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Adam,

Are you considering paying a referral fee for the introduction only, or just if you are able to secure the new account?  Personally, I would only pay a referral fee should business develop from the introduction, i.e.- pay a % of the first order's net.

I have helped introduce various parties with the potential for creating a deal, with the understanding that I have something to gain should "a deal get done."  I would not pay a referral fee just for an introduction, though.

As to the amount, I believe this depends upon your product, costs of development, your margins, etc.  Perhaps you can view the referral fee as your "marketing" cost; so whatever you were going to allocate for marketing to secure this account, that could be your fee.  Hope this helps, good luck!

Sean

Adam,

There are several parts of your question that have multiple answers:

•  if it's just a referral that gets you into a door and it turns into business then a one time fee would be appropriate.  It could be 1-3% of the first order of a set amount.  You need to decide the marginal and long term utility from this distributor or reseller
• if the person is providing continual support, then you border more on a manufacturer's rep fee structure.  Again most industries are 5% but you may consider a higher amount year 1 and then a sliding scale thereafter.  A few percentage points year 1 are not going to hurt as it will take time to fill the pipeline and for you to get paid.

Net:  pay should be commensurate with results and short and long term effectiveness of their actions.  Hope this helps ...

Best regards ... Hugh

Hi Guys,

 Thanks so much for the replies.  The short answer is that its really just an intro to another fella who is close with the buyer of this enormous retail chain.   Per Hugh's points  a flat fee may be most appropriate (one based on NET sales of course).  And Sean your point of only paying on an actual deal is dead on - Thanks!  The 5% figure is the one that I was familiar with but felt that in this case it might be too much for an intro and it appears to be.   I think I'll speak to him about a flat fee with a year end bonus if the deal works well.

Thanks!

Adam

Most golf retailers have product review panels that you would need to submit your product to. I have met most of them over the course of broadcasting The Leaderboard on ESPN and the operation of Leaderboard Marketing Group and can help with an introduction if you wish

Sounds fair to me