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Do you charge clients fixed monthly fee or depends on results?

by mikehende
10 replies
Hey guys, especially for ecommerce, do you charge a fixed monthly fee that never increases or do you charge accordingly as they get more sales? If the latter then how is this done please?
#charge #clients #depends #fee #fixed #monthly #results
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  • Profile picture of the author OptedIn
    Originally Posted by mikehende View Post

    Hey guys, especially for ecommerce, do you charge a fixed monthly fee that never increases or do you charge accordingly as they get more sales? If the latter then how is this done please?
    What are you talking about? What are you charging them for?
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  • Profile picture of the author mikehende
    Like for helping a retailer sell their whatever products online. Is it done by a set monthly fee or based off total sales at the end of the month?
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    • Profile picture of the author Frank Donovan
      Originally Posted by mikehende View Post

      Like for helping a retailer sell their whatever products online. Is it done by a set monthly fee or based off total sales at the end of the month?
      It's done by whatever method you agree upfront with the client. Some marketing services are charged via a set fee, others by results. Either way, you need to be able to measure the benefits you're providing.

      But the most important factor for you to consider is what value you place on your time and expertise (although the latter will ultimately be defined by the client).
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  • Profile picture of the author dioni
    I believe it depends on how you've discussed it with the client in the first place.
    How did you offer your service to them?
    Things like these should be discussed at the first part of any business deal.

    But of course if you haven't had done this yet, it is based upon how you measure your service given to them.
    If you think you've increased your efforts, your time, and spent quite a lot of your mind on it, I believe it's okay to increase the charge as they get more sales.
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    • Profile picture of the author mikehende
      Originally Posted by dioni View Post

      If you think you've increased your efforts, your time, and spent quite a lot of your mind on it, I believe it's okay to increase the charge as they get more sales.
      Yes, I think this is a key point, that extra effort should mean extra compensation if that extra effort results in more sales.
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  • Profile picture of the author Obermair
    I have hired folks to do marketing for me and it has always been for a monthly fee. I have many times requested a rate based on success but no one has taken me up on that, so I like your idea of performance based. My approach was to share in the additional sales under the view that extra revenue I wasn't planning for was a bonus and to share the profits still allowed me to increase sales and profits. So, I believe that some clients would be very much open for an agreement in which the more sales that increase, the more your compensation.
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  • Profile picture of the author mikehende
    Yeah I have to be careful how I approach it this time around. I had a set monthly SEO fee for a plumber who had told me "the more money he makes the more I make", now 2 years later with his business thriving I never got one cent extra.
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    • Profile picture of the author OptedIn
      Originally Posted by mikehende View Post

      Yeah I have to be careful how I approach it this time around. I had a set monthly SEO fee for a plumber who had told me "the more money he makes the more I make", now 2 years later with his business thriving I never got one cent extra.
      And you haven't provided your services free of charge to his main competition???

      Bury that clown! Think about it.
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  • Profile picture of the author AndreiMorariu
    You should agree with the business owner beforehand. But I have a few tips:
    - if you think the sales volume will be huge -> go for the % of total sales
    - going for a monthly fee doesn't imply that you never increase the price. You could raise the price with the reason of having too much clients and no time to handle the workload or any other plausible reason..but when going for this option I suggest you have a fair knowledge of your service's value.

    By that I mean that you should aim to bring at least 3x more value than you charge. Ex. if you charge 3k per month the business should profit at least 9k from their investment in you, otherwise they will stop paying the monthly retainer. It's all about ROI my friend
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    • Profile picture of the author mikehende
      Originally Posted by AndreiMorariu View Post


      By that I mean that you should aim to bring at least 3x more value than you charge. Ex. if you charge 3k per month the business should profit at least 9k from their investment in you, otherwise they will stop paying the monthly retainer. It's all about ROI my friend
      Problem with this I think is how to know how much sales/profits they will make, of course I can;t depend on them giving me accurate info.
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