Hiring an Independent Sales rep

[Dragon Rider]

My partner and I are in discussions about hiring an independent sales rep to market for us. We have grown to where we need an additional hand. He oversees the sales side of the business and I oversee the production. My question is based on pay. What would be a fair percent to pay, do you pay top line or bottm line, and if they stay succeding years would you pay them next year on this years sales, that is 2013 sales pay a percent in 2014. what do you think about a retention bonus, and would you give him or her exclusives rights to market in an area?

[action1]

I would recommend paying a percentage of the profit . Percentage depends on many factors. Earmings for the type of work and the part of country etc. That way if you don't make money, they don't make money. The sales rep will also want to keep profitability as high as possible . You may want to hire them (not independent ). It you want them to stay keep paying them on the c ustomers they have sold and keep. Give them all the market that you want to work.
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[PaperCutter]

And how is a sales rep (especially an independent one) going to keep profitability high? I can't imagine any pro salesperson who's been around the block in this industry would work on a percentage of profit if they're not also in control of production.

As far as I'm concerned, if I'm selling for you we can establish minimum pricing, and if I miss something and make a mistake - backcharge me. But if I did everything right and your crews can't get it together, or it snows in September, or you order the wrong materials? Not my problem. Pay me. I sold a $70k retaining wall job several years ago, and the company had so many staffing problems and other goofiness that it took them six months to finish the job. It was bad enough smoothing the customer over throughout it, I can't imagine if at the end I was told "hey, it wasn't profitable for us, your commission is now zero."

[Dragon Rider]

All good points. What type of percent would you pay in 2014 for 2013 sales that are still on the books. We have talked about a retention bonus for the Independent reps.

[mspglac]

small fixed rate and 7-10 percent of sales and some incentives