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Profit split for a sales proposal

ckeltonckelton subscriber Posts: 2 Member

Having started a small business, I've been looking to start opening up some new sales channels.

Recently, I was asked to submit a sales proposal to a gift retailer, who are interested enough, at least, to consider if they will trial a few of our products. I've broadly put together the proposal itself, however, my difficulty is determining how much of a split of the sale price of each product I should offer or even what methodology I would apply to coming up with a number.

Having search for an answer, I haven't come across anything clear to me. I did read of offering a 60%/40% split to the retailer but I don't know if that makes it attractive to the retailer at all or if there is an industry standard practice for this sort of offering.

As a slight aside, I also realise that with already fairly narrow profit margins, after subtracting the cost of production for each product and then having another fish take a bite out of what's leftover, it will probably leave even less profit. However, if the proposal is successful, it would mean greater exposure and hopefully open up other opportunities.

Anyway, got to start somewhere and learn along the way.


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