posted
I ran an ad today for a sales person, so I can stay at the shop to produce more work. I am thinking of a straight commission of 10% over $1,000; & 15% under $1,000 per sale. With a bonus for sales over $10,000 per month. My goal is to reach $250,000 a year in sales with a sales person, myself and a shop worker/installer.
How do you deal with your sales people? Taxes? Cell Phone? Fuel expenses? Paid Training?
Before I owned my business, a shop I used to work at paid a 10% commision against a weekly salary & they were treated as subcontractors; paid their own taxes etc.
Any info & help would be appreciated.
Cheers!
-------------------- Rob Thomas 3410 Ketcham Ct Beautiful Springs FL 34134 Posts: 965 | From: Bonita Springs, Florida USA | Registered: Feb 2000
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posted
Hi Rob, you're going to have to check with an accountant/tax pro on the legal aspects of your pay arrangement. I think a commission on sales produced is fine, but when you get into a guaranteed salary with draws, it doesn't always pass the test for self-employeed.
But that's the least of your worries in my opinion. You need to be extremely vigilant in choosing a salesman who really brings you (clean) signed sales, rather than vague leads that you end up having to close yourself, or worse, having disputes over what was promised vs delivered.
A 'snow job' doesn't do it in customer relations. Your candidate must be fully knowlegable about the types of signs you make or you'll spend way too much time educating him and clearing up client misunderstandings.
Then there's approval sketches - I live by them, but a salesman has no concept of whats involved in that. "Hey, Joe Blow is ready to buy that sign, but he needs to see it in green now." "Yeah, he liked the green ok, now he wants to see some other type options". My ideal salesman would pay for those sketches out of his cut, or have the balls to add them to the clients bill. Every time you have to touch the sale should diminish his percentage to pay for your time. And how about goofs? Is he going to cover your butt when he screws up? Nope, he's going to shrug and blame it on the customer (or you).
Ok, maybe your experience will be different - God, I hope so. But to answer your question, I DON'T deal with salesmen, in any form. Sorry that's not much help, but maybe will get you thinking about your expectations and what you will demand from him. It's a potential mine field. Best of luck.
SONGPAINTER Original Sign Music by Sign People NOW AVAILABLE on CD and the proceeds go to Letterville's favorite charity! Click Here for Sound Clips! Posts: 1974 | From: Orleans, MA, Cape Cod, USA | Registered: Nov 1998
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Although a one man operation these days, I was an assistant shop foreman for a pretty good sized t-shirt printing company and often dealt with salesmen on the design/production aspects of the work.
One of the best steps we took was redesigning our work orders, making them effective for the everyone involved. They included areas where a salesperson could write in special instructions or draw a quick sketch with production notes/specifications. They also gave production people advance notice on special projects, job prices were figured out quickly, and helped avoid rushing into unforseen problems.
Many of the salespeople also spent some time in the art, camera and production departments, and it always helped the company avoid costly mistakes later because of miscommunications.
Just a few thoughts... Rapid
-------------------- Ray Rheaume Rapidfire Design 543 Brushwood Road North Haverhill, NH 03774 rapidfiredesign@hotmail.com 603-787-6803
I like my paint shaken, not stirred. Posts: 5648 | From: North Haverhill, New Hampshire | Registered: Apr 2003
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posted
"...I am thinking of a straight commission of 10% over $1,000; & 15% under $1,000 per sale..."
So, the bigger the sale, the LESS you want to pay?? You are inviting trouble with abrupt commission cut-offs. Example: My wife had a job for a while as an illustrator for an internet clip-art website. She was paid $7 a drawing for the first 300 drawings in a month, and $5 a drawing for any extra over the first 300. I assure you she ONLY sent in 300 drawings a month, and any extra she did would be saved, to send in NEXT month for full price. (it was a sweet deal, she is blazingly fast, could do whatever she wanted, did all work on a wacom tablet, and only worked a few hours a day to hit her qouta. Alas, they went thru financial difficulties and perished)
If a salesperson is nearing your (very arbitrary) commission cut-off, there is a very real incentive to split the order into two or more smaller jobs. Keep it a flat rate. Tie your commission or bonuses to the profit made on the jobs so the salesperson is rewarded for NOT giving things away to make a sale. Car salespeople are usually paid 25% of the gross profit, so they have a huge incentive to keep the deal profitable. Otherwise, who cares if the boss makes money- I still get MY commission. (I worked at car dealerships before becoming a painter)
One company I worked at had a stupid rule that salespeople had to make 5 sales a day. So the guy who has one $10K sale yesterday is a "bad"salesperson, but the guy who has 6 $100 sales is "good" in management's eyes...
quote: 10% over $1,000; & 15% under $1,000 per sale
Hypothetically....Why would I sell a sign for $1,000 when I can sell it for $900 and earn a bigger commission? How about something like a straight 10% commission with a x% monthly bonus if total sales exceeds $xx,xxx.00?
-------------------- Brian Snyder Sign Effectz Woodbridge, New Jersey Posts: 723 | From: Woodbridge, NJ USA | Registered: Nov 1998
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