Possibly our most asked question - how much commission do we charge on a transaction? So let's get right to it - 10% is the most common commission we charge. The commission structure can vary based on your industry (see the next question for details), as we know that not every business can pay 10% of each sale.
Why 10%? Every business, literally every business has a cost of client acquisition, which means that it costs a business something to bring in each new customer: a retail store will advertise to bring people through the door, and pay clerks to assist shoppers in their buying decisions. A car dealership advertises on a variety of mediums and pays a commissioned sales representative to close the deal, or an IT company will pay a sales person a base salary plus commission to bring in a new customer. If you add up all of the money you spend on marketing, advertising and sales people over the course of a year and divide that by the amount of new revenue from new customers you generated, you will get your cost of client acquisition. You will find that this number is at least 10% in most cases, because acquiring new business is expensive.
Some prospective FORGE members have made the mistake of thinking they will need to charge their customers through FORGE an additional 10% for their product or service to make up for the commission they pay to TEN. But they must consider the math: every business has a Gross Margin - the difference between what it costs to produce or deliver a product or service and what they sell it for.
In some cases, it is easy to determine this because there is a direct costs to the product or service such as in the example of clothing retailer: they will purchase a garment at $50 from their distributors and sell it for $100. If they sell 10 garments or 100 garments, their Gross Margin stays the same, and the Gross Profit goes to cover costs such as staff, facilities and other overhead. When TEN helps the retailer sell garments, even if the retailer has to pay a 10% commission, or $10 off of each garment they TEN sells on their behalf, they are still receiving $40 they did not have before, and turning inventory.
In another example where a business operates on a basis of maximizing the utilization of its resources, such as an accounting firm, the business has a fixed costs - their employees - whether they are generating revenue or not. In a consulting business, such as this accounting firm, their 'inventory' expires every hour - the business can't go back to yesterday and bill for hours worked after the day is over. So for TEN to bring in new clients with billable hours, the accounting firm can receive a benefit of, say $150 per hour where the staff were not otherwise billing and such happy to pay $15 for each billable hour TEN brings them, as they are still left with a $135 they did not have before to offset their fixed overhead costs of staff, facilities, etc.
In businesses where there is a product and service delivered, such as in the case of an Electrician, the benefit does not change the incremental Gross Profit TEN provides the customer can easily pay the commission rate, leaving more money on the Electrician's bottom line.