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lighting designer
 
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Joined: September 4th, 2013, 2:53 am
We have designed a lamp using rapid prototyping method and hand assembly. It has a unique look and is branded by us as hand assembled and artful lighting.

6 months ago while we were exhibiting and selling it in the gallery, we met an owner of a concept store who wanted to display and sell our lighting product in her store and we agreed that she would get 20% from every sale. She now sells our lamps in her store, but did not make a significant sales yet.

This concept store owner could be also categorized as a distributor / promoter; she has lots of connections with business people and recently she connected us with a retail store that wants to sell our lamps. The store asks for 25% from every sale and distributor asks for 10% from every lamp sale. We get 65% from final value minus materials and labor. They do not keep our inventory it is made to order with 4 weeks lead time.

Does it sound reasonable for store to keep 25% from final value and distributor to keep 10% from final value. Or should the distributor get some percentage for a fixed amount of time? Now it seems that if the store is successful with selling our lights this distributor will get 10% lifetime for just a referral. Store adds taxes, we sell without taxes added. Please help with your experience.

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Lmo
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Posts: 3965
Joined: January 20th, 2004, 5:29 pm
Location: Pismo Beach, CA
"Hand assembled and artful" aside, what sounds reasonable is for you to know what your product COSTS to produce, your percentage of profit, what your wholesale price should be, and what you want it to retail for to the public. Obviously selling oneies and twosies is going to cost significantly more than a series production, but if you want to make any money at this you need to cost this out on a production basis. Letting your "customer" tell you what they expect to pay will get you out of business pretty quickly.

Read this -> viewtopic.php?f=24&t=28912

You did not mention where you live, but if you are not collecting "sales tax", and do not have some form of "resale permit" from your state (U.S.) which authorizes you sell without collecting sales tax, you may find yourself on the hook should you be audited.
Lew Morris
"It's what you discover, after you know it all, that counts." _ John Wooden

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