how do collabs work?

 

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how do collabs work?

i was wondering about how collaborations between small businesses work. i was hoping to work with a friend and have us both collaborate on a sticker design for us to sell, but i don’t really know how the whole payment aspect of it works. (i’m really new to all of this). do we use royalties? or do we agree to give each other a percentage of the sales? i feel like royalties make more sense, but i’m not sure, and i don’t know if i understand this properly?

how do collabs work?

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3 Replies to “how do collabs work?”

  1. Just make sure both sides are compensated for the amount of work they do.

    If he is just designing and you are doing all the sales, shipping, and customer service then you should get a majority of the sales. You could also just pay a one time fee for the design.

    Who is paying for the costs up front (who is taking more risk) – that should be considered as well.

    There is no right or wrong way here. Just need to make sure it’s fair for both sides. Since this is your first time, maybe come up with an agreement and then also agree to reevaluate the pay after 6 months.

  2. There’s no 1 correct way to do a partnership. Just have a conversation with each other and determine what makes the most sense to make it a mutually beneficial partnership.

  3. Collabs are a great strategy but think of it less as a sales strategy and more of a marketing strategy.

    The best outcome of a collab is quick exposure to the audience of your collaborator, and vice versa. So also consider the synergy of your two brands / profiles together. Is their audience the audience that you want exposure to?

    Then what to collaborate on. The product is the result of two brands working together so that makes it special. To keep it special, keep it limited. By keeping it limited it won’t be a major revenue stream, just make enough to pay for costs.

    Then how to recoup. Consider how it will be distributed, and how cost will be paid. To be fair, payback can be at the same ratio of contributions. Then any profit can be split if you are after the revenue, it can also be donated. That all plays into your marketing strategy to launch the collaboration product.

    Ultimately, collaborations is more of a marketing and branding strategy than a revenue generating strategy.

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