Thread: anyone here work as a sales rep?

Does anyone here work as a sales rep? I'm trying to get an idea of what type of commission I should offer a sales rep..any advice appreciated (you can email me in private if you prefer)

Hi Jes! I worked as a commissioned sales rep for about 8 years. Although I haven't done so recently, I can offer some thoughts. Commission %'s depend on a lot of factors. I'll name a few:

1) Whether the person's pay is solely commission, or whether the person also receives a base salary. If the person receives a base salary, then the commission % is lower.

2) Whether the person is required to meet a quota before receiving any pay, or whether the person receives pay on anything they sell no matter how few. If there is a quota involved, the % of pay could run 0 to a small percent for sales made before quota has been reached, and then a higher % once quota has been exceeded. Sometimes there are multiple tiers. Ie, under quota would be small, up to 10% over quota would be somewhat larger, up to 20% over quota would be much larger, and 30% or more over quota would be really high. You can do as many accelerator tiers as you want.

3) Just a straight % of every sale, without the bother of a quota.

If I were you, here's what I'd do:

• Set a quota, whatever you think is the minimum you expect this person to do for you. You might already have a price point in mind that you use as a threshold for discounts on bulk orders by resellers. For example, if a troupe orders xx number of veils, you might give them a small discount - what is the minimum order size for which you would do this? That would be your quota.
• For sales made before the total quota figure is attained, pay the person a fee equivalent to the discount you would use if it was a troupe order getting a discount.
• For sales made after the total quota figure has been attained, pay the person an amount equivalent to the discount you would give a wholesaler who bought slightly over your quota level. For example, if you would sell to a small wholesaler who orders $xx in product for a 20% discount, then pay 20% to your sales rep until they meet your threshhold for your next level of wholesaler discounting.

Is that clear, or should I try to create an example?

Yes that makes excellent sense, thanks so much for posting the info. ..g.: What did you sell when you worked as a sales rep. was it computer tech related?
thx again!

I've done sales/mktng for over 10 years.

In addition to what Shira said, some other things you'll want to think about are things like volume - i.e commission structures usually differ for sales reps who service large "bulk" order customers vs. smaller retail outlets or consumers directly. Also, you don't have to use a percentage, you can pay a flat fee for a certain number of product sold. I.e., $1 for every veil, or $20 for every order of 25 or something like that. I speculate that if you're hiring an experienced sales person (which I strongly suggest) that they will also have an idea of what sort of compensation they think is fair. Note that they will probably expect some sort of expense account as well, if they have to travel, or set up their own office in their home, etc.

Also, territory is another issue, if you have more than one rep. Most places I've worked have different structures for different geographical regions based on the size of the market.

The best advice I can give you is to follow Shira's example of setting quotas...nothing sucks more money and resources out of a business than an unproductive sales rep. Quotas are your friend! They will help you ensure you're making money, will show you where (region, channel, etc.) you are making money and will show you what sales activities are not working.