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Sales commissions talk


#1

I need to talk to anyone out there who has salespeople who are
paid on commission. We are about to add our second one and I
need to find out how commissions are handled with multiple
people. Etienne, are you in this category? I know your store is
fairly large. Thanks to all.


#2

Hi Daniel, Salary or commission what a dilemma! How do you get
the most from your team and make them fell good about their work
too. I don’t have the ultimate solution, but many people have
made different plans work for their opperations. I pay a base
salary, health, dental, and life insurance, pension plan,
continuing education, and personal time to my employees. Our
sales people are on a commission basis where if their earned
commission is more than their base pay they earn the commission.
As a general rule I look for the cost of retail sales to be 10%
of less. Good luck, etienne perret


#3

Hi Daniel,

I do work for multiple stores, some commission, some not. My
observations of commission situations are that the individual
sales people often act like separate businesses. That is that
they are reluctant to help someone else’s customer or answer a
question that the shop may have because it is not their
customer. They just don’t appear to work together well at times,
and seem to put self interest above the stores interest. The
better method that I have observed is to establish a total store
quota, if it is exceeded then the employees, not just the
salespeople, (all but the owner) divide say 5% of the overage.
That keeps everyone working for a common goal and rewards the
group for working as a team to exceed the quota and helping one
another’s customer without reluctance. You still track
individual sales and reward them perhaps quarterly with credits
toward merchandise (its good to have them wearing your stuff),
gift certificates to fancy restaurants, etc.

Mark P.


#4

I have been a straight commissioned sales rep and have been on
salary. I have 20 years experience working as an outside rep.
working in the gift and textile industries. I am also a
part-time metalsmith. If I can help you with specific questions
about repping, e-mail me at @SRich610.

Sally Richards


#5

Hi Dan,

My wife/exwife and I were doing a wholesale biz completely
through reps (five of them) for 9 years. Not sure exactly what
you are looking for as far as info, but over all had very good
luck. they had specific regions that they covered and were paid
monthly on the accounts that we had been paid on. Our biggest
battle was working with, then later creating a database to keep
track of the 150, or so accounts along with the reps. If you
have any questions feel free to get in touch with me.

Jim Dailing
@jim_dailing


#6

Daniel,

As some others have already stated, commission sales is really
difficult to do on a fair basis, and yet to make sure your
customers are still being serviced in the best possible mannor.
I offer constant input to my sales staff that I will stop this
method at once if I feel any customer is not serviced in the
best possible way.

I offer a three tiered commission, based on gross profit. We
specialize in custom design, and do all manufacturing on premis,
so the variety of goods varies. I pay 1.5% on low margin items
like a class ring, and move to 3% for a standard keystone piece.
I pay out 5% for any piece that is sold above a key and a half,
and it is interesting how my margins have gone up since I started
that. I track sales weekly, and pay commissions monthly.

Yes, I do have some problems with my system, but the benefits
far outweigh the drawbacks. If two sales people work with the
same customer equally, I split the percentage. If I have areas
that are slow to move, I may move an entire department up to the
5% area, and sales pick up almost at once. If we discount older
items to move them out of the cases, I also keep the commissions
at the regular rate, and everyone is happy.

You should realize that whatever you decide to do, that you can
always increase the percentages, but don’t ever try to go the
other way. It won’t help your business to boost sales, and give
it all back in wages. It must be a “win-win” or you are wasting
your time. Good Luck, Mike