Why Nest is going anti-commission
I want to speak openly about a practice within the industry that we feel has had its time.
The ecommerce ecosystem involves a number of players, and most brands work with external partners such as consultants, agencies and service providers.
It’s common practice for service providers with a shared target client base to make introductions to recommended partners for complementary services.
This is beneficial for clients as it can be a trustworthy way to find potential partners that are both credible and relevant to their business.
What some ecommerce businesses may not know is that sometimes these introductions come with a price tag for the partner.
We came across this practice as businesses would sometimes ask us for “business development terms”.
We started offering to pay a commission to people who asked for it to introduce us to their clients, and we started receiving commissions from partners that we made introductions for.
We would have made these introductions anyway, so it felt harmless.
However, we have been exposed to situations where consultants have made recommendations to their clients on which strategy to adopt and then recommended partners from which they receive a commission.
They are being paid a day rate by their client, but they are not being transparent about their full remuneration.
The end result is that they are making money on both sides of the deal whilst the client thinks they are paying them for independent and impartial advice. We strongly believe this is an unethical business practice.
With this in mind, we have decided to move away from any commissions paid or earned.
We believe that holding ourselves to a higher standard will make us a better business – and it will make the industry better too.