AFFILIATE--PARTNERING

A prestigious hotel in my area has called be to be one of their vendors, They will start offering wedding packages. I feel honored to begin with. They say they are conducting interviews right now, and will make their decision later.

I had the meeting with them this morning, brought samples and now they say they want me to present a price, that price has to be below retail, for what I understood.

Does any of you do this?, I am guessing it works sort of a percentage of the sales.
If my serving is at $4.00 I will bill them at $3.40, which is 15% my loss, right. But they will send orders my way, correct?

Which percentage is a good percentage?. Does any of you do this with Venues?

Any help or advice will be appreciated.

I am in the process of starting up my an agreement with a local cater. I told her my regular price, but would charge her brides 10% more than my regular prices and give her that 10% as a finder's fee.

I'm on a low-end already so I'm not gonna go lower on my price, yet adding the 10% is still a fair price.

OP...I don't know WHY...but the 10% tacked on to your BTB's cost just doesn't sit well with me. None of my beeswax...just a bit dishonest somehow.

minicuppie - I can see that. But the way I look at it is this - I am selling my cake to the caterer. I still get credit for it and the referrals, but once I told it, you can market it up if she wants.

The same as with any other product.

I would tell them that your price is your price, if they want to place their own mark-up on it then it is up to them. The only way I give a percentage to a networking vendor is if the volume they send my way justifies it. If they send me $10,000 in business in one month then I will give them a 10% referral fee, $5000 a 5% referral fee, anything under $5000 no referral fee. And they get that cut at the end of the month so some months they can get as high as 20% ($20,000 in monthly referrals, hasn't happened yet but one can dream ) or absolutely nothing if they don't meet the $5000 minimum for a referral fee. Honestly you could end up with only one or two cakes for the year from that venue or you could get one per weekend. You just never know.

They way I look at it, is , even if it is 2 cakes a year they send my way, its good, because I am just starting. No big deal if I don't get that other 15%. Otherwise I wouldn't have that sale in the first place.

Maybe when you are big company you can look at it the way CakesDivine loks at it, or is this a bad way of looking at things from business perspective?, even if you are small.
What do I know? I am just starting.

I would love to hear what do you all think.

I agree with OP...don't pass the cost of doing business with vendors on to the bride. This is something that should be budgeted in your business plan. Put it under advertising and deduct from your taxes.

Hey I am very small potatoes, I don't do a bunch of cakes a weekend usually only one and some weeks due to my other businesses, none because it is just me most times. My daughter is around some to help, and ever so often I get an intern to assist if necessary, but normally it is just little old me.

If you want to be big you have to plan big, dream big, and do like the big boys do, or else you will never get there. Honestly, once most taste my cakes they do want to hire me. The event halls that use me exclusively don't ask for a percentage because if I get a bride that hasn't chosen a venue I send them first to the event halls that use my services so the reciprocation is what is great! I send them just as many brides as they send me typically. I don't ask them for a referral fee and the event halls here that use me start at $3000 a day for rental, the highest one is $10000 a day if you rent the entire venue. If you just rent the banquet area and kitchen (they are a collective deal), then the rate is $7500. Wouldn't dream of asking for a referral fee.

I agree with cakesdivine, I don't pay anything. They refer to me and I refer back to them. That is the way it can be done with all vendors, photographers etc. It is just reciprical with no money being exchanged or passed onto customers