On-selling a small/micro-business' goods. What kind of terms should I negotiate?

Someone I know has begun a printing business from home. She has what looks like an excellent setup. I have seen some of her products (printed t-shirts, printed trinket boxes, stickers, cups, stuffed toys, anything really) and I like them and I like the fact that she can do short runs of just about anything that can be printed! I had a brief chat with her about selling some products she makes. I have the option of working with her to get my own designs on my own chosen products, or on-selling her own stock. What are my options regarding how to go about this? I want it to be a fair deal for both of us, with equally shared risk and reward. She will be doing the majority of the production work - from most sourcing of wholesale items, to working up designs, to actually printing the products. I will be marketing the products and doing the frontline customer stuff. Depending on whether I sell her designs or my own, will decide whose label is on the products. My first thought is that I pay her production costs (minus labor) to get the stock and then share the profits of the stock with her as it sells. That way she is not at risk of loosing money on the production of the goods, except her labor costs, if the goods dont sell. Although I am at risk of loosing money on the initial purchase of the goods, I have the maximum room to move with price, to shift the goods if they are not popular. I thought I would perhaps retain the first 20% of the profits (to cover marketing costs and my own risk) and then go 50/50 with her in the rest of the profits to pay both of us for our labor. How does this sound, fair, unfair, stupid? Its just my initial thoughts but I would like to know what you think or if you have either a better suggestion or know how these dealings usually work.

1 year ago - 1 answers