Query on Sales Commission Rates, etc., for Consultants

[JustDoItForever]

Hey guys! Question... I am getting into a sales consultant position where I am going to use my internet/web/marketing skills to promote and sell a line of items for the owner in apparel. There are various factors, so I will try to list as much here as possible so you can advise me properly...

$15 - Per Item Cost (in hand delivered, to owner)
$10 - Desired Profit per invidual item sold for owner
$80-$120 - Per Item Average Retail Value of Competition

Item is to be marketed as limited edition products, private label... with average total available quantity as 1000 on average.
Item has sold for over $100 in reselling retail store in the past.
Item label is not well known anywhere yet.

My job:

1. Redesign the web site for e-commerce
2. Internet marketing, top to bottom

Questions:

1. Now per item, owner wants me to stay within $35-$60 retail per item for sale... depending on the market, I will have to make a judgement call on this due to economy, season, etc... it can sell for more, but it is risky. He does not have funds to pay me up front, so this will be the best way if we are to move forward. Any input on this would be appreciated.
2. For bulk sales to stores, resellers, etc., he has proposed selling for minimum of $25/item, and within the $10 profit, I will get a 20% commission, so $2 per item. My thought is, if this is a sale through me or the internet, it is low since I am the sole culprit for the traffic to the sale... (well har dto prove but if he has not done any sales online like that ever...).. please let me know if that is still fair, or what is fair in this market.

I am in no way a marketing/sales expert, so any other thoughts would be much appreciated, thank you!

[inle]

is this something about pricing strategies on product pricings?

I am a sales & marketing person & I help organisations to plan things..
but I will like to know if you guys have any pricing strategy in place or what strategies are you guys intend to use & what's the rationale for that?

From what I gathered from your post, I got these few objective conclusions(might not be right because I do not have much details from your side to work on):

1) you guys do not have enough marketing resources to leverage on effectively..

2) you are entering competitive grounds & your brands are unknown & at entry level & it seem there is a lack of unique competitive edge on your side.. So you guys play solely on price..

3) you míght trigger a price war where larger & more established compeitors might flush you out because of their stronger foothold..

4) You are unaware of the value & benefit your offering can add to your customers.. In fact, you might not research much on your customer & target market to know how to value add to them for a larger margin..

5) We know the danger of a price war, especially for new brands.. I am unsure if you will appreciate this in your business & how it is going to impact your survival odds..

6) Either you think I had being too critical in my above comments that you will percieved as nonsense that you will dismiss me immediately OR you will consider dropping me a note via pm & see how I can add value to your situation & open doors to work together to clear this..

Just my humble opinions..

[JustDoItForever]

First I am not worried about criticism as a beginner in marketing... that is why i am here, to learn... i just dont like people who come and and insult and dont even mean to help... but let me address your questions and I will also PM you some more info so it may help you... and I do appreciate your help greatly!

(If i do not answer here, that means some info in the PM will answer them... please feel free to ask me any more questions after that)

is this something about pricing strategies on product pricings? I will like to know if you guys have any pricing strategy in place or what strategies are you guys intend to use & what's the rationale for that?

The price list I gave in the first post is all the info in pricing I have at the moment... he is in the middle of doing more research for more specific price points.

1) you guys do not have enough marketing resources to leverage on effectively..

My only marketing resources currently are free ones through the internet in the usual ways. I cannot afford to spend actual dollars for marketing now when the pay is only commission based and success is a big unknown, So yes our resources are limited, and will be a very small time operation to start.

2) you are entering competitive grounds & your brands are unknown & at entry level & it seem there is a lack of unique competitive edge on your side.. So you guys play solely on price..

I personally do not know of the level of competition for this niche... but owner is researching pricing as i said, and giving me a list of his competition, so then I will have a better idea.

3) you míght trigger a price war where larger & more established compeitors might flush you out because of their stronger foothold..

Since these are unique exclusive designs in each model, I am not sure any large company would even consider us as a threat or stealing a piece of their pie...

4) You are unaware of the value & benefit your offering can add to your customers.. In fact, you might not research much on your customer & target market to know how to value add to them for a larger margin..

My idea is to market the product as mid-high end ware for a good value, kind of like the Hyundai Genesis....

5) We know the danger of a price war, especially for new brands.. I am unsure if you will appreciate this in your business & how it is going to impact your survival odds..

I personally will not lose anything but time... the owner has products in stock and holding, so it is hurting him... price wars or not, as long as he and I are making any profit, it will be fine to start... we both have other jobs and this is not our livelihood, and will have a roof over our head and food on the table.

I will send u the PM now with more... thanks!!!!!!!!!

[inle]

You are most welcomed..
I really do appreciate your feedback very muchl.

& yes, I think I got an unanswered pm..