Retainer price for web/I.T. work?

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Hi guys,

Recently I have been in talks with a company about doing work for them. Initially it started out as search engine optimisation but now is expanding to be much bigger.

There are a start-up E-commerce site and basically they want me on-board part-time as their main Web/I.T. person, developing new parts of the site, helping with deciding what products to stock (technical slant to the products they hope to sell), and using technology such as pay per click advertising, boosting their Google ranking etc. in order to give the company more exposure.

The directors said they would like me to work off a monthly retainer fee + a still to be decided percentage linked to sales.

So in the next few days I need to come up with a figure for the monthly retainer. In the past whenever I have done work for people, it's on a per job basis, so I don't really fully know what this figure should be.

Any tip or ideas?

Thanks.

madmik

think of a number- then triple it!

Cringer

Make sure you're protected when if you sign anything.

Once, someone came to me with something to sign, and we had worked on a retainer, and basically what he'd typed out was to the effect:

"You will provide support when we need it."


No mention of time frames, how long the agreement would last etc. So basically if for whatever reason I didnt want to do work with them I'd have nothing in place to easily step away from the agreement.

So:
1. Get it in writing, making sure there are time periods i.e. trial period of six months retainer after which can be reviewed.

2. if this position they want you to do is KEY to their company role, then I cant see anything wrong with charging a retainer of 1000 - 1200 per month. If they need you badly enough then they can have you, at that price.

3. Be sure to state what the retainer is for i.e. will you drop anything else you are doing to satisfy them? What times is it from i.e. 9am 5pm?


Why not ask them what they feel a fair retainer is? If they say they don't know then say you've heard 1500 etc bounced around. They'll soon come up with a retainer figure for you then. It's all about negotiating at this stage. This link may be useful.

Good luck man, and remember, you are looking to build a long term relationship where both of you are happy. Dont go undercutting yourself whatsoever, as you'll soon start resenting the work/job and start looking for other offers.

antoinolachtnai

One way to think about it is that you are committing 4 days a month (say) to them. This could be at your regular rate and the rate could be set to stay the same for twelve months.

In return for your commitment, you will have to state what commitment you are making. You could say you will drop everything, or you could say you will make your best efforts to attend to their issues as a priority.

If they want on-call support, you may need to charge a premium for this. realistically, you would want to be allowing 25 percent of the original development cost per year to support an installation (I don't know if it's that sort of situation).

Make sure your basic bread and butter is covered in the fixed part of the contract. It's great to have the upside from the percentage, but make sure it's worth something.

I would try to base the commission on revenue (sales), or failing that gross profit. If you use gross profit, make sure there is clarity on how gross profit is figured.

Sonnenblumen

I think you might have potentially a 'golden egg' opportunity, so I would advise you cost your terms that would be most attractive to your client ie base rate + % of sales.

You can of course be greedy as somoone has suggested 'think of a number and triple it'. Thats bad advice and likely to be rejected immediately or in time.

Managing costs is critical during early growth stages, but as company matures and profits increase, that's the basis for profit sharing but that requires patience but also pragmatic cost control.

I commend the client for offering you the opp to participate in a profit share.