paying a sales person

[pdig]

We are about to take on a sales person, however we are unsure how to pay commision. We would be paying a small wage and commission. Are we OK to only pay commission if a sales target is met?

 

[Gate2Shop]

There are many whom work on commission only, it is legal if thats what your asking. As long as targets are met then it is a good option.

 

[pdig]

we are looking to it as an incentive to meet the targets. Tried commision only in the past but never really got anywhere with it.

 

[wecandobiz]

Any decent sale sperson will expect a decent salary, plus uncapped commision based earnings with targets attached. This is the norm.

Commission only is not that common. There are a stack of threads on here about sales agents so take a look at them for some of the downsides!

IH

 

[PIGDOG]

It is critical that commission is linked to targets. You need to make sure that you come up with a package that suits your company & the sales person.
we pay a good salary + uncapped comm. 2% on target & 10% above target. If they don't hit targets they do not get a penny in commission.

 

[billie1]

I agree with 'Pigdog'. You only pay commission for targets met. I have just started a business and is thinking of getting people to work from home on a commission only basis. I guess if they're good sales poeple they would come onboard.

 

[wecandobiz]

I agree with 'Pigdog'. You only pay commission for targets met. I have just started a business and is thinking of getting people to work from home on a commission only basis. I guess if they're good sales poeple they would come onboard.

I disagree. Good salespeople have jobs earning shedloads. Why would they leave that to join a startup?

If you want good salespeople you have to pay for them. That means a decent income for them while you prove your business works and their uncapped earnings potential is there.

IH

 

[Deleted member 6566]

The incentive will drive the behaviour but if someone's selling lots for you why not pay them what they've deserved?

There's nothing sure to ***** a good salesperson off as changing the terms of their earning potential.

If they're successful you benefit so no-one looses. I'd say don't be greedy!

 

[Deleted member 6566]

Sorry guys! got tangled up between threads!

What I meant to say is this:

Commission only can work, but keep an eye on how well the salesperson is doing.

If they sell lots you'll be paying out a lot in sales commission. That's OK as long as you can fulfil the orders and pay the commission - everyone wins. Don't be tempted at this stage to change the terms of the deal with your sales person - it's not fair and, after all, they're bringing you in lots of lovely business.

If they don't sell lots they won't earn enough and will be off, maybe at very short notice, so you'll be without a sales team.

 

[who_me]

I think there are some employment law issues here... namely NI contributions, holiday entitlement, maternity and paternity rights.

HMRC are hot on so called 'self employed' folk that get the majority of their income form once source and tribunals don't look favourably on them either...

employment law isn't my strong point, but certainly worth checking the NI with a good accountant and the employment side with an employment specialist?

 

[maxine]

You also need to be careful of not falling below the national minimium wage too for comm only

 

[Speedymail]

Here we see again the problem of employers wanting good salespeople at the lowest prices. It doesn't work like that.

And the OP is quite correct about employers changing the terms or earning.

In my early sales days I worked for one of the big telecomms selling phones on the high street.

Our shop for a small store in comparison was blowing bigger ones in the same company out the water, as the team was very competative and a mix of the classic seductive saleswomen and well versed well trained salesmen. Then a new MD took over and in his eternal wisdom made it about twice as hard to earn the same amount by raising all targets on all products. This is common in telecomms, constant goalpost moving.
Most of the good sales staff had left within a few months.

 

[Speedymail]

We are about to take on a sales person, however we are unsure how to pay commision. We would be paying a small wage and commission. Are we OK to only pay commission if a sales target is met?

Also, when selecting as well as the givens like presentation.

* Ask to see previous sales figures (a good salesperson keeps them if their particulary good for the week month year etc).

* Make sure they listen as least as much as they talk, preferably listen twice as much but that is rare.

* Monitor their bodylanguage, it sticks in the subconscious. When you are interviewing you will essentially be having your prospective customers experience. Bodylanguage is hugely important and has easily double the impact of words. People generally buy the person selling if the product is any good.

 

[oldeagleeye]

QUOTE.
I think there are some employment law issues here... namely NI contributions, holiday entitlement, maternity and paternity rights.

HMRC are hot on so called 'self employed' folk that get the majority of their income form once source and tribunals don't look favourably on them either...

employment law isn't my strong point, but certainly worth checking the NI with a good accountant and the employment side with an employment specialist?

Obviously not. HMRC are only concerned about certain industries where it is obvious that big companies can exploit tax advanatages by making staff self-employed. The IT industry is one such area but even that can be got around by using an umbrella company or going limited.

In any event I think that this whole self-employed image should be turned around where sales & marketing and commission only payments are concerned and there are a lot of professional out there prepred to work on that basis as the returns are higher. There are also yet more professional in full time jobs who need to earn extra and so work part-time. Whatever. I believe that they should be given the same status as most journalists - ie Freelance.

 

[someday]

Only pay on Collections not sales, big difference !