Commission

[Adam's Lawn and Garden]

Hey,

I was reading an article called mass production on a Dallas, TX company. He paid his employees by commission. It sounds like an interesting theory. I was wondering if anyone out there did this, and how it works?

Thanks,

Adam

[Team-Green L&L]

Hey,

I was reading an article called mass production on a Dallas, TX company. He paid his employees by commission. It sounds like an interesting theory. I was wondering if anyone out there did this, and how it works?

Thanks,

Adam

Commissions are paid (usually to a sales rep) for each sale made. Good sales reps will make a base salary plus a commission that equals a percentage of monthly gross sales, on each sale, or however the company structures their commissions. We pay out what is called a commission/draw method which means that our sales rep makes $X or 8% commission of gross sales (whichever is greater). Now, keep in mind that his average monthly gross is $23,000 in direct sales. Unless you are capable of doing $300,000 in sales a year and needs someone to sell that much the commission system is probably not for you.

[Adam's Lawn and Garden]

Well, first, this idea came from an article. I was not sure if the worker gets a hourly rate, plus a commission for extra work, or how it is set-up. This is for our updated business plan.

Thanks, more comments would be great!

Adam

[dmetro]

I am new to the Forum. I purchase a company and the salesman / designer is paid as follows. Base Salary of $600.00 plus 14 % of the gross profit on the project. Example: 3000.00 job at 50% profit equals $1,500.00. The commission for this job would be $210.00 in addition to the base salary. Do you have any suggestions. I think the salesman is comfortable. We have the ability to do 300K and we receive a lot of referrals and quality leads. My challenge is the work is not being sold and a lot of the projects need a design. I can handle the smaller projects.