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Reasonable percentage for "Finder's Fee"?

Discussion in 'Sales, Marketing, Pricing Etc.' started by FatCat, Nov 19, 2012.

  1. FatCat

    FatCat Very Active Member

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    We have a handful of accounts that we wholesale to, nothing really major like some of you guys. One of these is an offset print shop that typically only buys banners, yard signs, decals, etc.

    However, they have a customer that has 2 box trucks that need print/cut lettering made and installed. The print shop doesn't have the facility to do this, nor the know-how, so they are wanting us to do it all and if they send this customer my way would I be willing to reciprocate with a finder's fee? I certainly would, but wondering what is an appropriate %? FWIW - both trucks are minimal with just a small logo applied to both sides and the back door. Retail for both trucks is just under $1500.

    I'm thinking somewhere around 10-20%, thoughts please?
    (wondering if there is an industry standard for this type of thing)

    Thanks!
     
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  2. CanuckSigns

    CanuckSigns Very Active Member

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    I would consider 15% to be fair, as long as the offset shop doesn't need to do anything other than send the customer to you.
     
  3. Pat Whatley

    Pat Whatley Major Contributor

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    I've got two print brokers that I do work through. If they just send me the lead and I make the sale I'll kick them around 10% (I just kind of make it up based on whatever the job paid, how much of a pain the customer was, etc.) They're gonna have to do more than just call me and say "Hey, I saw a truck on the highway yesterday that needed new letters. You should call them." If they want to get paid I expect them to send me leads on people they've already talked to who are actually looking for signs.
     
  4. Gino

    Gino Major Contributor

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    10% or maybe 15% would be my number on amounts over $100 and under $1,000. Remember, this one is only $150 or so. If they sent you a $15,000, are you going to have an extra $1,500 to give them ?? Amounts over $1,000, would be about 5% and over $5,000 would be about 3.5%.

    It might not sound fair, but this is really something you are giving away and not knowing what headaches or promises the other guy has made for you to walk into.
     
  5. qmr55

    qmr55 Very Active Member

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    We do anything from 2% to 15% one some accounts. Really depends on the size of the order.
     
  6. Moze

    Moze Very Active Member

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    Pretty much exactly what I was thinking.
     
  7. FireSprint

    FireSprint Very Active Member

    Gino's numbers are about what our used to be as a retail shop.

    We offer a flat rate referral of $50 credit. Sometimes we win sometimes we lose. We only credit it to the referrer's account after the new customer places their first sale.

    I really wish we had an automated way to do it because we have forgotten a couple by mistake - which makes us look cheap.
     
  8. FatCat

    FatCat Very Active Member

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    I appreciate the replies. This customer is already doing various print related items for them like biz cards, envelopes, etc. So it is "their" customer and I appreciate their trust which I certainly won't jeopardize. The only thing they are doing is sending me the EPS file for the artwork. I handle all the setup, proofing, scheduling, installation and bill their customer directly. So yes, they're making money for not doing much, but I think it still warrants a finder's fee of a reasonable amount.

    I like Gino's idea of creating a stair-step approach to the finder's fee. I think from here on out I'll do 15% for anything up to $1,000 and 10% for anything $1k-$2500 and 5% for anything above $2500 with a shop maximum of $500 unless something really lucrative comes down the pipe.

    Sound reasonable?
     
  9. kanini

    kanini Member

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    We co-operate a lot with the local offset press, and they have their own inhouse pre-press department that discusses the layout of the vinyl/decals with the customer, prepares the artwork and gives us print-ready files. We print/cut and apply it at our shop. For this we usually give the offset guys 20-25% discount (on below 1000,- orders) and also a lot of referrals/work with paper printing/offset products etc. If they didn't do as much work with the files, customers etc. I'd be in the ballpark of the above posts.
     
  10. Rick

    Rick Certified Enneadecagon Designer

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    Zilch/nada... I return the favor and expect nothing in return... fact is, I refer more people to print and sign shops than they do to me. I see it as them doing me a favor by servicing my client. If they don't, I have plenty of shops that will.
     
  11. ProWraps

    ProWraps Very Active Member

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    no more than 10% ever.
     
  12. fixtureman

    fixtureman Member

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    Give them the price you would charge and have them sub to you for that price and they could mark it up as much as they wanted.
     
  13. Salmoneye

    Salmoneye Very Active Member

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    I have a guy that brings me work. We have some jobs with thin margin on small orders that I have given him a $20 bill, other jobs that have had fat, fat margins but small order that I outsourced and I have given him 40%! He has never questioned the amounts and is grateful, that is why he sends me all of his work. This isn't for referrals but more of an extended outside sales person. And before you freak out, the 40% isn't very often.
     
  14. john1

    john1 Guest

    I have a guy i trade off work with like that, He prints offset stuff and every now and again he will send me a customer directly for lettering. I typically don't give out any finders fee or anything but in need we always have each others backs.

    I never get any hefty $1500 jobs this way but i'd say that much has plenty of room for some compensation.

    I know it's rare to have a good business relationship like that but we both work in the same town so it works great.
     
  15. signswi

    signswi Very Active Member

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    Nothing in your scenario OP. They're using you like a B2B print supplier only they aren't marking it up and their customer knows you did it. That's their choice (and a weird one). Real leads, where the customer will come directly to you in the future, that would be the scenario for a finder fee.
     
  16. ppisales

    ppisales New Member

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    We work with retail, wholesale, brokers, salespeople, etc. When it comes to an outside company reselling our product they react most favorably to a discount off of your regular price, and let them mark it up as much as they see fit, especially if they are handling all of the design work. Note there are wholesale companies out there that are selling vinyl outdoor banners 6'x2' for $20.28 however for a one day rush they get $71.88 and I'm willing to bet that most of their wholesale customers get the 1 day and don't wait 2-4 days.
     
  17. Fatboy

    Fatboy Very Active Member

    I make sure that the finders fee is as generous as possible. When they start picking up that they could actually make some money by refering people to you they normally start offering their clients the service.On the flip side...if it is not worth it......will they do it again?
     
  18. signswi

    signswi Very Active Member

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    As I stated, that's the normal scenario. However in the OP's scenario the lead wants to pass the customer on to the OP and the OP will bill the customer directly.
     
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