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I recently reconnected with an older friend who has owned a retail store for 15+ years. Long story short his online presence is extremely weak. Beyond the visibility his physical store can gain online, I'm interesting in bringing his products online - the space his products serve is a $15 billion industry overlapping multiple markets and demographics. His business structure makes this feel real lucrative - first he's a distributor working directly with manufacturers at prices that a 15-year relationship can provide. On top of that he's got a retail storefront under a different entity so margins are at warehouse to retail, then again at retail marked up to consumer.
I want to partner with him to be the marketing arm of his company, selling physical goods through multiple individually branded sites where he'll drop-ship product from his warehouse.
The game will be to create/revamp a large top-level brand to satisfy his old school Walmart approach (lots of variety, cheap prices). Going to supplement them with smaller niche-targeted brand sites each offering a smaller subset of products focused specifically on that market. My approach to each will be similar to what I do for lead gen sites- big brand checklist / leaks
I have resources from his side of the business like personnel in the store to take images, post blogs, social media updates, etc and also a tech guy who I can pawn off task-lists related to web dev stuff. Not super confident in what they can do yet but that'll be something to learn as we go. He's got a store manager that's much more in tune with product demands and will provide me with any sales data from the retail store.
I'll be heading up all online strategy- finding opportunities / leaks, offer development (monthly subscription product, in-home tupperware parties, etc), content creation / sourcing, identifying marketing channels, campaign execution, creative work / sourcing
I've proposed to him a growth strategy and positioned myself as the go-to guy for the online division of his empire.
While we continue to discuss the specifics of the business relationship I want to get opinions from others who've negotiated something of this scale. Coming from a lead-gen price per lead model I'm unsure how to structure an agreement.
My first instinct is to put up all the marketing costs, traffic building, content work, etc in exchange for a 50% commission. For me to be comfortable with this, I'd need complete creative freedom with the store properties to adjust, tweak, and test as needed. So far, the sites I've seen of his are 80's era product vomit with no clear message or path and there might be some friction here for him to 'see' my vision for the smaller sites.
Another angle I've considered is to propose that each online property be incorporated as a retail entity in my name, which his distributor entity sells product to. The online entity then sells at a retail price to customers which are then fulfilled by his warehouse. Or... he also has a relationship with another distributor who offers drop shipping. It came up in conversation when talking about experimenting with niche-stores and using them as the fulfillment for a 25% fee
As we grow his retail business there will be increased revenue from my efforts - how to account for that? He's confessed that his store sales have been declining from local competition and I want to help him there too. I would assume one would compare average sales based on last year or similar but if his sales are declining that's an uphill battle to fight based on that metric.
I'm asking for help here to punch holes in my ideas so that when I sit down him him next to discuss how to structure our partnership. The most obvious answer is to charge a management fee on top of his marketing budget, and also pull a % of sales from both online and offline. I don't agree with this as I want to avoid a 'vendor' relationship with management fees. I don't want him to spend money on me, but rather position myself as more of a partner, with my own skin in the game. Is there a better middle ground?
I want to partner with him to be the marketing arm of his company, selling physical goods through multiple individually branded sites where he'll drop-ship product from his warehouse.
The game will be to create/revamp a large top-level brand to satisfy his old school Walmart approach (lots of variety, cheap prices). Going to supplement them with smaller niche-targeted brand sites each offering a smaller subset of products focused specifically on that market. My approach to each will be similar to what I do for lead gen sites- big brand checklist / leaks
I have resources from his side of the business like personnel in the store to take images, post blogs, social media updates, etc and also a tech guy who I can pawn off task-lists related to web dev stuff. Not super confident in what they can do yet but that'll be something to learn as we go. He's got a store manager that's much more in tune with product demands and will provide me with any sales data from the retail store.
I'll be heading up all online strategy- finding opportunities / leaks, offer development (monthly subscription product, in-home tupperware parties, etc), content creation / sourcing, identifying marketing channels, campaign execution, creative work / sourcing
I've proposed to him a growth strategy and positioned myself as the go-to guy for the online division of his empire.
While we continue to discuss the specifics of the business relationship I want to get opinions from others who've negotiated something of this scale. Coming from a lead-gen price per lead model I'm unsure how to structure an agreement.
My first instinct is to put up all the marketing costs, traffic building, content work, etc in exchange for a 50% commission. For me to be comfortable with this, I'd need complete creative freedom with the store properties to adjust, tweak, and test as needed. So far, the sites I've seen of his are 80's era product vomit with no clear message or path and there might be some friction here for him to 'see' my vision for the smaller sites.
Another angle I've considered is to propose that each online property be incorporated as a retail entity in my name, which his distributor entity sells product to. The online entity then sells at a retail price to customers which are then fulfilled by his warehouse. Or... he also has a relationship with another distributor who offers drop shipping. It came up in conversation when talking about experimenting with niche-stores and using them as the fulfillment for a 25% fee
As we grow his retail business there will be increased revenue from my efforts - how to account for that? He's confessed that his store sales have been declining from local competition and I want to help him there too. I would assume one would compare average sales based on last year or similar but if his sales are declining that's an uphill battle to fight based on that metric.
I'm asking for help here to punch holes in my ideas so that when I sit down him him next to discuss how to structure our partnership. The most obvious answer is to charge a management fee on top of his marketing budget, and also pull a % of sales from both online and offline. I don't agree with this as I want to avoid a 'vendor' relationship with management fees. I don't want him to spend money on me, but rather position myself as more of a partner, with my own skin in the game. Is there a better middle ground?
