Percentage for used amp buyer?

hotsnake · #1 04-20-2011, 01:11 PM

A friend of mine who runs an online and soon to be storefront used music gear shop wants to take me on as a full-time buyer (craigslist, ebay, pawn shops, yard sales, etc) and has asked me to come up with a percentage of the profit that I should be entitled to as a buyer.

Since I will be buying the gear with his money, I feel like I can't ask for more than 50% of the profit. My gut feeling is to ask for a little bit more than I should, but I don't want to piss him off either.

40% cut? 30% cut? I know this isn't real estate or law but I want to make enough to pay for the massive amounts of time I will be spending hunting down killer gear.

Thoughts?

bongomania · #2 04-20-2011, 02:19 PM

I'm a buyer, have been for years, and honestly it is a job like any other--you need an hourly or a salary. Whether or not he makes a profit, or how much profit he makes, is not your concern--it takes exactly the same amount of work to acquire a $100 bass as it does to acquire a $5000 bass. And he may decide to "cut someone a deal" down the road, turning what you thought was $100 for you into $50 or whatever. Or maybe there ends up being a dozen basses you buy that never sell, so you did all that work for zero profit and therefore zero paycheck. Fuggeddaboutit.

PDGood · #3 04-20-2011, 02:27 PM

Just a thought - If you're going to all the trouble to track down gear and negotiate and purchase it, wouldn't it be in your best interest to sell it yourself and make all the money? I'm thinking that running an ad on Craig's list/Ebay would be the easy part and certainly the cheaper part (you're spending gas money). If you don't have a lot of cash to start out with, buy something inexpensive, turn it and work your way up the ladder.

No offense intended to your friend who is opening a store, but these days online sites probably sell gear faster than an actual store front (which also has overhead).

fleabee · #4 04-20-2011, 02:33 PM

Salary or nothin. You'd be busting your hump for potentially nothing otherwise.

SurferJoe46 · #5 04-20-2011, 03:20 PM

The 'Great Ah-mur-i-kan Way' is to take 40% of the action.

Even if the deal only crosses your desk and even if you don't get a chance to rubber stamp it - forty percent should go to you.

There's a good reason for this too: incentives for you to get the best deal for the store owner and for you to maximize his profits from which that forty percent is figured.

These days a salary or guaranteed weekly nut is not gonna work for anyone and you'll be looking for a job somewhere else. It's HIS money and you can parlay that into some nice coin for yourself.

If you try to opt into a weekly salary - he'll suspect your working attitude and he'll always be watching that he's getting the most bang for his buck outta you - and nobody likes to micromanage --- nor be micromanaged.

ANYBODY can sit on their butt and take a weekly paycheck (however not for long) - but a hustler can make serious money for everyone involved.

If I was in a working mood and not retired - I'd jump the shark on this in a heartbeat. You get to view, talk to and make deals on gear with someone else's money and you make part of the profit.

That's too kewl to imagine and it's not using your capitol either.

bongomania · #6 04-20-2011, 06:13 PM

I'd agree except that hustlers are supposed to get PAID, and if all he's getting is a percentage of the profit, then there is a good chance he won't get paid very much, or very soon.

If you want to be a hustler, get your money up front.

SurferJoe46 · #7 04-20-2011, 06:15 PM

^^^ I'll buy the 'very soon' part - and this might be a labor of love for a while but I can see it paying off if he gets in on the ground floor.

My name is Mudd · #8 04-20-2011, 06:27 PM

Wage, not percentage.

Rockmusician · #9 04-20-2011, 06:29 PM

How do you make money while you are waiting for him to sell what you buy? You need a salary plus a percentage.

Pilgrim · #10 04-20-2011, 06:33 PM

How about a more basic wage plus 10 or 20% of the net?

tjh · #11 04-20-2011, 06:42 PM

.. the old saying of a quick way to end a good friendship ....

... FWIW, not sure of the volume you guys are considering finding, moving, splitting, but when overhead now becomes an issue, so does the determination of what is exactly 'profit' ...

