Anyone used Freelance Commission Only Sales Rep's

[ScottMallonSportsCoaching]

OK so I am looking to grow my business and feel that a freelance commission only sales rep is the way to go. Motivated by money and an outstanding commission package would be my thoughts as offering basic salary and all the exes is not really a motivating factor I feel that commission only is all the incentive they should need.....

HOWEVER

What are the pitfalls of hiring freelance commission only sales reps ?
Has anyone used one and has positive or negative feedback ?
Can you recommend where you found yours ?

Any advice would be welcomed as the business is there for the taking just need to get the right person to get it in.........

 

[Merchant UK]

I think one of the major pitfalls in getting commission only staff is that they may bend the rules and truth to get a sale, you need to be 100% certain that their will be no mis selling, otherwise your going to face some big problems

 

[OldWelshGuy]

OK so I am looking to grow my business and feel that a freelance commission only sales rep is the way to go. Motivated by money and an outstanding commission package would be my thoughts as offering basic salary and all the exes is not really a motivating factor I feel that commission only is all the incentive they should need.....

HOWEVER

What are the pitfalls of hiring freelance commission only sales reps ?
Has anyone used one and has positive or negative feedback ?
Can you recommend where you found yours ?

Any advice would be welcomed as the business is there for the taking just need to get the right person to get it in.........

I read this as 'I am not willing to risk paying somone a salery to do my selling for me'

Commission only should have a hefty level of commission while at the same time having a competitively priced product that is attractive to potential buyers. Unless you have that you are doomed.

So what sort of commissions will you be offering then? what is the cost of the product etc? Because (and please don't be offended at this) most people who opt for comission only salespeople do so to offload the risk onto the sales person.

Don't get me wrong, we have in the past used CO salespeople and they earned damn good money, but we also had salaried salespeople who didn't want the CO position.

Another consideration is that if these guys are self employed CO salespeople you are not allowed to tell them when to work, are you aware of that? If you are controlling their hours of work etc, then they are employed, and you could end up in hot water.

 

[ScottMallonSportsCoaching]

That's brilliant advice and well noted! The commission structure I had in place was going to be a minimum of £500 per sale upto £3000 per sale.

Was going to give an added incentive that if they double the size of the business then they would receive a partnership & shares etc.

My theory is to be as transparent as possible and would like the sales person to be the same.

I do understand that the sales person runs their own time schedule and if they are not working then they are not earning so its their choice however I do want someone who is passionate and driven for the sales

 

[OldWelshGuy]

Don't offer shares, offer non equity remuneration, because once you issue shares you are tied.

We had a sliding scale commission that could be applied retrospectaively if they hit a seriously large over target figurre (make sure there is also a balancer i.e. last 3 periods etc, otherwise they will manipulate their orders to have boom and bust periods.

 

[llemmasc]

What's the product?

 

[Billmccallum]

What's the product?

I would echo the question, much depends on what the offer is????

That's brilliant advice and well noted! The commission structure I had in place was going to be a minimum of £500 per sale upto £3000 per sale.

Was going to give an added incentive that if they double the size of the business then they would receive a partnership & shares etc.

My theory is to be as transparent as possible and would like the sales person to be the same.

I do understand that the sales person runs their own time schedule and if they are not working then they are not earning so its their choice however I do want someone who is passionate and driven for the sales

Some people would be wary of such figures, if you can afford to pay £500 - £3000 per sale, why not do it yourself???? If you cant sell it yourself, why not?

I'm quite comfortable working on commission, but I'm also into ethical sales, I don't like to rip customers off, so I would want to assure myself that it's a valuable proposition for the customer too.

I spent most of last year working as a ppi consultant and had to tell some customers it was not in their best interest to use the services the company offered, which did come as a shock to some people.

 

[ScottMallonSportsCoaching]

The product is coaching seminars, etc and I run the seminars and don't have time to do both as I have already built it up. My aim is to have someone selling solely and me and a few others running the seminars.

All my products are ethical and I offer great value for service I just feel that offering a good package to sales person will keep them interested

 

[Tim R-T-C]

As I have mentioned before when this came up, a lot of small businesses see commission only sales reps as being 'risk free' - avoiding the danger of hiring a member of staff who could slack off and be hard to remove.

However, you are removing one risk only to gain a handful more.

