Outside Sales Compensation

bjprntg

Member
We are small shop considering hiring an outside sales person. What is the industry standard (if there is any) for compensation.

Salary?
Commission? Percentage of sales?
Combination of both????

What has work for you?

Any insight would be helpful.
 
From my point of view a salary is scary unless he comes with a book of proven sales. We use a base amount or draw against commissions, for example the sales man gets $1000.00 the first of the month drawn against "future" commissions. If he sells $20,000 that month he would get another $1,000 that month. Our base commission is 10% and variable commission where to get a job that you are say 5% high the sales man would forgo 2.5% and the company would drop 2.5% in order to get the job. Also we pay commissions when the job is paid for - it makes the salesman more likely to have responsible and prompt paying customers.

just be careful I once had a salesman based on this plan. He sold $1,500 worth of printing over two months and we parted ways . .. he took us to the employment commission and the comission ruled that we had to pay him the $2000 draw - even though he had not generated that much in gross sales.
 
do your research and get someone who likes sales, your company, and the product. If they have a book of business then why are they leaving and why do they want to join your company. There is nothing wrong with a salary as long as the rest of the items (calls and business expectations) are defined up front. If you have a fair salary you may get what you want. This is a strange world. You could have an operations person who doesn't help or grow and they will get a salary. Yet, when your considering sales then it's about what they can produce and "are they getting over". The idea that most sales people are driven by commission is not correct. Most are driven by the win, building relationships, or a drive to grow something.
 
I myself am looking at an outside sales person. At the end of the day it would be nice to base a percentage off of added value. I agree it is not always about the money but there needs to be a certain amount of "greed" in a good salesperson. I think every company structures it differently but at the end of the day if you have a good performer on board and they are not compensated properly they won't stick around very long. It is by far the hardest job in the Industry. In any Industry!!
 

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