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  1. #1
    You Bet Your Life...Really lerxtjr's Avatar
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    What Revenue Sharing to Pay Product Creators

    We're a promo company that has started to create web tools at client's requests and have some potential tools to sell on a more broad scale that surprisingly no one else has created. Any ideas what kind of residual/percentage/revenue sharing to offer my developers?

    I mean, we would always do the sales, support, take client calls, emails...

    The developers would only need to sit back and make an occasional update, y'know? At the same time, we want to give enough so that the developer stays interested in the project and in making updates when needed.

    Thanks in advance.

  2. #2
    Follow Me On Twitter: @djg gold trophysilver trophybronze trophy Dan Grossman's Avatar
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    It depends on the nature of the 'tools' you're selling... what price you're selling for, how many sales you expect per month, whether these payments are one-time or residual, and just how much ongoing maintenance you expect from the developer.

    For small, one-off payments, I'd put up at least 20%. If you're selling something that will bring in thousands of dollars a month per customer, and expect dozens of new sales each month, with clients that require a lot of support, then a single digit percentage might be enough for the developer. It's too vague to say.

  3. #3
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    Sounds like you are a publisher - book publishers will usually retain over 90% of all gross sales, authors typically get 8-12%. Of course, they would not be expected to continually update their work in order to continue receiving royalties on the initial publication, so you'll need to work out what's fair. If you have confidence in the product, you could always just pay them a one off fee and simply hire them to make any required updates.

  4. #4
    You Bet Your Life...Really lerxtjr's Avatar
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    Well, an example of one of our tools is a wordpress plug-in specific to being used with the combination of amember, wordpress and 1shoppingcart. So, we're figuring probably $35-$50-$75 for the plug-in with documentation or a a $150-$250 package that would involve us setting it up. The developer would probably have to "touch" each project that would require customization or the setup help. I'd bet on 300 installs by end of summer.

    Another example is an online transactions form and secure admin area for a specific niche market that's more in the $995-$1995 range with expected 1,000 installs by end of June. The developer will be creating the implementation piece so that he does not have to touch every install but can help as-needed.

    So, sounds like you're saying 20% for something like the first one and maybe 5% or so for the second based on those factors?

    P.S. We do have a couple of books we're written and a few author clients, but I wouldn't go as far as saying we're a publishing house. Tools are all for general business owners.

  5. #5
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    Quote Originally Posted by lerxtjr View Post
    P.S. We do have a couple of books we're written and a few author clients, but I wouldn't go as far as saying we're a publishing house. Tools are all for general business owners.
    I didn't mean book publishing literally, I meant your model (as originally described) is similar to any publishing model where an author (coder) has written a book (script) and you (the publisher) agree to turn it into a product and handle all marketing, sales and administration for it.


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