Paying someone to run your E-Commerce website?

[theGuy]

The company who did our website has put an option on the table, which involves them taking over complete management of our website for a 20% cut for a minimum of 12 months..what they would manage is:

1. Visual aesthetics and features of the site
   
2. Manage/ send all newsletters, social media profiles, coupons , all offers
3. SEO across the whole website
4. THEY cover all SEO, server costs
5. We only pay 20% of all website sales.

If after 12 months we take over management, they will revert the website to the way it was when they took over. (sound fair?)

I would manage:

1. Orders, suppliers, non-technical queries
2. Agree pricing matrix for regular, special offers

Worth noting that our website currently generates about 1 sale/month (value = ~£50).

What do you guys think? If you went ahead would you agree some sort of targets with them? a break clause? Retain the 'upper hand' for brand protection?

Idea, thoughts welcome. Thanks

 

[Nathanael Jones]

If your business generates that little income, I would question the amount of effort these guys will put in for their 20% share.

A new ecommerce business is built on passion & determination - profits are often not seen for some time!

 

[theGuy]

If your business generates that little income, I would question the amount of effort these guys will put in for their 20% share.

Yes so in theory they would need to do more than 1 sale a month to be better than where we are already..Although the number of sales would need to go significantly up for it to be worthwhile for all parties.

 

[Nathanael Jones]

I guess you have nothing to loose - if 20% will sit within your margins & you have no other marketing plans already in place to increase sales. At worst you'll waste time & be disappointed,..

 

[Chris Ashdown]

So after building up a web site, after one year if you are for whatever reason unhappy and want to do your own thing they will revert the site back and at the same time make you loose all the work they have done to get you sales, presumably they will also hold access to your site and you can only download orders

My advice is to run away as fast as you can as they arebasically ripping you off as con men

There is nothing hard running all yourself regardless of you worldly knowledge, if you buy any of the shop in a box type software rather than the complicated open source software many designers use you will find the software very easy to do yourself, I would suggest something like www.sellerdeck.co.uk or any simular software

Whatever you need to be able to have total control over all aspects of the software, that still enables you to hire experts tomake changes but any they do make are then in your control

Sales are always slow at startup but many will try and con you over the commingyears as experts without any history you can check

 

[sirearl]

Never enter a deal that involves sales,always a percentage of net profit.

 

[benb]

It sounded good until "will revert changes" if you cancel, I would stay well clear unless this clause is removed.

 

[14Steve14]

Why would they revert the site back. That says to me that they have been paid to do something for you, and then when the are no longer needed they will dump you and treat you like muck. Surely you should keep what they have done and you have paid for it.

Run away: run fast and run far.

 

[japancool]

Great deal for them. No risk, relatively little time required (have they stipulated exactly what they're going to do in terms of newsletters, coupons etc? Do they know your industry and market well enough to effectively do all your marketing for you?). Do you care enough about your business to want to expand it?

Instinct tells me that your reply to them should be two words long, the second one being "off", unless you are effectively writing your business off as a bad job.

 

[Alan]

It is difficult to tell without specifics (product & pricing) but it doesn't sound a great deal for either of you with just 1 sale per month. What is the realistic growth in sales?

Can you sell your product on Amazon? They only charge 15%.

 

[10032012]

The company who did our website has put an option on the table, which involves them taking over complete management of our website for a 20% cut for a minimum of 12 months..what they would manage is:

1. Visual aesthetics and features of the site
   
2. Manage/ send all newsletters, social media profiles, coupons , all offers
3. SEO across the whole website
4. THEY cover all SEO, server costs
5. We only pay 20% of all website sales.

If after 12 months we take over management, they will revert the website to the way it was when they took over. (sound fair?)

I would manage:

1. Orders, suppliers, non-technical queries
2. Agree pricing matrix for regular, special offers

Worth noting that our website currently generates about 1 sale/month (value = ~£50).

What do you guys think? If you went ahead would you agree some sort of targets with them? a break clause? Retain the 'upper hand' for brand protection?

Idea, thoughts welcome. Thanks

Noooooooooooooooooo

These guys are fishing (not to be confused for phishing)

• Visual aesthetics and features of the site
• Manage/ send all newsletters, social media profiles, coupons , all offers
• SEO across the whole website
• THEY cover all SEO, server costs
• We only pay 20% of all website sales.
• If after 12 months we take over management, they will revert the website to the way it was when they took over. (sound fair?)

Translation:-

We will host so we hold full control of your website from hosting, to links and content and back ups, get full access to your customer base and potential customers (newsletters), set up a few social media profiles (10 minutes job), do SEO when we can be bothered and if you not happy we will revert things back to be spiteful.

