I am partnering with some intermediate-large outlet stores to make an online outlet store in Argentina which there are none with real stock as we will have. Plus, we will have the advantage of having all the items on consignation (from the brands) or/plus having a factory produce any best seller again (my factory). I am considering different developers which i will want to handle the SEO, social media, online marketing, email marketing, virality, a/b testing, logistics, picture taking, data entry, system and stock matching (retail and online), etc, so basically I am outsourcing everything to them. The options I am having range from 1000-6000 for the development of the e-commerce, and 500-2000 for the monthly maintenance. The most expensive ones are the most recommended ones but there is a great difference with the rest. He also is interested in being a part of the project, but he is offering me to still charge me 6000 for the site and 2000 for the monthly fee or 7%, whichever is greater. My question is, why should i partner with him if he is not absorbing any of the initial cost and he is not taking any risk on the monthly cost? (He is an open cart developer)

In my world, a partnership is based on sharing expertise and resources between two or more entities in exchange for a share of something, whether it would be a % of revenue or % ownership NOT that plus a fee. It has to be a win-win situation or it is more of a one sided agreement which will potentially cost you a lot of money, especially if he is developing your sites.

To be productive and profitable you must be able to monitor and highly influence the development but more importantly you MUST have a clear, definitive, documented agreement of who owns rights to what. You can be held hostage if someone develops your site as part of a loosely defined partnership and they decide they want more money or worse yet they want to high-jack the site and cut you out of the picture. Now this may seem to be a dire situation but I have seen it take place.

If you are the owner, you must have clear control and title to all the collateral, IP and coding. The best way to protect yourself is a good contract with set fees or partnership agreements.

Hope this helps.

Answered 7 years ago

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