What is the proper payment for a marketing consultant?
We are launching a business that intends to sell goods to a department store, preferably with an exclusive contract. Our marketing consultant wants 15% of the gross (15% of the contract value) which would be a tremendous amount of money. She says that normally marketing consultants get 20% Is this accurate? What should it be?
Hi Max,
Yes, that could be about right. Here’s the main thing to consider when it comes to marketing. Your marketing costs are one of the biggest investment costs you’ll incur for your business. Why? Because it is the thing that drives customers to you. Without customers, you have no business.
Instead of looking at marketing like it is an expense, look at it as an investment in your business success.
Are you willing to invest about 15%-20% of your profits to make a high percentage of money? If your operating expenses are, say, 15%, that leaves you with 60% profit. But, if you have employees, that operating expense number will be higher. So, let’s say that your payroll takes up another 25%.
After you calculate all your expenses, if you are still making 20%-40% profit, that could still be a good profit margin depending upon your manufacturing cost of goods.
However, you could just do the marketing yourself. All you have to do is get the training and have the natural aptitude to successfully and effectively do marketing. Take into consideration what a college degree for marketing costs. Let’s say anywhere from $40,000 – $100,000. If you had paid that much money for a degree, what would you expect to get back for your investment?
These are all questions to consider when you realize your marketing professional is an investment, the best investment I might add, you’ll ever make in your business’ success.
So, if you feel happy with your consultant, she seems qualified and capable, that 15% – 20% fee is very reasonable.
For more information about marketing that might help you, please see my website at
http://www.yoursecretwishes.com.
Create a great business!
Susan
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