Paying For Promotion By Another Business

Business By sugarspice Updated 9 Apr 2009 , 2:06am by sugarspice

sugarspice Posted 8 Apr 2009 , 2:02am
post #1 of 12

The owner of a local basket boutique is promoting local vendors in her store. While I was visiting her store for the first time it came up that I did cakes and she suggested I bring in pictures/business cards to have on display-which I have done. She is now asking that I pay her a couple dollars of each cake I sell as she is providing advertising. I think I should pay her something as she is providing advertising and I am not sure what is the best way to do it.
I wonder if a flat fee per month is easier-would it get complicated to track what cake order came from her shop? ie: a wedding cake that came from the exposure at her shop and I get an order from a guest at that wedding-does that count??
I think "a couple bucks" is low-the orders generated by exposure at her store will start out low, but (should) grow as there will be a caterer coming in next door, and of course, people love the cake! icon_wink.gif
I know it is a matter of what I think is fair-in the end, but I know that all the experience on this forum can give me some great advice!

11 replies
cakesdivine Posted 8 Apr 2009 , 2:22am
post #2 of 12

I would "tag" your cards and brochures with some identifying code. ALWAYS ask how the prospective client learned about your business. If they say "XYZ" boutique then they get the "referral" fee. I would put coupons for a percent or $3.00 off first order with the gift basket store's name on the back of the coupon. This way the customer gets a small discount on their first order and you know the coupon came from the lady's shop. So if she wants a couple of bucks per coupon redeemed, then you can budget that each client's first order that is referred from her will cost you $5 off your profit. Each subsequent order from that client you keep all the profit, since you now have their info, so they can't claim it is their first order, and you no longer have to give the shop owner referral fee off subsequent orders either.

Edited to add, don't ever pay a monthly fee to a shop for the right to put your cards in their shop. If you never get an order referred from them you have thrown your money away! It isn't like she will be actively promoting your biz, your cards/brochures will just be there, with the off chance someone will pick one up.

sugarspice Posted 8 Apr 2009 , 3:05am
post #3 of 12

Thanks Cakesdivine for your insight. I like the idea of a certain amount off coupon for first time orders. You make a good point against the fee per month idea. What do you think about "spin off" orders. Such as getting a wedding cake from her shop (pay referral fee) and then a guest at the wedding orders a cake--pay or not??

-K8memphis Posted 8 Apr 2009 , 3:20am
post #4 of 12

Is it just me or do you think the gift basket lady is greedy? I mean you're gonna list her on your website yes? It's reciprocal.

How many brides or party givers will seriously call you because you have a brochure in her shop? A caterer going in next door means you can go visit them and promote your own cakes. And again reciprocally list each other on your websites --if they don't do cakes themselves that is.

People buy baskets as gifts to give.

Brides do business with caterers and florists and dress people, not basket cases er I mean basket people.

I know I would not pay her flip for this. No matter how many referrals I got from it. I would not leave my stuff with someone like this either.

Fill my basket for me thoughts for you.

-K8memphis Posted 8 Apr 2009 , 3:23am
post #5 of 12

Just go get your stuff outa there. She did not talk about money before you put your stuff in there? This is irritating me.

KellBell22 Posted 8 Apr 2009 , 3:29am
post #6 of 12

I think I'm with k8 on this one. It would have been one thing if you asked to put the cards and info in her store. But she offered it to you and THEN when she saw people taking your info decided to charge you? Something is off there.

LaBellaFlor Posted 8 Apr 2009 , 4:39am
post #7 of 12

I'm with K8 on this one. Don't promote yourself as helping others, get them in, & then ask for kick backs. If you do decide to go there, NO, she DOES NOT get a kick back from clients generated by clients that found you through her. They didn't get the info. from her, they got it from someone else.

cakelady15 Posted 8 Apr 2009 , 12:27pm
post #8 of 12

I wouldn't give her anything either. I have people that pass my information out for me, but in exchane I pass theirs out and list them on my website. I wouldn't give someone part of my profits for putting my business card on their counter. That seems a little excessive to me.

cakesdivine Posted 8 Apr 2009 , 4:02pm
post #9 of 12
Originally Posted by sugarspice

Thanks Cakesdivine for your insight. I like the idea of a certain amount off coupon for first time orders. You make a good point against the fee per month idea. What do you think about "spin off" orders. Such as getting a wedding cake from her shop (pay referral fee) and then a guest at the wedding orders a cake--pay or not??

Spin off from an original referral from her boutique does not warrant her a commission. If you want to give the client a referral fee that is fine, but generally, if someone goes to an event that your cake is being served and they get your information so they too become a client, generally that is considered "word of mouth" and no referral fee need apply icon_smile.gif

cakesdivine Posted 8 Apr 2009 , 4:06pm
post #10 of 12

One question, are you listing her business information on your "links" page of your website? Are you giving her cards out to your clients? If so, she doesn't get a dime! Unless she is also willing to give you a referral fee for each basket she sells due to one of your clients ordering from her.

Kiddiekakes Posted 8 Apr 2009 , 4:14pm
post #11 of 12

I am with K8 also...Never pay a fee to have your cards etc on display in a store.You are not garanteed sales so why should you give them a cut.I would politely go get your stuff and kindly Thank her for allowing you to put it in there and leave!! Word of mouth is for free!! not a fee.....

sugarspice Posted 9 Apr 2009 , 2:06am
post #12 of 12

Ok, I will try to cover all the points-
I do not have a website, so there are not links going both ways.
She did not mention money until after I had my cards/picts there.
She is (so she says) encouraging the various vendors that are there to promote each other with referrals, etc. I do have some of her business cards to hand out--and you're right, there was no mention of MY fee if I got someone to order a basket from her..hmmm.... Yes, I will get my things out of there. I was arguing both sides of the referral fee in my head and I knew you all would give me opinions on "just the facts".
Thank you thumbs_up.gif

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