Sales Guy

[Kaptain_K]

I have a retired sales guy who I am talking to re: becoming a commissioned salesman for my business. I am trying to figure out what a typical/reasonable commission % might be and what that is based upon?
I tossed out 15%-20% just as a negotiating point and he countered that he wants 33% of each sale!
I talked to a buddy who is a used car salesman- He said they get paid "33% After Pack" which is "After the overhead". That seems more fair to me, which would take his gross% down to 10-15%, yet would be 33% of profit AFTER the Pack, or expenses.
Any advice?
Thanks,
Kapt.

 

[af7850]

I recommend 10% commission on sales on company generated leads, 15% on salesperson generated leads.

If he requires assistance during the sales process, i.e. with pricing, the commission is reduced by 5%. If he is generating leads that are closed by someone else, he would get 5%. All commissions are paid upon job completion and paid invoice.

Depending on his skill and the capabilities of your crew(s), he will be able to make a very respectable profit.

Best of luck.

 

[spartan2]

The amount of commission greatly depends on his sales record and credentials. Ask about his sales history and how much volume he could create. How long has he been retired? Does he still have contacts in the community? I did something similar to this and I could help you out with figuring a commision package suitable for you and him.

 

[af7850]

The amount of commission greatly depends on his sales record and credentials. Ask about his sales history and how much volume he could create. How long has he been retired? Does he still have contacts in the community? I did something similar to this and I could help you out with figuring a commision package suitable for you and him.

I respectfully disagree. Commission works because it is self-regulating; a more skilled individual will automatically make more because of better prices and higher closing rate. Want a 50% raise? Increase prices by 15%, closing rate by 10%, add-ons by 15%, and referrals by 10%. Can't do it? Then you don't deserve it. Simple and effective.

 

[BC WetCoast]

I respectfully disagree. Commission works because it is self-regulating; a more skilled individual will automatically make more because of better prices and higher closing rate. Want a 50% raise? Increase prices by 15%, closing rate by 10%, add-ons by 15%, and referrals by 10%. Can't do it? Then you don't deserve it. Simple and effective.

So what do you do when a job gets underbid?

 

[smokinj]

So what do you do when a job gets underbid?

Good salesman will know where he stands and why and can adjust if need be.

 

[S Mc]

I was also going to caution on the "what if the job is underbid". At one time we had a commissioned salesperson...who consistently underbid jobs. We would end up not making money AND he still wanted his commission.

Get that figured out and written down in advance. It's not necessarily clear and simple either, because was the job truly underbid by the salesperson? or was it inefficiently worked by the crew. The sales person shouldn't have to pay for the crews' mistakes.

Sylvia

 

[smokinj]

I was also going to caution on the "what if the job is underbid". At one time we had a commissioned salesperson...who consistently underbid jobs. We would end up not making money AND he still wanted his commission.

Get that figured out and written down in advance. It's not necessarily clear and simple either, because was the job truly underbid by the salesperson? or was it inefficiently worked by the crew. The sales person shouldn't have to pay for the crews' mistakes.

Sylvia

good salesman does not under bid to get a job! he or she sales the people....if the people are there than he or she is not a salesperson..if they are not they move on...

 

[Toddppm]

Same would go for overbidding. You could easily sell some people jobs at $150-200/Mhr but how would that make your company look down the road?
Just look at the climbers forum where a guy sold a 5 hour job for $13,000! Might be good for the short term but....