Commission only sales person

Xpertweb

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Jun 11, 2008
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Hello

I would like to hire a commission only sales person and also have a few people that are interested but I really need to know the law about how this works?

If I hire them on a commission only basis can I release them at anytime?

Any advice about taken on a commission only sales person would help.

David
 
M

Mass Appeal Designs

i'm also thinking of doing something similar, a company I do work for have commision only sales people who take 30% commission, they get paid before the client pays but if a client later cancels they get the money took off them in installments.

Do you think you can have commission only sales people but only pay them when the clients pays, I would ultimately like to have commission only sales reps who can pretty much work wherever & whenever they wanted as long as they were bringing business in
 
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Takeawayzjenny

I noticed you mentioned you were launching commision only sales. This is something we have been searching for, for sometime. I am interested in finding out if you outsourced this as we are looking for staff af present. I am also interested in your text services as i feel it would benefit our company that works with many takeaway food outlets can you get back to me in regards to this. Many thanks Jennifer Brown
 
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serendipitybusiness

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Jun 27, 2008
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If they are commission only the standard practice I have encountered when working commission only is that you are hired on a self employed basis. As far as I am aware you are pretty much home free when regarding employment laws this was as it is just like hiring a contractor. You can let them go at any time. If you want to double protect yourself have them sign a contract regarding codes of conduct and sales targets. I little tip is to advertise for ex cobra staff their training is the best I have ever encountered and after working for them you can sell anything. Most are snapped up by recruitment companies.
 
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As far as I am aware you are pretty much home free when regarding employment laws this was as it is just like hiring a contractor. You can let them go at any time.

If only.

I would urge you to get a ruling from the powers that be based on your suggested sales model, there are many commission only companies who are later held responsible for the agents taxes and NI.

In effect, if they could be employed they should be tends to be the argument, you definetely need a contract stating they are free to work for anyone else if they wish amongst other things, copies of business car insurance and so forth.
 
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dragonbird

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Jul 3, 2008
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Hello,

I have people who are willing to do the selling for me, I just really need to know the law when it comes to paying only commission based.

David

Hi David,

I have two documents that an HR company put together for me covering taking on self employed sales agents - one is a contract and the other a Self Employed Information Questionnaire for the prospective sales agent to fill out regarding their self employed status. If you PM me I can let you have copies of these. Also can I ask you where you sourced your agents?
 
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I little tip is to advertise for ex cobra staff their training is the best I have ever encountered and after working for them you can sell anything. Most are snapped up by recruitment companies.

I am an ex cobra sales team leader myself from the fundraising initiatives division. :D
Although they dont spend out large amounts of money on residential training courses like the other companies I have worked for, the ongoing training is amazing!

I do think however that their key is a constant motivational environment and I dont think I can stress this enough!

Its nerve racking to start with, they really do just throw you in the deep end after a few days (to be honest nobody expects you to achieve immediately, although your not supposed to know that lol), but they flush out those who will sink from those who will swim in the first week.
VERY hard environment, but very rewarding too. Multiple levels of promotion, where you can, like I did, also take control of your own recruitment.

Each office has their own traditions and methods. For example, my office would start at 9am, all divided into your teams with an hours product, sales or leadership training, followed by a short time for any form of questions (e.g. yesterday I encountered this, what would you do?), finishing with a motivational speech by the managing director. Then ending the actual sales at 8pm, you had half an hour to complete and submit paperwork. Then from 8.30pm to 9pm everyone starts to relax and unwind, have a chat etc, then get called into a circle. The music goes on loud, 3 different sized bells are placed in the middle and the lights turned off (with some flashing, moving light overlooking the circle). Everyone starts clapping in time with the music and you all just look at each other as nobody wants to go first lol.
Each sized bell signifies the sales achieved that day, 10-19, 20-29, 30+. You would walk to the middle, ring the bell, then walk around the inside of the circle with your hand up giving everyone a 'high 5' as they clapped!!
Up until this point, nobody was supposed to discuss how many sales they got.


Totally crazy, but GREAT motivational tool!


Well I thought ours was bad...
We were the selected 7 who went on a 2 week trip to the office in Northern Ireland that promoted TalkTalk. We had a meeting with the managing director / intro to their company etc, went downstairs to their sales teams before they started and all chatting about differences between offices, comparing training methods etc. When suddenly this cheesy music came on and they all jumped into line and started doing this strange dance, turning round, clapping under their legs etc. TBH it was so funny watching these men in suits dance like that and you could tell they were embarrassed in front of us. But that was apparently a motivational thing they do before starting on their sales for the day!



