What Should Be My Partner's Cut?

You'll have to negotiate it with her, but it seems like you're doing the lions share of work.

Frankly, I don't see either side of the equation being
worth significantly more than the other unless you have
a source for the info and can have someone do it for a
flat fee.

You need the content... your partner needs the promo.
Either is nothing without the other.

You could let her make the first offer, then work toward a 50/50 split if you have to. If you believe in the project, then 50% of the profits should be worth a lot more than a flat fee that most such work usually brings in.

To put it another way: Do you think you will make more with a flat fee, or 50% of the profits?

Also, there are a few other questions to answer: How will income be tracked? Verified? How will payment be rendered? How often? Who's drawing up the contract? Is the share of profits endless, or is it for a set amount of time? Is there a way to dissolve the arrangement if either party feels the need to do so?

Anyway, it sounds like it has the potential of being an awesome project and I hope you do very well with it.

All the best,
Michael

With all due respect to Michael, I would
never, EVER do a 50% share.

I speak from experience on this one.

You need to estimate what this is worth,
on both sides, if you do $1,000 in sales -
or $25,000 in sales - or $100,000 and
more in sales.

Creating a product is one thing (and
she'll think she created the greatest
thing in the world).

Selling it is another. And if you don't
sell it, it makes nothing.

I did a deal like this with someone
and the game later changed - the
deal became worth a lot more and
I have never NOT resented making
that original deal - it was dumb.

Dumb, dumb, dumb, dumb, dumb.

It has also hindered, greatly, what
I could do with the business.

I'm not speaking from greed - it
helped a friend but the lions share
**will** fall on the marketer.

I'd start with a percentage of
earnings up to a point (which rewards
her risk) and then drop that percentage
as total sales increase - and even
consider a cap.

She's probably *not* going to like that
but if I'm you, I don't consider it any
other way.

All the best to you - X

PS - An even better idea might be to
offer her 100% of the money earned up
to a point. The only reason I can assume
you'd do this is to get something done
that you can't afford to do otherwise.

If it would cost $1000 - offer her the
first $1500 and be done with her involvement
beyond that.

Sounds like you're doing, well, pretty much everything. What exactly is your partner bringing to the table?

If they approached you with the deal, I'd work out a percentage deal that is fair, but also require pre-payment for your hours. Say $5000 for all the work, she pays upfront, buts gets 80% commission with the additional 30% being used to pay off the $5000. Once paid off, you go to a 50/50 split.

It sounds like you will be doing the majority of the work. Start off with your percentage being higher then what you would expect, then when negotiate you have some wiggle room..

Anyone who believes the OP is doing most of
the work has never created a substantial product.

This is a video series covering 25 topics. I'd bet serious
money most people can't even script 25 videos on any subject.

As marketers we tend to think that we are always the most
important part of the equation but after many years of experiencing
really crap products from people who were very good at marketing
I'm of the opinion that quality content is every bit as important.

Seriously ... I don't see a 50-50 split of work in that scenario. I would hire someone to create the videos and do it yourself without a partner.

I have done these deals in the past and like most things, it depends on the situation. Since it sounds like you are doing the majority of the work, you should evaluate whether or not you even need the other person. What are they bringing to the table?

Are they a celebrity in the 'How to Boil an Egg' scene? In which case they are bringing you a generous amount of traffic. Or, did they just come up with the idea and now they want you to do all the work for them?

You should map out all the steps that go into building the project and then determine which percentage is worth your efforts.

I concur both are critical. Why not propose 60% and 40% and then see how vehemently they defend their position (this may also suggest how serious they are about the idea)?

An offline marketing client approached me with a business idea - she would make a video series to teach people how to, let's just say, boil an egg. The video series will cover at least 25 topics under the umbrella of "How To Boil An Egg".

Video, edit, and render each topic
Create a sales website
Create a Members Area website
Create the ecommerce solution (ie: setting up PayPal)
Create Facebook and Twitter accounts
Create and execute an Internet marketing plan that will drive traffic to the site (which is an ongoing task).

And she is doing what exactly? If you are doing the video, editing and rendering each topic, what is she doing? Boiling eggs?

At this point, it's just an idea. Nothing more. Explore your options and if you can outsource egg boiling videos, do it or hire her to do it.

Is she a world renowned expert in boiling eggs that will automatically bring hoards of traffic and buyers to the site?

Actually pretty sweet deal for her if you did all that work and offered her 50% for whatever it is she is doing, which I'm not clear on since you are doing this: Video, edit, and render each topic

Well, the idea was 100% hers. I wouldn't feel good about hiring someone else to do the videos and retaining complete ownership of the project. the other part is that she has the knowledge of how to boil an egg, which I do not. I'd have to find someone else in the boiling an egg industry.

BTW, She is already a web design / Google Places client of mine, so she understands that I'll be bringing an Internet marketing component that she doesn't have.

I don't want to minimize her contribution to this project, but I'll have to insist on major equity. I think I'll start with a smaller percentage which will increase as sales increase.

Only partner if you have to.

Otherwise, there are several schools of thought on this...

