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Types of Joint Ventures
A joint venture is an agreement between two or more individuals or businesses whereby both contribute to a joint business endeavor. They share in the expenses associated with the project and they share in the profits realized. Joint ventures are very common in the brick and mortar world, as well as, in the online world of Internet marketing.
There are basically two types of joint ventures….the Insider Joint Venture and the Outsider Joint Venture. Both kinds are profitable the difference is who the partners in the agreements are.
The insider joint venture agreement allows all parties to it access to the same private areas of the business such as the administration panel, accounting, sales records, and other insider’s knowledge. The product or service that is the focus of the agreement is usually developed as a joint effort by the parties to the agreement. Ownership of the product or service is jointly held.
The Outsider Joint Venture is the kind that is most common in the Internet marketing arena. In this kind of joint venture, there are no common administration panel, accounting or sales records. Each entity remains separate. Usually an individual or company has developed a product or service but has no customer base to market it to. The individual or company will approach an established marketer who does have a customer base, list or market share that would be interested in the product or service. They enter into a joint venture agreement where costs of marketing and profits made are shared. Sometimes there is an even split and sometimes the split is on a percentage basis other than 50/50. The joint venture enterprise can be profitable to all parties to the joint venture agreement and the cost of advertising is minimal. The joint venture is an old idea that is being made new again via Internet marketing.
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