Business question?

[Image Embroidery]

Interesting scenario...
Long time embroiderer closes shop. Shows up at my store with all of their designs on disc for me. This was about a year ago. Well, it generated a few small orders. The embroiderer that closed shop was still selling and farming all of the out. (not to me, obviously)
Well a few months back he stops by and tells me he is out of the busiess completely and would like to refer all of his old customers to me.
Sure...no problem.
The hard part is already done for this one large account he just brought to me...design is digitized, apparel choices are already established, etc.
Here's the question? What is fair, I would like to offer a percentage of the sale as a thank you, but I don't know what would be considered a "fair" percentage? Does anyone have any experience with this?
Thank you in advance...
Sorry to be so wordy...
LuAnn

[signman]

I'd think of it as a 'referral' or 'freelance salesman'.
For a 'referral' (I do it with radio ad salespeople, etc.)
I give them 10% or $25, whichever makes them happy.
If he is going to keep bringing in business for you, use him as a freelance salesman and commission of 10-15% if you can afford it-because you are using 'his reputation' to get the new business.
If it is just a one time deal, and the account is worth it- $50-100 per account would definitely make him happy.
Figure out how much advertising, time for cold call to customer, etc. would be worth to you for the business!

[Pure Embroidery]

Agreed. I offer 10% for referrel business over $500 in sales or 10% off the next order if the referrel is from a current customer. I do "freebies" of my overstock or mis-ordered items as thank-yous for smaller volume referrels.