Working on a percentage-of-profits basis

One of my clients is a small "mom & pop shop" run by an older couple who really have no idea where to start when it comes to managing an online store. They sell spice & herb blends for seasoning food -- small-ticket stuff. I've proposed managing & marketing it for them, and they were open to the idea of doing it on a percentage basis (kind of like profit-sharing) with a fixed minimum amount monthly. Right now the site isn't making them much money, so this benefits them because my services will cost less while they're starting out. Obviously, the benefit for me is that as the site becomes more profitable, I'll get paid more. Additionally, this will work as an incentive for me to improve the site and its visibility/reach. This should be mutually beneficial.

Has anyone out there done something like this? What percentage would make sense? I don't want to propose something that's too greedy, but I also don't want to work on this thing for a year or more before I'm making my normal hourly wage.

I'll probably base the minimum monthly fee on the number of hours I intend to spend on this each month, but with a discount in consideration of the percentage I'll be getting.

Thanks!

This is great in theory, but, how do you know how much they make, and in turn, how much you should be getting paid versus what you're actually getting paid? I always had this problem with percentage-of-profit work: you never know if you're getting scammed.

This is not a problem in my situation. I'm running the shopping cart system and see every sale that comes through. There's no way they could give me a false number.

Are you confusing "profit" with "gross receipts"?

The shopping cart will not be able to tell you the profit.

True, but I'll probably base my percentage on gross receipts somehow. So, has anyone done this? And is there a percentage that sounds good? Thanks.

Anywhere b/w 10% and 40% of gross from web sales only.

Take into account how much work you'll be doing versus how much they'll be doing for one individual sale. Consider current investment and liability: how much do they have to put in from the beginning to get things going before they even begin to pay you (aka, cost of goods, etc)?

Your best option is to come up with an agreement that allows either of you to modify it if needed. Otherwise one of you begins to feel it's too much and neither of you end up benefitting from it b/c it fails.