Today's episode is about the money side of things. Specifically, we are going to talk about the different fees an [00:01:00] agency might charge you as an influencer or a content creator. In previous episodes, we've spoken about how signing with an agency can be A really pivotal step in your career. Agencies can open doors to new opportunities and really help you elevate your influence.

However, this arrangement comes with a cost and it's important to understand the different types of fees that agencies might charge. Whether it's a percentage of your earnings, a flat rate or a performance based fee. Each of these different fees has implication on your earnings and your working relationship.

It's about understanding the value that you bring to the table and ensuring that the terms of. Any partnership are fair and beneficial to both parties. That's to you and the agency that is representing you.

Whether you're just starting out. or whether you've been in the game for a while. This episode will shed a little bit of light on what you need to know about agency fees. And at the end, we'll have some tips on how to navigate these discussions with confidence. In episode 19 and 20, we discuss the different types of agencies and the roles that they play.

For instance, in certain areas, there may be limitations on how much commission an agent can charge for specific types of performance work by an artist. This is to ensure fairness and transparency in the industry and to protect the artists and creators. These regulations can vary significantly from one place to another, so it is crucial for you to be aware of the regulatory landscape in your specific region.

A commission fee is a percentage of the earnings that an influencer makes from deals or campaigns that the agency books for them. This means that the agency's income is tied directly to the success of the influencer. If the influencer earns more money, so does the agency. Let's talk about some numbers here.

The typical percentage range for commission fees can vary, but generally it falls between 10 to 25%. This range will depend on a lot of factors, including the industry, the influencers market value. So what is your value? and the services provided by the agency. If you're a high profile influencer with lots of influence, you might be in a position to negotiate lower rates, which means more money in your pocket.

Since the agency's earnings are based on your success, the agency's really motivated to find lucrative and suitable deals. And this can be... especially beneficial if you are new to the industry and you need to rely on the agency's expertise and contacts. Something that's important to understand about commission fees is whether the commission is taken on the gross fee or the net fee because this distinction can significantly impact your actual earnings that [00:07:00] you take home, the money that you get paid into your account.

The gross fee refers to the total amount paid by the client for a campaign before any deductions. If an agency takes a commission on the gross fee, it means they calculate their percentage based on this total amount. So if the campaign pays, uh, say 10, 000 and the agency commission is 15%, the agency would take 1, 500, leaving you with 8, 500.

We've spoken about the positive side of commission based arrangements, there are also some other things that you need to consider. Commission based offer means that the agency will prioritise deals that bring in the most money, than, those that might best suit your brand, short, long term or long term career and financial goals.

Also, as your career grows, the percentage taken by the agency can really add up, leading to some influencers reconsidering the cost benefit balance of this arrangement. And as I said at the top of the episode, I am a big fan of agency relationships and in my experience as a former agent with 10 plus years experience in this space, if your agent is delivering great results and you have a productive, professional and respectful relationship with them, stick with them.

We're going to talk about flat fees now. Commission based fees where the agency earns a percentage of your income. A flat fee structure involves the agency charging you a fixed amount for their services, regardless of your earnings from a campaign. In this scenario, the agency will charge you a predetermined amount for specific services or campaign management.

In my experience, a flat fee model has really only been used on smaller scale projects where the value of the work was low and a minimum amount needed to be recovered by the agency to cover their costs. So the flat fee might be in the range of say 250 to 1, 000. We're now going to speak about retainer fees.

And it provides a steady stream of income into the agency and, for you, consistent support. It's not uncommon for agencies and influencers to agree on a combination of retainer and commission fees. In this hybrid model, the retainer fee covers the baseline services provided by the agency and the commission fee is applied to specific earnings or successful deals brought about by the agency's effort.

Now, occasionally you might have an agency. charge performance based fees, and they're a results orientated approach to agency compensation. This model varies significantly from commission, flat fee or retainer arrangements. It focuses instead on the tangible outcomes of a campaign. In other words, performance based fees are directly tied to the success of specific campaigns that you Participate in the.

Because of this, it is my recommendation to avoid these types of campaigns unless everyone's role in the campaign is really clearly defined. For example, if the campaign was to run for a certain term, but you didn't receive the product or brief until a day or two prior to the campaign beginning, and this prevented you from going live on campaign start date, or, the brand or agency had other obligations to fulfill that impacts your delivery of the [00:14:00] campaign, or you have...

no oversight to the metrics that might inform your income. These Performance based fees can be problematic. It is always my preference to work on campaigns with clearly defined payment amounts for your efforts. I have only engaged in a few performance based campaigns over my career with the talent that I work with.

And it's clearly my preference not to do so. We've now spoken about the typical fees that an agency might charge in relation to actual campaigns. I also want to cover off some service, operational, administration and other types of fees. And these are fees that the agency might charge either to you or to the brand.

And they can include things like a termination fee. So if you withdraw from a committed campaign, you've said yes to a campaign, and then you say no, or you don't deliver the campaign, or it fails to meet the required standards, an agency might charge you a termination fee. And this compensates the agency for their lost time and resources.

biographies, and other promotional content that the agency needs to bring you to market. Service fees are not uncommon, and these might be for specific services provided to you, or they might even be charged to the brand. So they might cover things like strategic planning, reviewing content, analytics reporting.

These are the types of things an agency might charge a fee of.

And the last fee that we're going to discuss today is a percentage of spend. Some agencies charge a percentage of the total campaign budget as their fee back to the brand and that's often used for larger campaigns with higher budget. Agency fees will vary greatly so it's important to have this discussion.

And those fees could well be justified. So at the very least, you need to be aware of what's being charged. Let's wrap up today's episode with some tips for you on negotiating your fees. Because negotiation is a constant process in business. And it's a skill that really needs to be honed. Regardless of where you're at in your career, every day I'm negotiating in some shape or form.

Number two is on presentation of campaigns. When a campaign is being offered to you, carefully review the documentation relating to each campaign that you're presented. Check for any additional or unusual fees. For example, a cancellation fee. As I said earlier, these can sometimes be mandated by the brand and your agent has an obligation to pass on the fee to you.

We'll dedicate a future episode to fees and negotiations soon. In closing, I want you to know that understanding the different types of fees an agency might charge you is an important first step in being able to negotiate those fees. You also need to understand your market value, be able to effectively communicate your worth while professionally and respectfully navigating those dynamics of your agency talent relationship.

I'll put the links in the show notes and you'll find all the episode resources and other recommended listening on influencer agency agreements at the businessofinfluence. com forward slash EP 21. That's forward slash EP 21. Until next week, stay creative.