Salesmans Commision

[TTP]

What is a fair percentage to pay a salesman? Do you base if off the profit of the job or on the total sale?

I have a a great guy that is bringing in new clients and work and I want to reward him for the efforts, but I dont want to overpay him that new work becomes less profitable that its not worth doing. I hope this makes sense. So if anybody has some insight please share!

[totalautocare]

Profit with fair market price and go find the best price available.

 

Top line sales commissioning encourages unrealistic pricing during tempting scenarios.

 

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Edited March 25, 2016 by totalautocare

[HarrytheCarGeek]

What is a fair percentage to pay a salesman? Do you base if off the profit of the job or on the total sale?

I have a a great guy that is bringing in new clients and work and I want to reward him for the efforts, but I dont want to overpay him that new work becomes less profitable that its not worth doing. I hope this makes sense. So if anybody has some insight please share!

 

This is really a great question. I have struggled and continue to struggle with this question. I have made many mistakes dealing with this and have not really settled the matter.

 

The closest compromise that I have reached is that I have a sales team paid a base and commissions. For example, their work entails keeping up to date and servicing the account, plus deriving a 1.5 to 3% of the gross billing above the cost of their base. There is a one time commission on new account acquisition too. A very good sales guy should be bringing you about $2.5mm is gross business minimum. You want good credit worthy accounts that pay on time and no hassles collecting your money.

 

Having said that, this questions always leads me back to the most fundamental question which is, how much should I be making out of my business for my time and investment?

 

I am certain that you will reach a point where you will have to choose to take your money and run from the industry, or stay invested and continue to work in the business.

[flacvabeach]

You're not going to find a magic commission number. We worked with our business coach for months to establish pay matrices for techs and SAs that reward their performance, satisfy overtime requirements (very important) and meet our profit goals. If you can do all this on your own, you are a genius. If not, get a business coach.