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chyna's avatar

What would be an equitable division of cost in this scenario?

Asked by chyna (51201points) December 3rd, 2021
5 responses
“Great Question” (3points)

Let’s say 35 people are in one store with crafts they have made and signed a contract with the owner that the owner would get 20% of all sales. Now the owner has said she wants everyone to pay extra per month depending on the amount of space you have due to increase in rent. Let’s say one person has a 4 foot table and another has a 6 foot table. She wants 20.00 from the person with the 4 foot table and 30.00 from the 6 foot table. And perhaps another thing to take into consideration is the fact that one person has more expensive items, so when he sells something, the owner gets a bigger commission.
My thought was to divvy up the increase by the same amount to all booths.
How can this be made equitable?

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Jeruba's avatar

I would say don’t even try to make it equitable. Was it equitable before?

Once you start with that, then you’re going to have people wanting to quantify best positions, best light, etc. People who sell fine jewelry are always going to make more than people who sell bean bags. They also have higher costs and liabilities. No matter what formula the owner comes up with, somebody is going to cry “But—!”

The question is, is each seller okay with the terms? If so, fine, accept them and forget about what other people have. If not, find another store.

Having said that, I’d add that making the increase equal to all sounds sensible to me. It’s like a restart on the same terms as before, with different numbers.

bob_'s avatar

I’d suggest increasing the commission rate, to, say, 22, 23 per cent.

flutherother's avatar

The system you had whereby the owner got 20% of sales seems fair to me and if that is in the contract then it cannot be changed unilaterally. If the owner wants you to pay more, she could increase the amount to 25% or 30% but only with your agreement.

Charging by display space doesn’t seem as fair as some expensive items don’t require much space and cheaper items might require a lot. I can see that system leading to arguments.

Another possibility would be for everyone to pay extra in proportion to their sales over the last 12 months.

JLeslie's avatar

I think it makes sense to charge per liner foot for the basic rent.

Depending on the building and traffic flow, it might make sense to charge more rent in certain locations. Near the door, on the perimeter, might be better than interior locations.

As far as commission, I think it could go either whether to charge a flat commission that is the same for all people who sell, or to charge different amounts friending on the specific contract with each vendor.

The commission part sounds like a pain in the neck. It’s not unusual, but it’s easier to just charge more for the space and let the vendors keep their revenue.

kritiper's avatar

Simply charge by square feet of space occupied.

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