Another example is when our area manager would come to talk, which was always money orientated. For example he walks in with a load of cash, throws a £50 note on the floor and says 'whoever wants this, you have to run around the office, waving your arms and clucking as loud as you can like a chicken for 3 minutes'.


Sound strange? > Its all about comfort zones!
Anybody can sell while they are in their 'comfort zone', but real sales people can while outside of it.

The two main points that get drilled into you are:
1. Constantly pushing out the boundaries of your 'comfort zone'
( for example, a common technique is that the trainer / leader would stand at one side of the office and tell the sales rep to stand over the other. They then had to shout their pre-determined pitch across the office and everyone else loud enough for the team leader to hear it clearly. If not, or they stuttered etc they had to start again louder )

1. Religiously working by statistics
The most well known, and one I personally hated when I started, is 'The Law of Averages'. Basically when you complete a full pitch (not partial) to 100 people successfully, there are 88/89 that just aren't interested, 10 'on the fence' where you focus your sales skill to convert, along with 1 maybe 2 'logical' buyers that will automatically sign (unless you have done something drastically wrong).


Wow, I could go on and on... I didnt realise I had written so much, sorry :redface:

Anyway, theres an insight into the environment a typical cobra employee has come from. Very focussed, very target driven. However, their typical downfall is that the majority cannot work by themselves / be self motivating.

I am sorry to the OP as im sure this has gone off-topic. But since I wrote it I didnt see the point of deleting it
 
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Thirty Three

Hi,

I recently set up a person to work purely on a commission only basis and it has been great. They are basically self employed and I pay them £75 per converted deal. So the first month they pipeline and start proppoing the deals, then this month they complete and they invoice us accordingly.

Best of luck

'33'
 
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oldeagleeye

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Jul 16, 2008
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HR is right about checking out the IR35 rules which seem to be particularly target at IT subcontractors not limited company's as such. This is why a lot of self employed in IT sign up with an umbrella company as many customers will not deal with them fearing they will be responsible to tax and NI. Other sectors of business too have different rules. The building trade for one. In general though employing freelance or self-employed sales people is a good option for most business - if you can get the right people and that is difficult because the really top closer's want a decent basic salary and all the perks like cars - iphones etc + commission which can oftentake them into the £100K a year bracket.

There is however a way around that which I have found works in everything from retail - through financial services to specialist electronics and that is to advertise for part-time sales people for whom the extra income would make the difference between existing and living and what's more you do get quality professionals albeit maybe from other industries. I have just recruited a bank manager for example as a salesman for my business and I will shortly be advertising for former legal secretaries who may have had to give up full time work due to family commitments. Quite a good one that if I don't say so myself as they know how to get past other secretaries to the decision makers.

The bottom line then. Part-time with hours too suit. A tempting commission to attract quality sales people you would not otherwise get and finally. Commission only salesmen have an appalling reputation. Use freelance agent instead. Rob.
 
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Shaun_Pearce

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Jul 22, 2008
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Hereford
This is a little off subject but I wanted to find out if you will be providing the prospects to the sales person or would you want them to source their own.

Reason being I am offering a big discount to UKBF members on prospect data.

See UKBF Offers to find the deal I'm doing. Feel free to PM for a free trial.
 
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oldeagleeye

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Jul 16, 2008
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My policy has always been to generate some leads and give a few to each sales person and then see who performs best and then they get them thereafter because I am not going to waste expensive to obtain leads on timewasters. You should also encourage your sales people to seek referals rather than a complete cold call and they will no doubt like that idea. That way they can go straight to the decision maker in another business with "your friend or associate feels that our product may benefit you too" which rather than a hard sell makes them think they are getting a favour. Rob
 
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thedesigntailor

Hi

I have used comms only sales people - The main problem is they tend to do it while looking for a salary so theres a quick turn around and secondly none of them seemed to be very good.

Law wise I emloyed them as freelancers so there wasn't any rules about letting them go or suchlike so nice and easy to test the water.

Dan
 
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I too am looking at the moment for Media Advertising/sales agents at the moment to actively sell our web design services, studio space, marketing team,film equipment hire, distribution... the entire network of companies we have here!