No loyalty - if the rep is motivated only by money as you mention, then why would they stay in the position if a better gig became available? You could end up part way through negotiations with clients only for the rep to walk out and leave no information on whom they were speaking to, forcing you to start from scratch.

No guarantee of performance - yes a sales rep is motivated by money, but most will have a target earning in mind and when they reach this (a single sale with £3000 commission a month would be quite alright for me) they might be just as prone to slacking off as a salaried employee - in fact, since you will have less chance to observe them then they could be more prone to this, knowing they are less likely to be caught.

 

[telemax]

The product is coaching seminars, etc and I run the seminars and don't have time to do both as I have already built it up. My aim is to have someone selling solely and me and a few others running the seminars.

All my products are ethical and I offer great value for service I just feel that offering a good package to sales person will keep them interested

Put yourself in a potential rep's shoes?

Their questions would be?

How long is your lead time? What if it takes me 3 months to sell? Then I can't eat.

Why are you expecting me to take all the risk when you might not even pay me when I do get a sale?

How many have you sold?

This is why you will not find anyone. You might have better luck offering a basic plus commission, then once they trust you and they've built up some business with you, it may well suit them to move on to commision only.

No salesperson in their right mind would take that initial risk!!

 

[AvaCristi]

I think one of the major pitfalls in getting commission only staff is that they may bend the rules and truth to get a sale, you need to be 100% certain that their will be no mis selling, otherwise your going to face some big problems

That is true. Remember that they are after the sale so they would do anything to get it. Also one advantage of working with a company is that you get to keep the follow-ups and the not ready prospects. This will give you extra leads for the future.

 

[businessfunding]

I have used freelance salespeople extensively over the years and am currently building a sales team on this basis (using the opposite principles to my last business)

The key thing to remember is that they aren't being paid so they do need to be stimulated and rewarded - this must be partnership, not slave labour.

Also, try not to over-sell the opportunity or you will create a revolving door. It is hard - very hard to get the right people (for both parties), so you do need to work on getting it right.

 

[ScottMallonSportsCoaching]

Appreciate all your input guys and will make decisions based on advice!

 

[barryo]

Whatever method you use to reach your market, the start point should be thorough knowledge of your worst-case, best-case and average sales process metrics, and this is especially important if you want to use CO sales people.

A sales person's main limiting factor is TIME (assuming that they already have the necessary skills, motivation and a viable product or service), and there are two aspects of time that are important. First is 'actual' time, by which I mean the amount of time spent on specific selling activities and the conversion rates from one part of the process to the next. The second is 'elapsed' time, which is the total length of time from first contact to being paid by a customer ("C"). It's easiest to calculate these backwards from payment date to start of process. For example:-

C takes 4 weeks (average) to pay after delivery.
It takes two weeks (average) from order to delivery.
1 in 5 'prospects' visited (for average 1 hour) places an order.
1 in 20 phone contacts (at average 3 minutes per call) results in a meeting appointment (for two-weeks forward on average).

In this simple example, each order has taken 10 hours of actual time and at least 8 weeks of elapsed time.

These are the type of metrics that an experienced CO will use to decide whether it's worth it to them or not. The market rate for good CO's is around £25 and £50 per hour (actual time) and so in this example the commission would need to be between £250 and £500 per order.

Knowing these metrics is key to the recruitment process for CO sales people and monitoring them continually is key to maintaining motivation and value for both parties. They're also the basis for reliable sales forecasting, which every well run company should have.

PM me if you'd like to discuss further.

 

[Becci Swan]

Hi, I have a team with over 30 years experience in both B2B and B2C sales. We work on a competitive hourly rate and charge no commission whether we are getting you 5 meetings/sales or 20. This way we are only focusing on the quality leads for your business and not pushing meetings and sales that may cancel just to get the money in.
From the commission rates you mentioned in your post, this would cover many hours calling time so an hourly rate could be far more cost effective.
Please contact me at becciswan8 (at) gmail.com for further information and to discuss your requirements - I'm sure you will find our service of interest.
Kind regards, Becci Swan

 

[telemarketer]

When going for commission sales reps do one thing in the starting make list of important points, when you receive any generated leads from your rep conform it once again so you will be 100% sue you got quality lead.

 

[kate1]

Im probably just reiterating what people have said before, it would probably have to be a highly lucrative reward to do commission only - and I have heard how difficult it is to find people

 

[kate1]

If you can stretch to a basic and comms on top, would suggest Telemax or Maxine on here, both brilliant