When to pay commission?

[wetgravy]

My point is that house accounts can easily become problems for the territory rep and can cost them money and affect their morale.

I can see how that could be a problem. I think it's also important to have meeting for sales people to discuss where they are seeking new sales with each other, what sales they are in the process of getting and over all have progress/review/critiques of how they all are doing, so not only the owner/manager can help ones struggling, but there is some sort of communal support amongst the sales reps even if it is just in moral support. Also helps in tracking of where sales reps are seeking outside sales to prevent internal competition.

 

[tcorn1965]

So if your sales rep bring in a company to do business with you. And that same company comes back 7 months from now comes back to the business directly to do another job - the original sales rep makes commission on that job? I dont think so...

That's how it works here.

 

[Locals Find!]

In my experience working as a commissioned sales person. For many different companies.

I always got paid this way. I got a base salary. (With a quota - i.e. $30,000 a month in sales) then a commission, and bonuses if I went over my quota in preset increments. Like if I tripled my quota I got a much bigger bonus then just doubling it etc..

My sales clients were my clients. I was supposed to handle them. If they called I was routed the call. When new clients called in or dropped in. The sales were given to the salesman on Floor time. We would switch off between us. Usually it was 4 hour shifts. Floor time basically consisted of one of us being available in the shop to handle the clients. Great time for paperwork and cold calling/setting appointments.

Now, if one of my clients dropped in. Needing help right away and the salesman on floor time had to handle it. Then I had to give up a chunk of my commission to them. For example, I was at 25% commission and if someone else handled it I only got 5% of my commission and he got his full commission. The sale wouldn't count for my quota only the other persons.

We also had a commissioned project manager that handled the clients past the intial stage. We figured out what the client wanted and wrote up the tickets then they were assigned a project manager depending on the department the bulk of the job project fell into.

If the owner had to take over a client or the Project manager had to take over our jobs. We lost out period on the sale. No commission whatsoever. We weren't doing our jobs at that point. So it was a quick way of reprimanding us.

If we didn't meet our quota 3 months in a row. We were out looking for another job.

 

[Wes Phifer]

A very large portion of your sales come from repeat customers. Colorado your sales guy has no incentive to maintain or develop that customer any more after the first sale. This could really be costing you.

 

[ProWraps]

if someone brings in a client, they are entitled to the commission on every sale that comes from that customer as long as they are still employed and in good standing, no matter who takes the order.

commission is paid when funds are secured from the customer.

the sales guy is building customer relations as well as a client portfolio for himself, and your company. he should get paid on all sales in his portfolio.

 

[cdiesel]

Thanks everyone. What Chris said above is exactly what we're doing.

 

[Brands Imaging]

when you guys are talking about paying on percentages are you talking about from the gross total number? or off of the profit??

 

[smdgrfx]

Commission off the profit only.

 

[cdiesel]

No, commission off the gross.

Calculating profit on every job would require hiring an extra person just to do that. No thanks. Prices are high enough to justify paying commission to get the sales.

 

[tattoo.dan]

good topic as i am about to add a salesman. part time, commission only(his terms) if he got new biz it would be his customers from then until he left. 20% first order 5% repeat orders...that is where we are starting next week anyway. we will see how it works.