If anyone knows anyone with own car/mobile and wants a challenging career with uncapped earning potential, then let me know
 
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officeangel

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Apr 20, 2008
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I can absolutely see the appeal of hiring commission only sales people, but I do wonder if it really is the way forward.

I'm essentially a salesperson, telephone and face to face, and I have never ever in my life worked without a basic salary ... I don't need to. I wonder if the commission only route gets you the best people to build your business. I wouldn't want someone half heartedly selling my business, nor pushing so hard just to get the deal because they desperately need the money.

One option that I've seen other people use is to hire people part time, pay them an hourly rate, keep them in your office so you can keep an eye on them and pay them a commission on what they sell. A higher cost admittedly but no compromise on quality.
 
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Mr_Wizard

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Jan 10, 2008
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Aylesbury
I've been following this thread with interest and Officeangel is right on the button - the best sales people don't need to work self employed, why would they want to take on all the risks and uncertainties associated with having their own business when they........haven't got their own business.

I personally would have massive concerns with a company offering self employed/commission only remuneration, starting with: (a) they don't have the money to pay a salary and benefits (b) they know the product/service will be hard to sell and need to avoid commitment.

I'm sure there are success stories but I'd be prepared to wager the unsuccessful ones outnumber them 20:1 or more.
 
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officeangel

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Apr 20, 2008
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Just as an example here I employed a marketing consultant a few years back to do some market research for me ... calling my contacts and asking for feedback. He was really very good, but I paid him a fixed fee for the project (£1500 for probably 10 days work). I've recommended him for lots more work.

The same guy did some commission only sales generation for a contact of mine, and he wasn't brilliant. She wouldn't recommend him.

Same guy, different motivation. I couldn't fault his work, she wouldn't use him again. For my work he got well paid, for hers he got no more than £200. Is he a bad telemarketeer ... no he isn't, he just works better when he's paid well.
 
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oldeagleeye

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I have to disagree with anyone that says that all commission only sales people are practically useless. You don't become a top salesman over night. You have to prove your worth before you can command a high basic salary and in the meantime those that are prepared to work on a reward only basis get the training and can earn a lot of money. It can also be a fast track to senior management.

As for not trusting any company that employs c/o sales. Pray tell me what is the difference between a self-employed IT contractor selling his own services and his taking on a sales team on commission only to help his business grow bigger quicker. Does he suddenly become less trustworthy. Is you milkman - if you have one not to be trusted because he is working on commission because we trust ours and he checks on pensioners to make sure they are alright.

A lot of all this of course has to do with semantics. Most of the reporters that we see on TV for example a Freelance journalists and I personally believe that the Freelance tag is the way forward for many small business given the amount of red tape on actually employing people.

I know one young couple for example worked damned hard for three years to establish their business and what happens they take a young girl who gets pregnant and she even treated that like an illness right from the start. The result my friends are back to working all hours under the sun and moon again to pay the girl to sit at home eating boxes of chocolates.

Don't be put off going the freelance route then but be fair. Pay expenses and a drawdown if orders take time to process and reward effort with a management job of some sort. A salaried position perhaps recruiting more freelance sales staff. Robert
 
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officeangel

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Apr 20, 2008
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The difference is that your IT contractor and TV reporter are freelancing. Freelancers by definition tend to be on a day rate, a rate that is higher than would be expected for someone permanently employed in that job to compensate for the fact that they don't have the benefits that come with a salaried job. And your milkman runs a business that he's solely responsible for (at least mine is!).

I don't think that commission only people are in any way less trustworthy, but I do think it's unreasonable to ask people without experience to work for little or no money and expect them to be highly motivated and committed. The most successful commission only salespeople should, by default, be the more experienced amongst us.

In my heart I believe it is only fair and right to pay people a reasonable wage for the work that they do, but that's just my view.
 
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oldeagleeye

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Don't want to get in a long argument Angel but most freelance reporters don't get paid a day rate. They get paid a commission on each story and then only for what the eiditor thinks each story is worth.

As for motivation that comes from believing in the product. I actually turned down a well paid job as UK Sales Manager for Sir Alan Sugar no less because his hi-fi systems were crap and no self respecting hi-fi dealer would stock them. Fortunately Woolworths came to his rescue and started stocking Amstrad. Me I went to work commission only for a mortgage broker. Within two years I had my own finance company. The biggest master brokers in the UK at the time.

