Questions

I'd contribute sweat equity with $0 salary and 50% or more of profits. I was recently approached by a person who owns a retail e-commerce business to be a partner. He's already been having success selling his goods on eBay for a few years, and at one point he even had a retail showroom but moved to a smaller office due to rent increases. Currently, he wants to transition completely to selling his goods through a proprietary online store, which isn't set up yet. He has plans for how the website/online store will look and even has a developer lined up. I met this person while pitching my digital marketing services as an outside consultant, and I left with an offer for partnership: $0 salary and 50% or more of profits (he was throwing out numbers to gauge general interest). I'd be responsible for setting up the online store, moving the inventory to the online store, marketing it, and ultimately selling it. He would cover any and all costs associated with sales and marketing. I'm no stranger to making business arrangements via my consulting business, but I've never even considered such a partnership before. I'm currently unhappy with my work situation and theoretically, I'm excited about this new opportunity. I'm passionate about the product, and I'm definitely motivated by the hustle. Of course, I wouldn't enter into the agreement without some assurance of its potential for growth. What questions would you ask before making a decision?

Something you need to take into consideration (and most people forget) is to understand if the CEO is looking into the right numbers.

That's how investors also vet entrepreneurs. Are they looking to achieve the right goals?

For example, a successful e-commerce site always look to get as close as possible to 50% when it comes to the revenue that comes from returning customers.

Another big problem is the conversion funnel within the store. Is it good enough? Are they paying attention to it? Can they fix it if one of the steps is not working? (meaning: do they have the technical capability of make constant changes to the site?)

I wish you the best of luck!


Answered 3 years ago

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