If you are selling a third party product or service, what do you believe is a fair commission rate?

Scott_498
Scott_498 Member Posts: 10
First Comment
edited July 2022 in Sales CRM #1
If you are selling a third party product or service, what do you believe is a fair commission rate?

Answers

  • Mike van der Valk
    Mike van der Valk Pipedrive Team Posts: 3,089 PIPEDRIVE TEAM
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    edited April 2020 #2
    @Amit Sarda @Boris Tsibelman @Bernd Auer @Paul Minors Can any of you help out here with some suggestions? :)
  • Amit Sarda (AmitSarda.xyz)
    Amit Sarda (AmitSarda.xyz) Member Posts: 1,535
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    edited April 2020 #3
    @Mike van der Valk I would need a lot more context to answer this question, but a few things I will consider are:
    - gross margin of the product/service for the company (do they have surplus to share?)
    - lifecycle stage of the product/service (are they growing aggressively?)
    - number of channel partners/sellers
  • Paul Minors
    Paul Minors Member Posts: 88
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    edited April 2020 #4
    Yeah, that's a really tough one to answer as I think it would depend a lot on the industry and potential margin on the product. @Scott what is the product or service?
  • Scott_498
    Scott_498 Member Posts: 10
    First Comment
    edited April 2020 #5
    Okay.

    So I am in tourism, we sell, small pax (up to 13 people) public tours. 4 stops, lunch, heaps of drinks. I am in Melbourne Australia so legit rich world pricing. Tours retail between $115-170pp.
  • Bernd Auer
    Bernd Auer Member Posts: 343
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    edited April 2020 #6
    Aussie Brewery Tour? I'm in... :-)

    We are talking about selling your trips online, right? So like an affiliate/referral program?

    If I want to know a typical share for a certain industry, I have a look at other affiliate programs. There is a nice page in Germany: https://www.100partnerprogramme.de/suche/?q=tourismus. As you can see, I searched for tourism. And then you search for a program which is as close to our products/services as possible. This gives a good indication. I am sure you will find a comparable site in Australia as well. Have a look at AWIN. I think they are active in your country too. In Germany, there is a quite well known company called Jochen Schweizer. They are selling "Experiences", so small trips, Bungee Jumping etc. High Price. They are offering up to 11%.
  • Paul Minors
    Paul Minors Member Posts: 88
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    edited April 2020 #7
    So the commission you pay may vary a lot depending on your margin and the costs. But I'd be looking at somewhere in the 10-30% range potentially.
  • Scott_498
    Scott_498 Member Posts: 10
    First Comment
    edited April 2020 #8
    25-30% in our industry is normal. After being here a while it feels a little unsustainable for 25-30% of the RRP to be out the door on a single-seat sale.
  • Jörgen Sjöstrand_231
    Jörgen Sjöstrand_231 Member Posts: 80
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    edited June 2022 #9

    10% if a little sales job is done (aka referral). 
    30% if the majority of the sales job is done.
    50% if you value ad to the sale.