OT - Sharing Revenue

[Lyle Fairfield]

Suppose two small application development firms in separate countries have an
informal agreement by which they offer and (we hope!) sell each other's base
products (already created; eg a mortgage-loan broker application) to their
own client base?

Exclusive of custom work and direct marketing expenses, etc, in your opinion,
who should get what percentage of revenue from such sales?

--
Lyle
--
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The e-mail address isn't, but you could use it to find one.

[Nicole]

Lyle Fairfield <Lo******@FFDBA.Com> wrote in message news:<Xn*******************@130.133.1.4>...

Suppose two small application development firms in separate countries have an
informal agreement by which they offer and (we hope!) sell each other's base
products (already created; eg a mortgage-loan broker application) to their
own client base?

Exclusive of custom work and direct marketing expenses, etc, in your opinion,
who should get what percentage of revenue from such sales?

IMO, the person who wrote the app should get the lion's share, but the
one selling the app should get a commission percentage or amount
agreed upon in advance.

If the app requires support or customizing, of course, that's a
different animal. Perhaps the developers should decide on a base fee
to go to the original developer, and then charge the client the
appropriate rates for customization and/or support.

Nicole

[rkc]

"Lyle Fairfield" <Lo******@FFDBA.Com> wrote in message
news:Xn*******************@130.133.1.4...

Suppose two small application development firms in separate countries have an informal agreement by which they offer and (we hope!) sell each other's base products (already created; eg a mortgage-loan broker application) to their
own client base?

Exclusive of custom work and direct marketing expenses, etc, in your opinion, who should get what percentage of revenue from such sales?

50% - 50%

Without the product there's nothing to sell.
The product is useless if nobody sells it.

[Tom van Stiphout]

On 6 Jul 2004 13:09:21 GMT, Lyle Fairfield <Lo******@FFDBA.Com> wrote:

I'm leaning towards volume discounts. You sell the product yourself
for X. Your volume reseller can buy it from you for X - Y% if he buys
(sells?) Z licenses.
Perhaps Y=40%, and Z = <your sales for 1 month>.
You could get fancy and devise a tiered approach: 0-10 sales:
discount=10%, 10-100 sales: discount=25%, etc.

-Tom.

Suppose two small application development firms in separate countries have an
informal agreement by which they offer and (we hope!) sell each other's base
products (already created; eg a mortgage-loan broker application) to their
own client base?

Exclusive of custom work and direct marketing expenses, etc, in your opinion,
who should get what percentage of revenue from such sales?

--
Lyle
--
use iso date format: yyyy-mm-dd
http://www.w3.org/QA/Tips/iso-date

[James Fortune]

Lyle Fairfield <Lo******@FFDBA.Com> wrote in message news:<Xn*******************@130.133.1.4>...

Suppose two small application development firms in separate countries have an
informal agreement by which they offer and (we hope!) sell each other's base
products (already created; eg a mortgage-loan broker application) to their
own client base?

Exclusive of custom work and direct marketing expenses, etc, in your opinion,
who should get what percentage of revenue from such sales?

--
Lyle
--
use iso date format: yyyy-mm-dd
http://www.w3.org/QA/Tips/iso-date

Here are some opinions I have based on reading:

Secrets of Software Success
Detlev, J.
Harvard Business School Press 2000

"Microsoft, for example, spent almost $2.9 billion on marketing and
selling in 1997—more than 25 percent of its revenues, versus about 16
percent for R&D" --- SEC Filings

So perhaps 2/3 to the marketer/seller and 1/3 to the developer would
be more in line with marketing's relative importance. If you can get
more then go for it. But you did say, "Exclusive of custom work and
direct marketing expenses" which would swing things more like 60
percent to the seller and 40 percent to the developer since direct
marketing expenses will be large and thus deserving of a higher
percentage when included. A pharmacy web app I'm doing is going to be
split 50/50. I absorbed the entire cost of software development for
it. I still feel that sales is a much larger part of a successful
software venture than development. A lawyer would be able to give you
a better answer.

