Hey all,

So I run a side company. We gross about $20,000/month, and 45% of that goes to pay commission, the rest is “mine”. We get about 85% of our business from a large company, that has graciously taken a liking to us. Essentially, our company provides a gateway into the other company. So without using us, you cannot get access to them. So we have created an amazing service that allows people easy access to the big company. So they really like us. To be clear, the *customer* pays *us* to access big company. This costs the big company $0.

To be a little more detailed. The people we pay commission to enjoy working for us because they can do it while at their other job, and essentially make $25 per “job”, while at their primary job. And we have about 20 of these jobs per day, so they stay busy. But they like to do it because the more they do, the more pay they get.

While starting this “side hustle”, I knew that things would change. I knew that laws may change, they can grease the right pockets, etc. I knew this was a temporary business.

So, big company talks to us in a meeting today. They want to provide our service to their customers for free. They want to allow their customer to walk into their building, and get immediate access to us, for free. They want to pay us a retainer to have a person available during their business hours to perform the service we do.

So this would complete transform the business model. Instead of my workers getting commission, they would get a flat hourly rate. But at the same time the company is talking about all the volume they are going to bring, and how it’s going to be so many people. So my workers will potentially be asked to do more work, for less money. We honestly don’t know how much the volume would increase.

So basically they want to pay us to keep a worker available at all times to do the process to get them access to big company. Like they want it immediately available.

I’m guessing that we would charge them 2x what it would cost us to pay the worker to be available hourly. I struggle with that number because the worker would be about $70/hour. So they would pay us $140/hour to have a worker available to them. Anything less than that, and it’s not worth my headache to worry about having someone on staff to do the work they need done. But it also works out to costing them about $40,000/month to have someone available at all times. Which I don’t think they will go for. And I also think that they will see our model and how we do it, and realize they can just do it in house and hire their own workers to do the same job and cut us out completely.

I also think their idea to do this for free, but pay us to have a worker at the ready, is just stupid because what if they only need 10 jobs in the day. That’s like $700 they are paying for the day (10 hours), and that didn’t bring them that many customers.

Also, they mentioned how the volume is going to increase, but they don’t want us to be rewarded for the increased volume. They want us to just charge a flat rate, and not be compensated for performing excellently, providing immediate work, and dealing with potentially high volumes.

My gut instinct is to walk away. I honestly feel that 1. they may not realize how much their ask is fucking our business model, and 2., they will potentially copy us and just go around us as soon as they learn how we do things.

So to summarize:

Currently we charge per job. Customer pays us to access big company.
Big company wants to hire us to provide this service around the clock for them. But no longer charge customers, but they would pay us a flat rate.
Depending on volume, my workers could break even, or end up losing money compared to the work they were doing before this change in model.
I suspect big company will realize they don’t need to pay us to manage the workers, and will instead end up hiring their own to do the same job.
I don’t now how much I should reasonably charge. My company was used to making 55% of the commission. I feel I should charge 2x what it costs to pay a worker hourly.
We get about 85% of our business from this company. So if we don’t work with them, or if they move on from us, we really lose this client. And this client is basically 95% of the business for this in the state.

Questions:

What would you do in this case?
Can you think of any other way to structure this so that it works out a bit more in our favor?
Is 2x charge reasonable?
Whats your impression of all this?