Commision Only Sale Roles

[stsource]

Hi

Has anyone had any experience of hiring 'Commision Only Sales' people?

We have brought out an exclusive product and we were thinking of hiring someone in the above role, it would be good getting some opinions.

Cheers

R

 

[Boris]

the deal has to be good as does the product, the turnover of staff is quite high unless you get it right, i have been comm only for over 20 yrs and know how hard it can be without the right package and back up, get those three right and you will find the right people.
Boris

 

[bargain.print]

I too am considering taking on a commission only salesperson. I have a chap coming for interview next week, but I am still unsure of the type of percentage I should be offering. I have decided to use a percentage of sales rather than percentage of profits as it will be easier to calculate. As this is the first time I have done this thought, I dont want to be giving away too much of my profits, but likewise, I dont want to insult the chap by offering him a bad deal. I will be negotiating with him, but some idea of a starting point would be helpful?????

Also, what about repeat sales from new clients he bring in? I was thinking along the lines of a reduced commission payment to him for the second and third orders from one of his new clients and then after that, they are ours. Is this fair???

Thanks!

Richard.

 

[investmentsense]

Having spent numerous years recruiting sales people, both as a recruitment consultant and as an employer, I have found one thing a consistent:

Treat people poorly or be too gready and they will leave.

Good salespeople will stay in a role if they feel they are being treated well and are appreciated.

For example: If a comm only sales person brings ion a new client and then you reduce the commission for all future business form that client, what are you saying? I appreciate you generating lots of profit for me, but once you have done the hard bit, I want all the reward! He won't stay long.

For comm only, you can expect a high churn rate. However, if there is a solid opportunity to earn a realistic living and it is being achieved , there is no reason for the individual to leave, especially if you continue to pay commission on all future orders. If the individual has the opportunity to develop a good pipeline with solid revenue streams, they are more likely to stay for the long term earnings, and therfore earn you more money.

As to how much commission to pay, this one is simple. How much additional business/profit is the individual generating for you that you would not previosly have received. So, as long as you are making money, make sure you look after them - pay well. What is wrong with a 70/30 split on profit in their favour, they won't leave if they are earning good money and know the conditions are good. The 30 is pure profit to you that you would not have otherwise had.

The dnager when recruiting is to be too clever or drive to hard a bargain, it will only come back and bite you in the ass later. If your sales people leave, chances are, so will the clients they brought in - people buy from people!

 

[lesliedocherty]

Not really, they should still be his customer, he done the work and got the customer, he should be still recompensed, maybe at a lower level.

 

[DreamLifestyle]

the deal has to be good as does the product, the turnover of staff is quite high unless you get it right, i have been comm only for over 20 yrs and know how hard it can be without the right package and back up, get those three right and you will find the right people.
Boris

Hi Boris

Are you situated in the UK?

 

[bargain.print]

Not really, they should still be his customer, he done the work and got the customer, he should be still recompensed, maybe at a lower level.

Fair point. So glad I asked on here first. The chap I am seeing seams to really know his stuff, and I don't want to loose him by offering a bad deal.

 

[MH1]

I have worked in commission only sales and would agree with the above. You need to set a figure where a good salesperson can make a good living, they are risking a huge amount by joining you a well, the outlay on fuel alone could amount to £1k before they even get paid.

I always found weekly commissions go down well with my guys, but most importantly pay on time every time, and consider holding a % back, maybe 5-10% of the commission as a retention to allow for cancelled orders, non payment etc.

I always hold only up to a maximum retention figure, after that they get the complete amount weekly. As mentioned if you do not look after salespeople they will not hang around long and that is a huge waste of everyones time.

Good salespeople will stay with a good opportunity, they don't want to be changing jobs monthly for obvious reasons.

 

[NewVix]

I just started my commission only job and even though I have been in sales and customer service for a number of years I am extremely nervous. I am hoping I to get over it my next week

NewVix

 

[bargain.print]

Thanks MH1. This is really helping me to put together an 'attractive' package. The last thing I wanted to do was insult the chap by taking the p*** with my offers to him. As rightly said, I now see that all additional profits brought in are additional, so should be looked at as an asset, not a cost.

Your post MH1 brings me to my next question. If working as a commission only sales chap, what expenses should I be covering do you think? I think I have decided that I will be offering 60-70% of profits to him as commission. I am providing him with an office here, so all his phone calls, postage etc can be done through our systems here. He is local to our office so that is not a problem. He has his own car which he will be using, but obviously there will be petrol costs when he goes out on visits. Is this something I should be covering on top of his commission? Sorry if it's a silly question, but I want to get it right and have never been in this position before!

Thanks

Richard

 

[bargain.print]

I just started my commission only job and even though I have been in sales and customer service for a number of years I am extremely nervous. I am hoping I to get over it my next week

NewVix

Good luck NewVix!!!!!

 

[MH1]

I am providing him with an office here, so all his phone calls, postage etc can be done through our systems here. He is local to our office so that is not a problem. He has his own car which he will be using, but obviously there will be petrol costs when he goes out on visits. Is this something I should be covering on top of his commission? Sorry if it's a silly question, but I want to get it right and have never been in this position before!

There is no right or wrong since different companies work in different ways.

With direct sales you have to be flexible to some degree in the early days IF you feel you have a good salesperson worth keeping, but in general the commission only salesperson would cover the costs of fuel etc out of their commission. If a new guy needs help in the first month you might want to advance 50% of sales etc.

Afraid to say it but you will probably have to go through a fair few guys before finding a hard worker.

Personally I would only ever offer such help to a good salesperson I knew from previous work, many guys talk the talk, very few walk the walk. Generally speaking, set your commission and pay period and stick to it, it's a good way of motivating them to go out selling.

 

[bargain.print]

Afraid to say it but you will probably have to go through a fair few guys before finding a hard worker.

Many thanks MH1. Your advice has been very valuable.

Fingers crossed for a good one. He is in his late 40's and has been with his previous employer for seven years in a sales role, so im hoping he is quite good.

 

[NewVix]

This has been an interesting day with sales. I guess being that this is the weekend I was bound to get few responses. As always I look on the bright side, every "NO" I receive is just my step closer to a YES!

 

[Boris]

Hi Boris

Are you situated in the UK?

In Lovely sunny London my friend

 

[NewVix]

I have a couple of prospects with my new sales job but I also want to establish my own website as well to become an independent distributor

 

[new2bus]

I think I have decided that I will be offering 60-70% of profits to him as commission.

Actually I think he meant it the other way round.

I can not see it working on profit, it will lead to arguments because you have control.

What exactly will he/she be selling? I would suggest you work out costings of the likely profit to arrive at a commision on sales.

If the salesperson can discount it really complicates things.