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When does it make sense to charge for a joint venture?

by John Durham
5 replies
Think of buying solo ads...

Thats the concept here.

If I was going to start a large sales organization for someone it would cost them thousands of dollars up front - PLUS commission.

One might say "Why thousands of dollars up front if you get commission as it grows...".

Here's why, because you need me, but I dont need you.

You want me to build something on commission that I could build for myself without you... but you cant build my part without me.

So , where is the attraction for me?

Make sense?

Thats why salespeople are hard to find for commission.

Because you cant sell without them, but they can still sell without you!

Thats why people pay upfront for talent.
#charge #joint #make #sense #venture
  • Profile picture of the author Jay Rhome
    Originally Posted by John Durham View Post

    Thats why salespeople are hard to find for commission.

    Because you cant sell without them, but they can still sell without you!

    Thats why people pay upfront for talent.
    It makes sense in many situations, but not all sales work propositions are equal. If I have a system that a great closer could use to bank 200+K a year plus residuals, there are not many places offering that! If my offer is the same as the norm, I'm a startup, etc., then sure.

    Like the JV analogy, it depends on what either party brings to the table.
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    • Profile picture of the author Michael Bucker
      Originally Posted by Jay Rhome View Post

      It makes sense in many situations, but not all sales work propositions are equal. If I have a system that a great closer could use to bank 200+K a year plus residuals, there are not many places offering that! If my offer is the same as the norm, I'm a startup, etc., then sure.

      Like the JV analogy, it depends on what either party brings to the table.
      It does depend on what you bring to the table. As you mention a great closer could make 200+k which I think may be Johns point if you are a great closer and have something to offer, charge money for it.
      If your worth it who would not pay. They will receive a heck of a lot more than a small upfront investment.
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  • Profile picture of the author Seantrepreneur
    I think it's completely up to the person if they want to charge or not. I have a hard time looking at it as a joint venture if someone is paying upfront to be associated with the other person tho. I understand this could still be looked at as a JV, but it just doesn't seem right to me.

    I would prefer someone just say "No thanks" rather than requiring me to pay to work with them. I have a couple JV's in the works right now that I am more successful than the other person and the thought hasn't even crossed my mind that I would make that person pay a fee. At the same time I have a couple in the works with ppl who are more successful than I am and they never bought up an upfront fee. There are TONS of ways I could figure out on my own how to benefit from that relationship without making someone pay me.

    Of course we are talking small scale here too not large corporations.

    Just my .02

    Sean
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  • Profile picture of the author John Durham
    Its the same concept as a salesman coming to your company looking for a job, and saying "I want a salary".

    Basically saying "I want a guarantee that Im not wasting my time". If you think its worth it to work with him, you pay it.

    In this case, its a sales organization developer saying "I want an advance" plus commission, to develop your sales force.

    On JV's,

    If Mike Lantz told me... "I will JV with you , but Im gonna charge you $1,000 up front for the privilege of working with me...", I would do it in a heart beat.

    So I think its a selective issue. Like you said.
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  • Profile picture of the author owenian1
    You should charge for all joint ventures en-devours unless your starting out and you need some social proof.

    In a JV you have the list or high traffic website or you have the great product and sales material that works (ie proof)

    But if you don't have either you need to get in the toll-gate position and take a percentage by putting the other two together.

    It always make sense to charge for a JV

    That's my two cents
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