Re: [AlpacaTalk] Marketing 101
Hi.
I have a question. Is the broker just bringing you a buyer, or does he have the animals on his farm providing feed, vet care, etc...?
I have a couple of consignment animals and provide that level of care.
The agreement is that if an animal sells for asking price, I receive x amount of commission.
If the animal sells for less, than the owner has to sign off on that and I receive the same commission percentage.
The buyer pays the owner, not me. So the owner knows exactly what the animal is going for.
I believe this sort of arrangement makes sure everyone is in the loop on what is being sold at what price.
Does this sound correct to you?
Gary
----- Original Message -----
From: Heather Zeleny
To: AlpacaTalk@yahoogro
Sent: Saturday, August 02, 2008 12:27 PM
Subject: Re: [AlpacaTalk] Marketing 101
Thanks Patti.
Yes, I was looking at it backward after speaking to this gentleman
yesterday. If you look at it as a mark-up from the "wholesale" price,
the way he explained it to me, then 33 and 50% are correct. It still
doesn't look like a good deal if I were the owner of these alpacas. The
sellers are pressured into taking the lowest price they possibly can,
then broker sells the animals for as much as he can get... then he
keeps the difference in the actual sale price and the owner's lowest
wholesale price. Still, 26 and 33% is twice what other brokers receive.
And what if broker sells at 2 or 3 or 5 times the seller's lowest
price? Does broker keep it all???
The way I have always seen commissions calculated is to take sale
price, example:
$15,000 x 10% = $1500 commission
Seller receives $15,000, then pays the commission, netting $13,500
$15,000 x 15% = $2250 commission
Seller receives the check for $15,000, then pays broker the commission,
netting $12,750
I am not aware of this type of brokerage arrangement in any other
business, and this is the only instance I know if even in the alpaca
industry. I don't think it is fair to the seller. This broker doesn't
actually do any more than other brokers I've seen, yet is really taking
a much larger cut of the sale price.
So, everyone is certainly free to pay anyone whatever they want, to
enter into contracts and make agreements. If paying a broker twice the
industry standard commission looks fair after looking at other
brokerage agreements, then I guess it's none of my business.
Heather
On Aug 2, 2008, at 8:57 AM, Patty Mattingly wrote:
>
> Actually your math is off a bit. If the broker makes $3500 off a
> $13500 sale
> his commission percentage is 26%. If he is able to get the full asking
> price of $15,000 he has a commission rate of 33%. Percentage is
> calculate by
> taking the profit amount divided by the total then multiplied by 100.
>
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posted by Chaddo at 10:38 AM
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