In house print salesman

[pq man]

Hi guy's can anyone give some insight as to what they do with their in house sales people as far as salary or commission or both? We have a family commercial print company but are always at a disagreement as to how to pay a sales person. So for many years we have always dealt with brokers and just word of mouth and have been fairly successful, but in my opinion I think we need someone out their knocking on doors and making calls so we can be more direct with a customer and maybe not have multiple mark ups on a job and we lose the work because of that. Any thought would be much appreciated .

Thanks

 

[Stephen Marsh]

Many of our Accura MIS customers use the “Value Added Percentage” or the “Contribution Value” to help decide on how they pay the commission. They run a report for a given period of time, filtered by the sales rep. There is a good reason for this, see below.

VA$ = Selling price – Material costs – Outwork costs (– minus)
VA% = VA$ / Selling price * 100 ( / divide, * multiply)

Example: You are asked to produce 2 jobs - both worth $1000 sales, the costs of that job are made up as follows:

Job 1: Materials $300, Outwork $400, Labour $200
Job 2: Materials $300, Outwork $0, Labour $200

If we look purely at turnover, both of these jobs are worth $1000 sales revenue (the sales rep is happy, why should he care). However Job 2 has far more retained profit (Value-added) than Job 1.

This is how it looks:
Job 1: $1000 - $300 - $400 = $300 value-added (30% VA)
Job 2: $1000 - $300 - $0 = $700 value-added (70% VA)

Given the choice, we take Job 2 in preference to Job 1, as there is more retained profit to pay our overheads. Accura shows the projected Value-added in every estimate you do before you agree to take the job on.

Contribution is value-added broken down one stage further – by deducting production wages from the VA total. In other words, how much retained profit is there in the job after we have paid the wages.


Hope this helps,


Stephen Marsh