Originally Posted by SugaredSaffron
This situation sounds odd, I'm not a big fan of the finders fee or whatever but I'm not against it. A lot of wedding planners don't use them and instead prefer you to pass on the discount to the bride, but it's not uncommon for planners/venues to do it the other way. They usually take a 10% fee from you and they are transparent about it. Luxury planners and venues do this quite a lot, we just don't know about it!
If a reputable external business is bringing you regular orders over $1600 for example then the 'kickback' is minor imo, and chances are you wouldn't have been able to secure those orders even if your cakes are great because of how they work. I don't know, I just don't feel that its that much of a shady way to work.
I totally agree!
Any reputable service business needs to generate income based on the services provided. If a party planner steers their business clients to your business they should reap some sort of reward, that is how their business makes money. Otherwise, what's in it for them? Seriously, there's plenty other decorators they could steer their client to. Do you really think they should pick you because you're superior? NO, repeat consistent business from a party planner is providing you with a service in return (it takes the place of having to spend money on advertising).
It's exactly like selling your product wholesale to a grocery store. The store has to net a profit or they can't afford to keep their doors open selling your product.
When your engaging in an exclusive agreement (a signed contract) with another business you have to give as well as take, somewhere, somehow. Otherwise your just networking with other vendors. You can network with other vendors until your blue in the face, you may never get any real business from those people. The people you network with may offer brides the names of several other cake decorators they like.
One way or another you have to pay to play. Sales people of food companies give Chef's "perks" for their repeat business....like taking them to a ball game (once upon a time they used kick backs directly given to the Chef, now companies don't allow that) or Chefs that buy XXX amount of products get a better price then clients whom buys X.
I'd never get into an exclusive agreement with someone I didn't know, nor someone I met on Craiglist! But we built a catering business off of just a couple party planners who generated constant business for us, so we didn't need to advertise, we didn't need a prime location, etc... In return, the party planner added a dollar or two, to our per-person price, plus they had a flat fee with the client for their general services.