Comparison:-

We will set you up a market stall that we will fully control with your products, control your customers, cover brand awareness/signage/advertising, whilst you man the stall, and we will take 20% of your turnover for making the stall look pretty and sending a few leaflets out. If you decide to opt out... we will take down the lovely sign everyone got used to with your brand on and leave you with a plain market stall and bad mouth you to customers using the market.

Advice:-

This gets my back up and I don't have a stake in the website. They designed you a website... they then want to improve it and host it for you... but want to revert it back after 12 months. At your existing sales level they wont be spending any money on SEO and hosting on a shared server/VPS/dedicated server is little outlay when you already have it.

They want full control to your website files, DNS (I assume), social media profiles, details of your customers ... and a big 20% VAT-like commission. You have cowboys, they want to hijack your website to insert backlinks as a service to a third party, managing the newsletter goes against the data protection act as they only want to spam people, and should you upset them your whole online existence is gone.

They have the ability to:-

• render your website offline (intentional, unintentional i.e. overloaded server)
• forward your website to any other, including competitor, their website or inappropriate content
• allow your website to get compromised by neglect - they may never fix it
• modify website content at anytime, which could get you banned from google
• email your newsletter customers with spam, phishing attacks, viruses or personal digs at you
• destroy your online reputation on facebook and twitter etc.
• backdoor your ecommerce script - they would need to keep track on what is 20% - this could be by silent email, database or even Bcc your customer details on to them
• lock you out of social media - they might tell you the password - but then change it so you cannot access it
• pull your website and run - will they return the files at the end etc.?

I would make sure I have the files etc. and laugh at them, whereas it might be an ~£80 per month income site forever and none of the above really is of any significance but it could grow to £30k turnover realistically speaking if you spent some effort on marketing.... In this instance its £6000 for hosting, basic SEO and doing a few social media profiles... but worse, building up a brand that they can destroy or damage the next day; from blackhat SEO links destroying your google traffic to a hacked website... its not a good idea of you are serious about the website.

 

[Bill1954]

They want 20% of sales ??? can your profit margin support this ??? As mentioned earlier, I wouldn't touch this with a barge pole

 

[Paul Norman]

Never enter a deal that involves sales,always a percentage of net profit.

This.

 

[Paul Norman]

And in additon, currently, your online business does not, in real terms exist - at the tiny volumes you mention above.

So the questions you have to face are these:

1. Do you know how to build it up, drive traffic, achieve conversion, create awareness? If yes, this offer is of no use to you. Do it yourself.
2. If not, who will provide the best expertise in those areas for you? It might be, but equally may not be, your website company. But it could be a business partner.

At the moment, this offer does not have the ring of truth above it, but seems naive on the part of the web company. To give a more full answer would require more detailed knowledge of your plans, other than to say this.

For a profit share arrangement of this kind get a VERY competent commercial solicitor to explain the contract, and it's long term implications, in extreme detail.

 

[Ashley_Price]

Like nearly everyone else has said here, this is not good.

Can they give you case studies or testimonials of other firms they have done this for?

 

[theGuy]

Provided we can get them to agree NOT to revert the website to its original state and also agree to the below then it does start to become a little more likeable I believe.

• 
  

  [*]render your website offline (intentional, unintentional i.e. overloaded server)
  [*]forward your website to any other, including competitor, their website or inappropriate content
  [*]allow your website to get compromised by neglect - they may never fix it
  [*]modify website content at anytime, which could get you banned from google
  [*]email your newsletter customers with spam, phishing attacks, viruses or personal digs at you
  [*]destroy your online reputation on facebook and twitter etc.
  [*]backdoor your ecommerce script - they would need to keep track on what is 20% - this could be by silent email, database or even Bcc your customer details on to them
  [*]lock you out of social media - they might tell you the password - but then change it so you cannot access it
  [*]pull your website and run - will they return the files at the end etc.?
  

 

[Ashley_Price]

Despite what everyone else has said, it sounds like, deep down, you still want to go with it. If that's the case then very little anyone says will change your mind.

 

[japancool]

Given how much the site is turning over, I can only wonder if you're serious about developing it as a business if you're choosing to go down this route.

 

[nudeytea]

Only one person is ever going to be 100% committed to a website and that is the person who thought it up and brought it to life

 

[FutureM]

No way, you can do those yourself if you care to grow your business.
Maybe if they said 2% - 4% of sales. You could consider it. Sounds like they are trying there luck to me and being way too cheeky.

 

[sirearl]

Only one person is ever going to be 100% committed to a website and that is the person who thought it up and brought it to life

Thats not true ,over the years I have developed other peoples business's into successful sites for a share of the profits.

Providing the product/s are viable its well worth a punt,far far better than designing/developing websites.