I have a guy who I have been talking to who is in sales and is interested in coming to work for me. He has been in sales for 15 years and has been in sales for a VERY large sign company for 5 years. Primarily, he would be focusing on wraps, lighted and larger profit jobs (obviously). Does anyone have opinions on a base pay/quota plus commission structure that may be fair to offer him? I would like to offer him a probationary period of 30 day and then review.
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Outside Sales Person Question
- Thread starter SEOR
- Start date
Fred Weiss
Merchant Member
The two best and most successful sales people who ever worked for me wanted only straight commission. The next best one was trained by the first one. The worst were the ones who needed the security of a salary or guarantee.
My suggestion to you would be to offer the best percentages you can and, if needed, a draw against commission with expense reimbursement.
My suggestion to you would be to offer the best percentages you can and, if needed, a draw against commission with expense reimbursement.
mark galoob
New Member
just wondering how many people have outside sales reps working for them now...
mark galoob
mark galoob
pointjockey
New Member
Commission Only! Consider a percentage of profit vs a percentage of invoice.
We have 3 total including myself.
We have 3 total including myself.
kirkbauguess
New Member
I have 1 sale person. He gets 20% commission and we 1099.
Nash Signs
New Member
I have 1 sales person paid weekly on straight 10% commission of sales.
In addition we offer a bonus commission based on the overall monthly sales performance.
The bonus commission it broken into three tiers at 5%, 8% and 10% of overall monthly sales generated.
In addition we offer a bonus commission based on the overall monthly sales performance.
The bonus commission it broken into three tiers at 5%, 8% and 10% of overall monthly sales generated.
Lunatic Taskbar
New Member
Would it be worth asking him what his needs or expectations are. If both his needs and yours don't get close it won't work.
Ian
Ian
sjm
New Member
Base plus commission is a fair structure. Though if you offer a draw that covers off the base.
SurfaceSigns
New Member
As a business owner, no one is there offering a handout if the revenues come in short, we need to create business everyday just to keep the doors open. I view sales staff in the same manner. If they are confident in their abilities, they shouldn't need a base salary. In an industry like ours, I would say a commission of 10-20%, with performance bonuses as an added incentive, should be sufficient.
Frankly, if a potential sales person was asking for a base, I would thank them for their time and move on.
Kill what you eat, eat what you kill.
Frankly, if a potential sales person was asking for a base, I would thank them for their time and move on.
Kill what you eat, eat what you kill.
iSign
New Member
in an industry with so many custom considerations on every sale, & so little opportunity for set-in-stone pricing structures a sales person could have memorized, or typed out in a sell sheet... how do you guys protect against sales people under charging if they get a commission even on jobs I might wish they never took at that price?
When I train people to help me with pricing (which is not very often) I have them work up their thoughts on pricing, based on a knowledge of time & materials overhead, markup & shop rate figures, and the "perceived value" factor when appropriate... but then they run their numbers by me before giving the number to the client...
I am very interested in trying out an outside sales person, but this is the biggest area of concern for me. I know it is often best to close a sale as promptly as possible, so bringing the clients potential order back to me for final pricing might make sense on a large architectural sign package, or a large monument or electrical job.. but a lot of the $1000 jobs need to be sold on the spot.. but is it a $900 job, or an $1100 job? What's to stop a sales person from selling a $1100 job for $900, and then they only make $20 less & I'd end up losing $180.
Anyway, I need to learn how people deal with the pricing thing. Do you just teach them how to price so well that you trust them with any pricing situations that arise in their sales calls?
When I train people to help me with pricing (which is not very often) I have them work up their thoughts on pricing, based on a knowledge of time & materials overhead, markup & shop rate figures, and the "perceived value" factor when appropriate... but then they run their numbers by me before giving the number to the client...
I am very interested in trying out an outside sales person, but this is the biggest area of concern for me. I know it is often best to close a sale as promptly as possible, so bringing the clients potential order back to me for final pricing might make sense on a large architectural sign package, or a large monument or electrical job.. but a lot of the $1000 jobs need to be sold on the spot.. but is it a $900 job, or an $1100 job? What's to stop a sales person from selling a $1100 job for $900, and then they only make $20 less & I'd end up losing $180.
Anyway, I need to learn how people deal with the pricing thing. Do you just teach them how to price so well that you trust them with any pricing situations that arise in their sales calls?
