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Revenue sharing for samples

We distribute samples for free but our partner wants to be paid 30% as revenue share as if the sample were actual sales. I usually account samples as distribution cost to be deducted from revenue however I do not know how to account for the Accounts payable of 30% to the partner.

Answers

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

"...but our partners want to be paid 30% as REVENUE SHARE"

My inclination is a reduction of revenue through a separate account...ala Discount.

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

Wait....I just re-read your post...

1. 30% of what?
2. Aren't you already paying someone for the cost of the samples? hence you are treating it as a distribution cost?

Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

"but our partner wants to be paid 30% as revenue share as if the sample were actual sales"

Your partner seems to think a sample is a sale. It isn't.
But if real sales you make result in them getting a 30% rev share, (is that share of sales or share of margin?), then I would deduct the cost of samples before calculating their 30% share. Samples help generate sales, I think.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

I'm wondering how they will survive paying a 30% commission.... but glad that's not my deal....

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