Paying commissions for referrals?
I am curious to see how others feel about either accepting or even requesting a commission or “finder’s fee” on making referrals to other businesses. For example, a pattern maker who refers their client to a sewing contractor and then gets a kick-back from the sewing contractor for the services rendered for that referral client. Do you do this, why or why not? What about a situation in which a client is referred them to Contractor A (who does pay commissions) even though Contractor B (who doesn’t) may be more suited to that type of product?
What if the referral were bad; from either the contractor’s perspective or the client/designer’s perspective? How would you handle this? How would the client feel if they knew you received the commission? I imagine people would not trust your referrals if they knew you got something in exchange.
I hesitated to post this because I had thought I needed to include my comments on the subject but at the same time, I didn’t want to color anyone’s responses either because I am very curious to hear what you all have to say. I decided to leave my opinion in comments instead. All I will say for now is that I know people do this but I never have. I have been asked by other parties who want to start a relationship, to pay referral fees but I don’t as a matter of policy. I don’t accept them either. Anyway, I’ll explain all my reasoning why in comments but would like to know what you think.
If you’re a designer, what would you think if you knew your pattern maker was having to pay a fee to the person who referred you to them and or, what would you think if someone were earning a percentage of the cost of your jobs? For service providers, I’d like to know if you do this and how it has worked out for you and your customers -do they know? Thanks!