So you want to start paying bonuses to your clients, be it from the volumes sold, prices or some other special conditions, there are some areas you want to determine and figure out for yourself prior to commencing those discussions and signing agreements:
· The basis you want to calculate the bonus;
· Do the math and make sure you won’t end up in a loss from sales because of the bonus – make sure you’re not giving away all your gross profits and that there’s enough left over to reach a profit after all the expenses are paid;
· Bonuses are a nice incentive for your clients, but make sure you’re not doing bad business;
· How often do you want to pay bonuses – monthly, quarterly, once a year;
· Are all your clients getting the bonus or just some you feel could benefit the most out of it (and you could benefit the most);
· How are you going to double-check you’re calculating the bonus correct? Trust me, your clients will also check that.
So as you can see, there are a few things you should consider prior to commencing any bonus agreement discussions. First and foremost you need to make sure you’re not cutting your own profits short because of it.