SurfaceSigns
New Member
Some good thoughts and concerns iSign. Bringing in a sales person to smaller businesses like most of ours can be a tough pill to swallow, as we, as the owners, are used to full control of all aspects of the business. In activating a sales force, you have to be willing to "loosen the reins" so to speak, and give the sales team some leeway to create new business. And that in itself is the key - that they are creating NEW business.
The biggest mistake I think most of us make is reflected in the comment you make at the end of your post "What's to stop a sales person from selling a $1100 job for $900, and then they only make $20 less & I'd end up losing $180." You are looking at it that you may be losing $180, instead of seeing it as gaining a $900-1100 sale, a sale you possibly wouldn't have made without your sales rep out looking for the business. In our industry, we have the margins to absorb a price fluctuation like that (unless we are selling banners at $2 a sqft).
Keep in mind that the main job of a sales team is to be out creating new business, not dealing with the clients you currently have. They also have to preform, or they go hungry. Consider that at a 20% commission, the sales rep needs to bring in $20,000 to $30,000 every month just to make a decent living. That means an extra $240,000 or more in revenue for your business every year, for each sales person, which leads me to my next point...
While our first instinct is to complain about having to pay someone 20% of sales they produce, and then worry about them leaving money on the table to get the business (see above), we overlook the financial benefits that come with increased business. With higher sales, your business is (or should be) running more efficiently. You have greater buying power which can translate into lower material costs. Your shop staff should be producing more product working the same hours. If we took the time to add up the potential savings from increased efficiencies and lower material costs, I have no doubt they would offset most, or all, of the sales person's cost of employment.
I have learned that having a sales team is not for everyone. Some business owners have a hard time letting go, others fail to see the value a sales team can bring, and there are also those that are quite content with the business they have. Further, many have had bad experiences with sales staff, and therefore view all sales people in that same light.
So, before considering bringing in a salesperson, there are a few things to consider...
1. Can I let go, or am I a dictator for life?
2. Do I really want to increase business?
3. Do I have the Margins to support a sales commission and possible discounts?
4. Can I leverage higher revenues to increase efficiencies and lower material costs?
5. Can I work with the guy in the clown suit (your potential sales person) everyday?
6. Do I really want to increase business?
7. I'm not really a dictator, am I?
The biggest mistake I think most of us make is reflected in the comment you make at the end of your post "What's to stop a sales person from selling a $1100 job for $900, and then they only make $20 less & I'd end up losing $180." You are looking at it that you may be losing $180, instead of seeing it as gaining a $900-1100 sale, a sale you possibly wouldn't have made without your sales rep out looking for the business. In our industry, we have the margins to absorb a price fluctuation like that (unless we are selling banners at $2 a sqft).
Keep in mind that the main job of a sales team is to be out creating new business, not dealing with the clients you currently have. They also have to preform, or they go hungry. Consider that at a 20% commission, the sales rep needs to bring in $20,000 to $30,000 every month just to make a decent living. That means an extra $240,000 or more in revenue for your business every year, for each sales person, which leads me to my next point...
While our first instinct is to complain about having to pay someone 20% of sales they produce, and then worry about them leaving money on the table to get the business (see above), we overlook the financial benefits that come with increased business. With higher sales, your business is (or should be) running more efficiently. You have greater buying power which can translate into lower material costs. Your shop staff should be producing more product working the same hours. If we took the time to add up the potential savings from increased efficiencies and lower material costs, I have no doubt they would offset most, or all, of the sales person's cost of employment.
I have learned that having a sales team is not for everyone. Some business owners have a hard time letting go, others fail to see the value a sales team can bring, and there are also those that are quite content with the business they have. Further, many have had bad experiences with sales staff, and therefore view all sales people in that same light.
So, before considering bringing in a salesperson, there are a few things to consider...
1. Can I let go, or am I a dictator for life?
2. Do I really want to increase business?
3. Do I have the Margins to support a sales commission and possible discounts?
4. Can I leverage higher revenues to increase efficiencies and lower material costs?
5. Can I work with the guy in the clown suit (your potential sales person) everyday?
6. Do I really want to increase business?
7. I'm not really a dictator, am I?
mark in tx
New Member
Riffing on iSign and Surfacesigns posts,
Your sales person needs some kind of baseline pricing and markups.
If your cost to push a banner out the door is "X", then sales needs to know that.
If you expect sales to get at least 40% over "X", then that is the baseline for the commission.
Your sales person needs some kind of baseline pricing and markups.
If your cost to push a banner out the door is "X", then sales needs to know that.
If you expect sales to get at least 40% over "X", then that is the baseline for the commission.