A finder’s fee, commonly referred to as “referral revenue” or “referral fee,” is a commission given to a middleman or transaction facilitator. Because the intermediary found the deal and alerted interested parties to it, they are compensated with a finder’s fee. It is assumed that without the facilitator, the parties would not have discovered the agreement, and as a result, the facilitator deserves payment.
The finder’s fee may be paid by either the buyer or the seller of the transaction, depending on the circumstances surrounding the deal’s establishment or conclusion.
A finder’s fee, also known as a referral fee, is compensation given to the person or organization who connected a potential client with an opportunity in order to close a contract.
The specifics of a finder’s fee can differ from transaction to transaction, with a payout typically equaling a percentage of the successful sale; in certain circumstances, the “fee” is simply an unofficial gift.
A finder’s fee is a compensation and serves as an incentive to maintain business relationships and resources that represent an organization’s needs to potential partners or customers. Although contracts are not necessary in these types of agreements, formulating and agreeing to conditions for finder’s fees can help both parties stay on the same page regarding the extent of the compensation that will be provided. This might be especially helpful for contacts who bring the company new business on a regular basis.