1. It depends on your skill level. If you're really good at marketing and the success of the product is on your ability to market... then you don't really need her that much... she needs you a lot more.

If she has some especially valuable skill set that's difficult to find elsewhere and she could easily find someone else with your skill level to sell her product for her, then she doesn't really need you very badly. Boiling an egg? Not an especially difficult skill.

I'd probably look at it that way. Only partner with people who you really really need to partner with or with people who need you really bad. If you need them really bad, give them a 50/50 cut. If they need you really bad, give them a small slice. They'll usually be thankful for the opportunity.

2. A second school of thought is one that comes from Richard Branson... he says, always partner 50/50. People need significant skin in the game to really perform. And, only partner with people who bring significant skills that you don't have... there must be a significant need that you can't easily hire someone else to do. Otherwise, find someone on guru.com or fiverr or whatever to show you how to boil and egg. I'm guessing mom would know Simple, no partner needed.

Obviously, you're not really making a product on boiling an egg... but, again, it just depends on the skill level required. If they have to do a **** ton of work to make the product, they're probably not going to want to do it for a little slice.

One huge suggestion though.... have a solid contract. I just had a friend do almost the same exact thing and after 9-months of creation... the product creator pulled out last minute and said..... hooooooold on, you mean I have to pay 70% to an affiliate, we're only keeping 30%, then we pay 7% to clickbank... that leave 23%... then I spit that with you... now I'm at 11.5% and our product is only $19!? ****, I'm only going to make less than $2 per sale... it's not worth it... I'll just keep my product, making a sales page isn't that hard. Now I'll get 100% myself...

Not cool.

But point is, have a contract. Define ownership of the product and get that stuff out of the way, right away.

It's between you too but damn, your doing a lot more work than her...I would say
30% to you getting 70%.

I really don't see why you're doing all the work here and want to share profit...

The only case in which i would do all the work is if the idea was revolutionary

Cheers,

~Gary

I agree with Gary, no split... do it solo.

Hey guys. I wasn't online earlier today as I was up against a deadline for client proposal.

Here's the deal - my appointment is tomorrow (08/12/11) at 12 noon. I'm gonna offer a 50/50 split right off the bat. I may not have made this clear earlier, but she'll be the one to script the 25 tutorials. Topics like "How to find Chickens", "How to Negotiate with Chicken's Agents", "Finding Sponsors Who Will Pay To Fly Chickens To Your City", yadda yadda yadda.

Having said that, I believe my contribution is valuable. A 50/50 split is the bare minimum. Hopefully she'll agree with me. If not, no bad feelings. We'll agree to disagree and she can find someone else to partner with for this project.

Tomorrow afternoon I'll come back online and let you know what happened.

Well until you actually sell something, you've made nothing. So, I would place it on a sliding percentage. 30% at 1 sale, 40% at 100, etc.

It's your job to market her product? You should get the lions share at first.

Hey y'all. The meeting went fine. We negotiated a tentative deal that must be approved by her advisory board.

Basically I get $5,000.00 upfront to start the project, 50% of all sales, capped at $10,000.00, and a 3-year service contract of $1,250.00 / month to market the site. The $1,250.00 is my fee. Any expenses associated with marketing (ie: Google or Facebook ads, etc.) comes from her pocketbook. "Capped at $10,000.00" means once I pocket $10,000.00, my equity position ceases.

After the initial 3-year period, we'll evaluate the entire project and decide to continue as is, walk away as friends, or come up with an entirely new arrangement.

I feel good about this. I could use the $5,000.00 dumped into my bank account at one time. SHOULD I have gotten more? Probably. COULD I have gotten more? Not with this client. To date, this will be my largest I.M. score ever. So, I'm looking forward to making this work, learning as much as I can with this project, and using what I learn to do bigger stuff down the road.

Curious to know what y'all think.

All this talk about the creator of the idea and the production and marketing of said idea has had a business model in place for years.

Television.

If you look at that scenario the networks (marketers) usually get the lions share.

Then come the producers (either created the idea or bought it).

Then comes the talent.

And last but not least the crew that film, edit etc.

Unless this is direct sales something along this line should apply.

Without more information on exactly what the business is or at least the business plan is you would have to look at these basic.

As far a hopping around the country speaking about this, what would be the topic for the gathering. The reason I ask is because it isn't always easy to fill a room with people. That also takes marketing. Ask any one that has coordinated a seminar.

Seems to me that 50/50 is fair.

After all, she is the one with the idea and expertise and the work the OP will be doing is something she can hire someone else to do pretty easily - not the other way around as many in the thread seem to be suggesting.

Also, since we dont know what the videos are really about it's kind of hard for us to judge what she does bring to the table really. I think most people are assuming they are just run of the mill videos on something anyone can do and that may not be the case.

Lee

It wouldn't be splitting unless you give her atleast 50%.

Since you would be handling the content creation, marketing and promotion, and basically designing the site, I would think a 50% split on the profits would be fair

Outsource the video creation and do it all yourself.

You'll save yourself a LOT of headaches.

Sounds like a good deal to me. By the end of 3 years, you'll have a feel for whether or not it was worth it and know how to price it next time, but all in all, I think it's a good project for you.