- They provide their distributors with something of value, for example, a monthly magazine or a replicated website that they wish to charge them for, but not on a monthly basis. So instead they charge them annually with a renewal fee.
- They wish each distributor to make a conscious decision whether to continue doing the business, so a small renewal fee accomplishes this goal.
- They wish distributors to help pay for the cost of providing customer service, so they charge an annual fee for “company services”.
We recommend that if you charge a renewal fee, include something of value in exchange for it. Don’t just charge a fee “because” without explaining what is being paid for.
If your company charges a renewal fee, how much is it? Feel free to leave a reply below.
If you need help deciding whether to charge a renewal fee, we can help you with that. I can be reached at 503.244.8787.