Changes to a Sales Agents customers and commission %

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rlellie14

Free Member
Oct 24, 2011
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  • #1
    Hi
    I work for a company which has used an agent (UK based dealing with UK customers) for several years. He receives a commission based on a % of the sales that he generates for several customers. Some questions:
    1. Where do we stand if we wish to take a customer off him to give another agent a crack at it?
    2. Where do we stand if we wish to reduce the % in commission he is making for each of these customers?
    Depending on answers the following questions may apply to both of the above:
    a. Are we legally obliged to pay him compensation for any such changes?
    b. If so how would the compensation be calculated?​

    Help much appreciated!
     
    O

    obscure

    Free Member
    Jan 18, 2008
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  • #4
    rlellie14 said:
    Hi
    I work for a company which has used an agent (UK based dealing with UK customers) for several years. He receives a commission based on a % of the sales that he generates for several customers. Some questions:
    1. Where do we stand if we wish to take a customer off him to give another agent a crack at it?
    2. Where do we stand if we wish to reduce the % in commission he is making for each of these customers?
    Click to expand...
    You have a contract with this agent (either in writing or verbally). Once a contract is formed it can't be unilaterally changed. Both parties must agree, unless there are specific clauses in the contract that would allow one party to change the contract. So, it depends on what the contract says.
     
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    lesliedocherty

    lesliedocherty

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    Jun 17, 2006
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  • #5
    Happens quite a lot with fashion agents, the agent spend years building an area for a brand, the brand gets sick of paying 10% and realise its cheaper to employ someone, so they bump the agent.

    Agent gets the union involved, and brand realise they need to pay compensation, so they pay the compensation.
    Employ a salesperson, 2 -3years later they realise that sales are way below what they were (they now have a salaried non incentivised employee), so they decide to go back to having an agent again.
    Yet again, a lot of agents aren't great, depends on the contract.
     
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    AlanJ1

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    Jul 25, 2018
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  • #6
    lesliedocherty said:
    Happens quite a lot with fashion agents, the agent spend years building an area for a brand, the brand gets sick of paying 10% and realise its cheaper to employ someone, so they bump the agent.

    Agent gets the union involved, and brand realise they need to pay compensation, so they pay the compensation.
    Employ a salesperson, 2 -3years later they realise that sales are way below what they were (they now have a salaried non incentivised employee), so they decide to go back to having an agent again.
    Yet again, a lot of agents aren't great, depends on the contract.
    Click to expand...

    And the compensation is huge if the agent has been working for you for more than 2 years.
    Personal case I know of where this happened and agent took to court, compensation for 2 years worth of commission was given.

    For the OP, it will come down to the contract, if it isn't there then you will have no way of amending it (they aren't going to agree to losing a customer or a lower % commission, I mean why would they?)
     
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    MBE2017

    Free Member
    • Feb 16, 2017
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  • #7
    Further to the above advice you also need to calculate the damage this could cause with any other agents you have, or wish to in the future. Such agents tend to know each other well, a couple of phone calls and your company might struggle to get anyone to work in the future.

    I used to use an agent in the electrical wholesale business, he had a large company do the same to him. End result I switched all the business to his new suppliers at cheaper rates, I used and dealt with the agent, not the end companies. Many others did the same.
     
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