Outside Sales

[TADPORTER]

If you were to pay someone to work for you, on a commission-only basis, selling your art and custom framing - what (as a percentage/before taxes) would you pay as a commission?

This person would work as a contractor so the potential tax issues are of no concern.

Is there a typical or average rate that can be expected? This is an honest question as I am considering this scenario.

This person will handle all design and customer relations (at customer home or business) and will deliver and hang finished product.

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Mike

 

[Dermot]

Michael

If this sales person looks after existing accounts I would go with something like 15 to 25%......and for new accounts the same but with an added once off bonus of say 30 to 50$ for opening the account….given the level of input this sales person is going to put in I would think this level of reimbursement would be quite reasonable……BTW be careful of contractual implications of using a contract sales person……in Europe there is ultimate little difference now a days between employing someone and having them on contract….and if memory serves me correct the legalisation in the US is now very similar……..contract employment is no longer the easy option that it once was…

Rgs

 

[Baer Charlton]

Originally posted by TADPORTER:
This person will handle all design and customer relations (at customer home or business) and will deliver and hang finished product.

Mike, what you are describing here is Transient Gallery. Commission would be the same. They get 50%-60% of gross sales.

If they are just repping your art: 20%
Frame design consulting w/customer: 20%
Gallerying the finished product: 20%

As an outside sales person bringing in framing work to the shop, I get 50% of the NET.

As a moulding rep, I get about 10%-15% of gross.
Finished frame reps get about 20-30%

Hope this helps
baer

 

[JRB]

Any salesperson worth their salt will give you a six to seven times return on what you pay them. If they can not do this, get rid of them.

If I believed the person was really good as they claimed to be, I would make them a regular employee, salary plus a small percentage of their sales.

I am not talking minimum wage, I'm talking a living wage. People will try a lot harder if it is their actual living you are providing. They will sell more, you will earn more.

Playing around with percentages, especially if you are an amateur at it, will only lead to disappointment.

The salesperson has to feel like they have something to lose if they do not perform. Hire them the same way you would want to be hired, give them a real job. Just make sure you are hiring a professional.

John

 

[TADPORTER]

Originally posted by JRB:
...I would make them a regular employee, salary plus a small percentage of their sales.

The salesperson has to feel like they have something to lose if they do not perform.

John

There appears to be a contradiction there, John.

What do they have to lose but a small commission in your scenario.

I would tend to feel that a commission-only arrangement would provide the most aggressive incentive for performance... you dont sell... you dont eat.

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Mike

 

[Baer Charlton]

Originally posted by JRB:
If I believed the person was really good as they claimed to be, I would make them a regular employee, salary plus a small percentage of their sales.John

John, No offense, but based on your statement, no really good salesman would work for you. (salery, not you personally.)

If an outside salesman is worth his salt, they know that they can run their commission income well past your salery cap.

If I end the year with only $5,000 taxable income, and have paid for: my car, insurances, phones, 1/2 my food, road lodging, travel, 1/3 of my clothing, memberships, reference magazines & books, computer, software, software classes, several lunches & dinners with friends/clients, seminars, education, conventions and several other things that I can't think of right now but my accountant does every year; then I would be a fool to take your paycheck @ $60,000 per year. And I know that was not the figure you were thinking was a living wage.

As an employer, your interest is to control costs.

As an independent agent, my interest is to sell more, and my insentive comes with making more commission.

I know some of those "saleried" reps. First appointment is 11am, 2 hr lunch and knock off at 4pm to fight traffic home.

baer

 

[JRB]

I've never hired a professional salesperson. I have taken on some wannabees. What I meant was after taking on these so called salespeople at a percentage (20%) they made a few sales and went on to other things. I've only done it twice in thirty years, disappointed both times. I thought if I ever did it again, I would make sure they had the financial motivation not to give up and quit. I am probably wrong, wont be the first time.

John