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Sales Compensation...

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  • Sales Compensation...

    Much to my surprise, I didn't find much advice on hiring a sales person when I searched the forums. I am interested in what we should offer in compensation, and how much should be commission vs salary.

    We are a small family shop that has been around over 100 years, in a small city. Our two competitors have sales teams and are thriving, we have none and merely get by. Back in the 80s and 90s we had a couple of salesmen that left bad tastes in our mouths. I feel this was partly because of the people that were hired, partly because of the lack of oversight, and partly because they were paid a salary that they could live on comfortably without making sales.

    Now that I am taking over the operations of the business, I feel that there is a great deal of work to be had, if only we had someone out selling. I am not a salesman at all, but I love printing, and have been able to pick up a couple of $100K+/year clients, just by forcing myself to go out and sell, even though I am much, much more comfortable overseeing production.

    All that being said, I have no clue what the industry standard is for compensation. My thought was to pay them a minimal wage, enough to get by on, but not enough to be comfortable, then give them a percentage of each sale to a new client, or for new work picked up from clients that just give us a little bit of their work. Then I figure they would get a smaller percentage of repeat orders they originally picked up which would continue as long as they worked for us.

    I also feel that we would need some type of non-compete clause so that they didn't leave and poach our clients. Something along the lines of no printing sales within 100 miles for 10 years.

    I would love to hear your thoughts and recommendation on this.

  • #2
    No Compete is a must
    Compensation is best realized as a percentage of profit. Problem is that most printers have no idea of cost to produce. If You have that part under control then a percentage based on profitability gets easier.
    But beware that you will also need to protect yourself and your shop. sales-reps paid on profit learn quick to shop even against their own companies workforce so set guild-lines up front dealing with the farming out of orders.

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    • #3
      No Compete is a must
      Compensation is best realized as a percentage of profit. Problem is that most printers have no idea of cost to produce. If You have that part under control then a percentage based on profitability gets easier.
      But beware that you will also need to protect yourself and your shop. sales-reps paid on profit learn quick to shop even against their own companies workforce so set guild-lines up front dealing with the farming out of orders.

      Comment


      • #4
        We do a draw against commission . . the draw will keep him alive eating beans and rice . . . (keeps him hungry) . . and on close jobs we sit down with out sales rep and work out a different commission for that particular job - we will discount it some but so will he so that we can get the bid in under the wire . .. but a little of something is better than all of nothing . . .

        BTW . . . I would love to pay my sales guys 100K a year or more. . just like I would love to pay the IRS a couple of million a year . . think of all the money you would be making . . .
        "If you think you are too small to be effective
        you have never been in the dark with a mosquito."

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