commission on sales

[texasartist]

I am hiring a hot salesperson to do front end selling only (no framing). We do framing, wide format printing (giclees, posters, photos, etc.) and we sell original fine art, giclees, limited editions. We have resident artists and consignment.

I would appreciate any feedback about commissions you might be paying in such a case. I am heavily considering a draw against commission - commission being somewhere between 5% and 15%.

[lise]

I think that 15% is a HUGE commission. I would be more inclined to pay 5% and for any outside sales they bring in, maybe 10%. We too are thinking this through as we are hiring sales people.

[Dermot]

5%!!!!!.........this reminds me of the old saying……..”Pay Peanuts and you get Monkeys”

:rolleyes:

[Sharonx]

I doubt you will find a really good salesman for 5%. My husband was a gift rep for years and never took a line for less than 15%. This is pretty standard in the gift industry.

[JFeig]

When you say 15% is a standard rate, Is that rate based as an independent rep or as an employee.

An employee also gets vacation / sick time workman's comp. and the employee pays 1/2 of the Social Security and any other fringes such as health insurance and retirement.
An independent pays Social Security as a "self employeed". The self employeed rate is double that of an employee. A general rule of thumb is that fringes add an additional 20%-30% to and employers expenses over the actual "pay".

[Sharonx]

You are right. I didn't read the original post close enough. My husband was an independant rep and as such paid his own expenses, social security and insurance.

[Dermot]

If you are on a basic salary (wage) plus commission…the commission should be UNCAPPED and should realistically be able to add at least 30 to 100% + to the basic wage……I have come across so many businesses in the past who offer a wage and commission package but then cannot live up to the commission element of the deal…..the businesses in general do not have the synergy to drive the commission element of the package…..most sales people who will accept a commission element in their package CAN sell and have the confidence to accept the commission element…….it is usually the business that cannot meet the performance required……I speak from experience on this one……I have had all commission or part commission element in my payment structure for most of my working life…..problems have only arisen when the companies I have worked for could not meet the level of business I could generate.

Rgs

Dermot

[Grumbling Mike]

a few thoughts, these numbers could change depending on product margins advertising buget and sales support you offer

How much business currently just walks in
if say 1000.00/day -low commision on this first level say 5%
next level (upgraded sale) 1000-upto 1500 or 2000?
say 10%
above this or unrelated sales -cold called or networked (new business) 15%
large discounted jobs cold split the discount ie70/30 -20% off would cost them 6 points of their 15% or down to 9% of the sale
I think these levels give incentives to sell and close without discounting unnesesarily

[Dermot]

Mike you are on the money….I could think about working for you…….you have one of the most essential qualities when it comes to paying a sales person…….you give consideration to the numbers….upside of this for you is that you have created the atmosphere that if the numbers are not working the sales person will feel comfortable about talking to you rather than just looking for another job……which a good sales person will have no problem getting…….one of the best employers I ever had, had a very open approach to discussing the numbers……..we drove a 500% growth in about two years……..main reason for growth…..a well positioned business….an open and informed approach to what was wanted from the business…….the guy I worked for did very well…….and I did very well also……the guy I worked for was always looking at the numbers and how they worked……and how they could work for me also…..he was not lazy about running his business.

BTW this was when I sold laboratory supplies and equipment….the business acted as a distributor for a number of international companies in Ireland.

Rgs

Dermot

[ 09-17-2003, 04:13 AM: Message edited by: Dermot ]