Paying Referral Fees to Designers as a Creative Subcontractor - Should You Do It?
I get asked this all the time! The answer is always yes - but don't just do it blindly. Structuring your agreement with referral fees (sometimes called finders or qualifying commissions) requires some thought and care.
In this post, we'll go over: what are referral fees and why should you pay them? When should you pay the fee? How much of the fee should you charge to keep things balanced with your designer / how can we calculate that? What kind of agreement protects us from liability on both sides and keeps us out of trouble legally with our clients / then how can we structure that to make sure everyone's interests are protected
I hope this helps! Let me know if you have any questions.
Every designer wants more new clients and more repeat business, but that's tough to achieve in the current marketplace with all the marketing options available to the average small business owner.
Math is math, so you have to find a way to make sure you're getting your value back when you pitch a project or refer a client. You can't just ask your designer for 50% (or whatever). Why not? That will just lead to all sorts of problems in the long run, both legal and otherwise!
When you pay a referral fee, it's simply an incentive for your designer to help you get new business.