Bad idea to manage an affiliates company?

[GPM]

I have an ecommerce business in retail and had a smaller competitor approach me who can not and does not want to handle his customer service, answer phone calls, emails, process orders ect... He wants us to take all of that over and all products would be purchased from us and he will receive a percent of each sale. It sounds good to bring in some business for my company but the one problem I see is I feel like I am supporting a competitor and helping him get his feet off the ground because all orders through that company will be in their name, and I will only be helping them build a reputation.

Another issue could be once that company starts doing well he could pick up and say ok I'm not purchasing from you anymore and Im doing my own thing.

What do you guys think? Is there any way to protect myself or a better way of doing this? Should I take over the company after he makes $X amount?

[rpendery2006]

I like the idea of helping people get on their feet, but not in that way. I wouldn't do it, because then you become accountable to them also and if the business does pick up a lot and they walk, you're left with a lot less...

[deep_impression777]

What you figured out makes sense GPM. Sure it sounds like good business now but they have the power still to break away and where would your company be then?

Maybe you can make an offer to buy out his business and contacts? Make him and employee and the whole business a division.

[kenny7461]

sounds interesting