How much do you pay a commission sales person?

[DBrock5150-]

I'm working with a friend who wants to work as a salesperson for me but we are looking more at doing this as a sales agency rather than an employee.

He will be bringing me work that I otherwise normally wouldn't have.

I know a lot of people pay a commission sales person about 10% but what do you pay an agency who you don't have to also take care of taxes, insurance, retirement, travel, etc..... At the end of the year you just 1099 them.

Any help would be greatly appreciated.

 

[2B]

why do a commission at all?

sounds more like a wholesaler or (dare I say) a broker. you have flat rates for them and they decide how much they want to mark it up/make.

 

[SLG]

My brother and I had tried this with less than desireable results. For example the person who claimed he wanted to be a sales person was supposedly a "friend" of my brothers. We started out by offering 25% of the net profit for new clients and 10% for residule business. Then came the lack of motivation after 1 month. 3 months and 10 potential clients later he landed 2 jobs which were not big money by any means. he got all discouraged and started demanding to know the cost of materials and services to better sell. I called BS and come to find out he was using his time to screw off and not do anything. In hind sight no outsider is going to care as much about your business as you do and the money aspect will definitely put a strain on your friendship. To put it a better way, is +10% of your bottom line worth what you could potentially gain. My opinion wait until you can offer base pay and commission and build a sales team. Money will always exploit a weakness in any relationship. Good luck.

 

[WildWestDesigns]

Also keep in mind that there are commissioned sales people that are keeping records of the people that they get for you and they might try to take them to where ever they are working next (heaven forbid that they take what they learned from you while trying to sell your goods to people and open up shop and undercut).

 

[James Burke]

Also keep in mind that there are commissioned sales people that are keeping records of the people that they get for you and they might try to take them to where ever they are working next (heaven forbid that they take what they learned from you while trying to sell your goods to people and open up shop and undercut).

JB

 

[binki]

For a 1099 just offer wholesale prices and let him sell work and collect for it.

If you want to employ them then you really need to not only have a commission percent but you also have to have sales quotas and if he isn't a professional sales person you are going to have to train him.

For a percent a simple answer would be 10% of gross and a 5% bonus for monthly sales that exceed a fixed dollar amount. Or, you can go off of margin and give a percent of profit, something around 25% of the profit and a spiff for going over a profit number of dollars a month.

 

[legacyborn]

A local company pays 30% of invoice and gives an office to his sale people. They are 1099 and only get paid for the work they handle, no residuals.

In my business plan, I'm looking to pay a base draw plus commission ($15/hour Draw on a 25% of Gross Profit commission on handled sales and 15% on residuals) There will also be a bonus schedule and perks (company iPad and paid gas on months where they exceed their goal by 20% or more)

I am expecting $200,000 in sales in the first year and a 20% increase minimum for the next two years

 

[BobCap]

I pay a straight 20% on sales. No base, no milage no BS.

Comission sales people are either really good - meaning they have sales experience and know how to sell.

Or not worth a **** - meaning no or little experience and not a self starter.

Unfortunatly they can help or hurt your business considerably.

If they are good they handle themselves in a businesslike manner and represent you with a good image.

On the other hand they can give you a bad image to the public.

From my experience I would tend to lean towards only having very experienced sales people, hence the 20% comission.

I also have a guy that basically resells product. He also now takes jobs to various shops for "quotes".

I try to handle most of the sales work. Less BS by far...maybe less sales also...