As for your being all heart Angel. How much do you pay staff if you do employ any. Minimum wage. £7.50 perhaps £10 and hour. I am recruiting part-time frelance demonstraters at the moment. I will train them at my own and pay them £50 an hour. If they do well they will get a management job. If they do well at that they will get shares in the company.

Now ain't I wonderful. No - which is why I am not prepared to pay £200 a week for a full timer to sit at a computer and chat to friends all day either.
 
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daveashton

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Apr 14, 2004
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Hi

Great thread and hence had to jump in.

Ok you have two choices

Job 1 Basic + car+ mobile + good OTE + Training + Holidays
Job 2 None of the above but if you believe them and you could just maybe....if you are v good, and dont get ill, crash the car etc etc get a bit more money and the reason it is a bit is due to the fact that if you were any good you would be on great bonus'es from Job 1

Now all who of those who want job 2 please pm me and I have an offer you can not refuse!


Ok last point ( I am looking for lots of pm's though please and I do have offers for you on a pay as you sell basis and you could earn over 75K per year) is that one of the major problems with companies is the fact that they dont know how to find and motivate good sales people and hence they go down this amazing route.
 
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oldeagleeye

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Yea right Dave. Have you ever driven through the City in London. Well next time that you do take a look at all those great buildings. Most are owned by Insurance Companies. Most insurance companies employ sales teams be they brokers or direct sales persons that are on commission only. Get the connection.

There are genuine opportunities for direct sales on commission only out there and the rewards can be a damned sight higher than running a small web site waiting for business to come to you. I would not however include media sales in those opportunities especially these days.

Even ITV is struggling to get advertisers. Local radio is a joke and as quite a few posters on other threads have said the vast majority of mainsteam advertising is about brand awareness and not ROI. Rob.

NOTE. My web site should be up t/morrow night. Might be worth taking a look because you might find it a bit unusual what with the fact that you can't can't get beyond the front door and I am actually looking at ways to hide it altogether from Google.
 
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I worked in the insurance industry for 4 years. Initially I was offered a job with a salary allowances etc it seemed ok. I was in the companies honours club and finished 5th in the country. I was doing ok (or so i thought), but it seemed to me that the difference in MY earnings to the lazy buggers in the office wasn't as big as it should be. WHY? because my sales were subsidising their lazy asses !

I was 'contacted' by someone from an insurance company with an offer, I accepted it, and left for a commission only position. My earnings immediately doubled. After that there was no way I would have considered a salaried position , mainly because you are subsiudising the 80% of the workforce.

There i however no black and white way of doing it. When I had people working for me they earned HUGE amounts of money, but i HAD to keep them inline or else they would go off the rails. I think a lot of it is about management of your sales staff. if you support them well then they will be fine. I used to offer a salaried or commission only position. the earnings on the salaried position were FAR lower, due to the fact i had to pay them for doing nothing effectively.

I would start them, sit them down, tell them to listen watch and learn, and would warm call leads, make appointements, then take the guy with me the following day. At this point they had agreed to start, but still had the option of commission or salary & commission. After the fisrt day of selling I would tell them that they would have earned x if they were salaried, and xx if they were commission only. They had a week to make their mind up, but would not be paid a salary for that week if they brought no sales in, ie, they could not take the mickey ;)

Not many took the salaried option, and those that did, i released within a week or two as they were trying to pull the wool over my eyes. I even had one guy use my car while working for another company!
 
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oldeagleeye

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Nice one Taffy - if you don't mind the name. I think what all our negative posters have missed & it is an important point is that we are talking here about payment by results. Nothing more nothing less and EVERYONE that is in business works on that principal. Unless of course you have some fairy god-mother that pays your wages. Rob
 
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Xpertweb

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Jun 11, 2008
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Commission only sales does work if you find the correct person for the job.

I am happy with a person on a commission only basis, she is currently earning around £500 - £900 a week and she currently only has 1 years experience in sales so she is on a good salary for her experience.

She works as self employed but just sends me an invoice.
 
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officeangel

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Apr 20, 2008
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OldEagleEye ... you're obviously coming from a very different perspective. I have merely stated that in my opinion (and it is just that) that people deserve the opportunity to be paid fairly for what they do. I have questioned whether commission only is the best option for small businesses, and I stand by my view that it will not be a route that I will ever take.

Clearly you've been successful and done exceptionally well on a commission only basis throughout your career ... good for you.

It's a shame though that in order to defend your view point, you feel that you can question whether I put my money where my mouth is.
 
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