Make Connections

Network, Get Answers, Find Members in Your Area, and More!

Forums » Business planning

Dividing Profit in Partnership

    • 1 posts
    March 2, 2013 3:38 PM EST

     

    First of all, my English is not very good, so please excuse my poor writing.

    I am partnering with a footwear manufacturer/wholesaler in India to start a new online business to sell their shoes in Korea.  They have the products, and I have the everything they need to sell their shoes in Korea. (I have an ecommerce company, so we have a web designer, customer service, a warehouse, shipping deals, and most of all... know-how)
    We will be doing everything from taking product photos, to payment processing.

    They will be sending us 50 new designs each month.
    I do not have to invest in manufacturing. I just subtract it from the sales each month when calculating profit.

    Currently we are trying to decide on the percentage to split this profit.

    Roughly, profit will be calculated as below:
    total sales - manufacturing cost - shipping, import tax & credit card processing fees = profit

    What would you say is a reasonable way to split the profit? I have asked a few people for advice, and some say 20%:70%, some say 50%:50%. I am not experienced with partnering, and would like to hear different opinions.

    Thank you!

     

     

    • 56 posts
    March 6, 2013 12:48 AM EST

    As the designs are the only thing that you would be importing then a major percentage of profit share must be kept by you. Starting from a ratio 20 : 80 you must not settle it more than 30 : 70, as most of the efforts are taken from your side.

    ---
    Personalized Drinkware | KooziesOnline.com