... one of you doesn't need the other here, either you find and resell yourself, even if it is wholesale to him, or he puts you on the payroll ... and then you guys will get to 'discuss' what is time looking for product for him, and what is time looking for yourself .. LOTS of potential for disaster here .. JMHO

UncleFluffy · #12 04-20-2011, 06:44 PM

Quote:

Originally Posted by Pilgrim

How about a more basic wage plus 10 or 20% of the net?

That's what I'd suggest. Enough guaranteed income to keep the lights on and your belly full, %age for the rest.

After all, if he's not selling what you're buying, (a) where's the money for the wages going to come from?, and (b) you're buying the wrong stuff for his needs.

dannylectro · #13 04-20-2011, 11:30 PM

If you are not a partner, you are a wage earner. Salary + bonus.

hotsnake · #14 04-22-2011, 03:17 AM

I really appreciate the feeback here.

To clear things up, his plan is to start with an online business, advertising locally as well as nationally and on ebay and when the right storefront opportunity opens up move into that. The idea is that he would eventually hire me on as a salaried/wage employee, but only when the storefront opens and he needs someone to run it.

He has amassed about 10 grand worth of old Acoustic, Sunn, and other vintage amps and has consignment deals running with a couple of regional people with massive warehouses full of gear they are having trouble selling in their respective hometowns.

The business will be catering primarily to people searching for vintage amps/gear but will also stock some new brands as well. He will be carrying some new, high-end boutique type amps, effects, and cabs built by local makers. Also in stock will be replacement tubes, speakers, strings, electronic gear for the DIY types, as well as build-it-yourself kits.

I had already thought about the fact that the gear I buy needs to SELL before I get PAID, leading me to think about pitching him an idea where I buy something for a set price and he fixes the price for it's eventual sale and pays me up front a percentage of the would-be sale price. This, obviously, may be a tricky thing to pitch. At the same time, I could ask for a lower percentage than I normally would have since he would be paying me up front. I might make a bit less but he would come out better in the end.

The problem I foresee with pitching him the salary/wage idea before the storefront is that, while I know he trusts me, it would be very difficult to determine how many hours I would put towards the business per week, especially when driving time, researching time, and buying all have to be calculated by me. Do I keep a stopwatch with me?

Then again, maybe a flat monthly salary with a low commission would work better for him, as he would have the ability to reap more profit from higher ticket items and know that he simply had to pay me a per/month stipend to keep a flow of gear coming in.

In all, i'm trying to just be a part of the business until it gets off the ground as a storefront. The business plan is rock-solid and the competition in the area we are looking in is NIL with a high demand for what we will be selling. For the time being I'm just trying to pay my rent at home and the practice space and eat with hopefully enough money for gas to shows and to pitch in for recordings, touring, etc. I know I can be humble until things get rolling and when they do I will be poised to do quite well for and by my friend/employer.

This is some confusing **** to say the least. Let me know what you guys think!

Sundogue · #15 04-22-2011, 07:53 AM

If you feel uncomfortable bringing this up to him, just ask him right out..."I know you'll pay me if you sell what I buy for you, but what happens if I put all this time and effort into buying these things and you never sell a thing? How am I going to get paid then"

That opens the door to greater communication because now it puts the onus on him to be fair to you as well.

Have both of you already agreed, that in order to get this business off the ground, you are both willing to assume risks? He's risking his money and you are risking your time (and time is money). If that is the scenario, then you guys should be splitting the sales 50/50.

If he feels that his money counts more than your time, remind him that time is money. Your time spent buying things for him to make a profit on is your time that could be spent making your own money separate from him.

Many people assume an investor has more at stake. But let me reiterate...TIME IS MONEY. Wasted time is money lost.

baileyboy · #16 04-22-2011, 07:56 AM

Why do the leg work for him? Buy the gear and CL or ebay it yourself.

jimbilly · #17 04-22-2011, 10:51 AM

What happens WHEN you make a buy that loses money?, nobody is so good that everything they buy is going to turn a profit, -then there's the amp you buy off Craigslist that dies upon delivery after your friend sells it on ebay, who eats that?
What happens when you find a real gem, one that you could easily sell and keep all the profit? If you're on salary, you have to give that one to the boss, if you're a 'privateer' you get to decide if you share that one or not.