Here are some unrelated, yet interesting quotes from the book:

"... poor time estimates cause more problems than all others
combined..." --- Fred Brooks
"84 percent of all software projects do not finish on time, on budget,
and with all features installed." --- Standish Group
"It takes nine months to bear a child, no matter how many women are
assigned." --- Fred Brooks
"Stress causes 40 percent of all software errors." --- Robert Glass

Best wishes,
James A. Fortune

[Peter Russell]

James Fortune previously wrote:

"84 percent of all software projects do not finish on time, on budget,
and with all features installed." --- Standish Group

Doesn't sound like a representative sample to me.
They must have hit it lucky on the day they did the survey!

Peter

[Lyle Fairfield]

ja******@oakland.edu (James Fortune) wrote in
news:a6**************************@posting.google.c om:

"84 percent of all software projects do not finish on time, on budget,
and with all features installed." --- Standish Group

This implies that some software projects DO finish on time, on budget, and
with all features installed? Sigh ... I'm getting too old for this business.

--
Lyle
--
use iso date format: yyyy-mm-dd
http://www.w3.org/QA/Tips/iso-date
--
The e-mail address isn't, but you could use it to find one.

[OM]

Hire me as a consultant and I'll tell you......

OM
"Lyle Fairfield" <Lo******@FFDBA.Com> wrote in message
news:Xn*******************@130.133.1.4...

Suppose two small application development firms in separate countries have an informal agreement by which they offer and (we hope!) sell each other's base products (already created; eg a mortgage-loan broker application) to their
own client base?

Exclusive of custom work and direct marketing expenses, etc, in your opinion, who should get what percentage of revenue from such sales?

--
Lyle
--
use iso date format: yyyy-mm-dd
http://www.w3.org/QA/Tips/iso-date
--
The e-mail address isn't, but you could use it to find one.

[Nicole]

Three totally different compensation plans here. Although sales is
important, I think it ironic that a bunch of developers are suggesting
that sales people should get paid more because they work harder :)

You can turn that analogy around -- with nothing to sell, there's no
money to be made either. I personally didn't get the impression that
aggressive marketing was going to be involved, more like selling
vertically into one's own client base, although I guess it wasn't
specified in the original post. That could make a difference in what
would be defined as fair compensation.

Nicole

[Tom Mitchell]

Who will benefit from any followup work (presuming there will be
some)? The other party should then get the lions share. The exact
percentage to be determined by the relative amounts, recognizing that
projecting followup is likely to be inexact.
Lyle Fairfield <Lo******@FFDBA.Com> wrote in message news:<Xn*******************@130.133.1.4>...

Suppose two small application development firms in separate countries have an
informal agreement by which they offer and (we hope!) sell each other's base
products (already created; eg a mortgage-loan broker application) to their
own client base?

Exclusive of custom work and direct marketing expenses, etc, in your opinion,
who should get what percentage of revenue from such sales?

--
Lyle
--
use iso date format: yyyy-mm-dd
http://www.w3.org/QA/Tips/iso-date

[Mark 123]

I believe the following is the industry norm at present:

- Straight reselling : 70% Creator, 30% Reseller (see regnow.com for examples)
- Own pre-existing, pre-qualified client list, 60% Creator, 40% Re-seller. Sometimes up to 50% if they are very good clients or there is some other reason (e.g. marketing outlay).

Having said that, you are all welcome to resell our new product, Task Manager 2005 at 30%.... :) Details below:

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* team tasks, create customizable task reports, analyze *
* task workflow and more! *
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* Download the Task Manager 2005™ FREE 45-day trial *
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Contact sales------- at ------ orbisoft.com if you are interested in becoming a reseller.

Regards
Mark
"Lyle Fairfield" <Lo******@FFDBA.Com> wrote in message news:Xn*******************@130.133.1.4...

Suppose two small application development firms in separate countries have an
informal agreement by which they offer and (we hope!) sell each other's base
products (already created; eg a mortgage-loan broker application) to their
own client base?

Exclusive of custom work and direct marketing expenses, etc, in your opinion,
who should get what percentage of revenue from such sales?

--
Lyle
--
use iso date format: yyyy-mm-dd
http://www.w3.org/QA/Tips/iso-date
--
The e-mail address isn't, but you could use it to find one.