is little need for a commission...
sometimes a better / more grown-up way to play this game between businesses is to go to the supplier and have this conversation:
"I have a client who needs your skills / product - I specialise in xyz so can't help them - but would love to pass them over to you as a client, and perhaps if you have clients needing xyz you might think of me..."
It is surprising how powerful that can be - you build up a network of companies who push work your way because they know they will get work back - ultimately they probably don't want to do what you do, so works well for them...
sometimes giving away something commercial works very well - the client will be happy and see you as having arranged it / more likely to recommend you - the supplier may push work your way - you have lost nothing, it has cost you 5 minutes of a phone call - you are building a network of positive support for your business
toohangry said:
That tells you a lot about the worth of this 'job'.
Yes, but it doesn't mean that I cant find a company that would like to be given a job that will earn them a couple of grand, and might just pay a finders fee..If not , then so be it
ETA:
If someone were to approach me with an offer like this, I would offer them 10% and simply add it to my quote..
Edited by Shuvi McTupya on Wednesday 6th May 10:21
Ok...
This is how I handle everything I cant supply if I want the business.
Customer rings me "can you supply a bespoke speaker system?" (I deal with av systems)
Me "yes" even thou I don't have them myself...
I go off and find a supplier, get the price and mark it up by a percentage.
I then ring customer. "that speaker you want is £200+VAT. Special order so I need paying up front, its a non stock item made to order"
customer either goes ahead with order or problem goes away.
The only issue is the guarantee lies with YOU, your guarantee lies with your supplier.
This is how I handle everything I cant supply if I want the business.
Customer rings me "can you supply a bespoke speaker system?" (I deal with av systems)
Me "yes" even thou I don't have them myself...
I go off and find a supplier, get the price and mark it up by a percentage.
I then ring customer. "that speaker you want is £200+VAT. Special order so I need paying up front, its a non stock item made to order"
customer either goes ahead with order or problem goes away.
The only issue is the guarantee lies with YOU, your guarantee lies with your supplier.
Shuvi McTupya said:
toohangry said:
That tells you a lot about the worth of this 'job'.
Yes, but it doesn't mean that I cant find a company that would like to be given a job that will earn them a couple of grand, and might just pay a finders fee..If not , then so be it
ETA:
If someone were to approach me with an offer like this, I would offer them 10% and simply add it to my quote..
Edited by Shuvi McTupya on Wednesday 6th May 10:21
ks.528Sport said:
Ok...
This is how I handle everything I cant supply if I want the business.
Customer rings me "can you supply a bespoke speaker system?" (I deal with av systems)
Me "yes" even thou I don't have them myself...
I go off and find a supplier, get the price and mark it up by a percentage.
I then ring customer. "that speaker you want is £200+VAT. Special order so I need paying up front, its a non stock item made to order"
customer either goes ahead with order or problem goes away.
The only issue is the guarantee lies with YOU, your guarantee lies with your supplier.
That is fine with supply of a product - but more difficult if the 3rd party has to do the installation - how do you control the conversation between 3rd party and your client?This is how I handle everything I cant supply if I want the business.
Customer rings me "can you supply a bespoke speaker system?" (I deal with av systems)
Me "yes" even thou I don't have them myself...
I go off and find a supplier, get the price and mark it up by a percentage.
I then ring customer. "that speaker you want is £200+VAT. Special order so I need paying up front, its a non stock item made to order"
customer either goes ahead with order or problem goes away.
The only issue is the guarantee lies with YOU, your guarantee lies with your supplier.
That approach is fine for just supplying a piece of kit, but that is only a small part of this job.
I don't want to be the one getting a phone call in 18 months if it breaks, if all I have made is a small percentage and now she expects me to get it sorted.
If I can get my percentage from the supplier/fitter, I have no responsibility to the client at all.
I don't want to be the one getting a phone call in 18 months if it breaks, if all I have made is a small percentage and now she expects me to get it sorted.
If I can get my percentage from the supplier/fitter, I have no responsibility to the client at all.
There has been some good advice in this thread, in particular about working with the other company to recommend each other in future.
As a client, I would not expect a plumber to take a finders fee from an electrician if the plumbing job suddenly required some electrical work. A simple recommendation to me, acceptance of the job and then I pay the electrician directly.
Maybe I am over-simplifying or being naive!
From what you yourself are saying it is hard to quantify what value you are adding to either the customer or the third party company. Therefore hard to quantify/justify any percentage.
As a client, I would not expect a plumber to take a finders fee from an electrician if the plumbing job suddenly required some electrical work. A simple recommendation to me, acceptance of the job and then I pay the electrician directly.
Maybe I am over-simplifying or being naive!
From what you yourself are saying it is hard to quantify what value you are adding to either the customer or the third party company. Therefore hard to quantify/justify any percentage.
BristolMS said:
From what you yourself are saying it is hard to quantify what value you are adding to either the customer or the third party company. Therefore hard to quantify/justify any percentage.
He's not adding any value, he's putting the two together. At the moment neither of them knows about the other. That's the point.BristolMS said:
There has been some good advice in this thread, in particular about working with the other company to recommend each other in future.
As a client, I would not expect a plumber to take a finders fee from an electrician if the plumbing job suddenly required some electrical work. A simple recommendation to me, acceptance of the job and then I pay the electrician directly.
Maybe I am over-simplifying or being naive!
From what you yourself are saying it is hard to quantify what value you are adding to either the customer or the third party company. Therefore hard to quantify/justify any percentage.
As you say, there has been some good advice offered and I may well just pass the job on in order to create some good will as this company have been recommended to me and ultimately i want 'my client' to be satisfied. I will still make a few quid doing some other stuff I am comfortable with.As a client, I would not expect a plumber to take a finders fee from an electrician if the plumbing job suddenly required some electrical work. A simple recommendation to me, acceptance of the job and then I pay the electrician directly.
Maybe I am over-simplifying or being naive!
From what you yourself are saying it is hard to quantify what value you are adding to either the customer or the third party company. Therefore hard to quantify/justify any percentage.
But, I don't think it is hard to quantify the value I am offering to the third party, they are not the only company that provide this product, I could easily take 'my business' elsewhere.
How likely is your potential customer to find the seller if you don't, i.e. are you helping her out or are you helping the seller out (or could go to another seller if you wish)? This should determine who pays the finding fee IMO. Few options:
- If you're just doing your potential customer a favour, is it possible just to increase your fee on the work you do to compensate?
- As someone else suggested, sub-contract the work?
- If you're just doing your potential customer a favour, is it possible just to increase your fee on the work you do to compensate?
- As someone else suggested, sub-contract the work?
My customer is unlikely to find this exact product on her own, but that doesn't mean she wont find something she is happy with on her own if she has a look around.
There are other options available, I just think this is the solution that will be best for her.
If I dont hear from this other company today I will contact them and tell them that a finders fee is not a deal breaker..
As I say, there is still money in the job for me..but I started a business to make money, so if there are extra opportunities to make a bit, I should explore them.
There are other options available, I just think this is the solution that will be best for her.
If I dont hear from this other company today I will contact them and tell them that a finders fee is not a deal breaker..
As I say, there is still money in the job for me..but I started a business to make money, so if there are extra opportunities to make a bit, I should explore them.
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