Sales person

Discussion in 'Business Operations' started by sancho_man_orlando, Apr 21, 2008.

  1. sancho_man_orlando

    sancho_man_orlando LawnSite Member
    Posts: 216

    Was wondering if anyone has had success by bringing on a "100% commission" sales person aboard.

    General duties would be for them to seek out residential or commercial work.

    Maybe pay 5 - 10% of contract amount?

    Anyone tried this before?
     
  2. big acres

    big acres LawnSite Member
    Posts: 182

    From a sales person's view, you will have a hard time attracting someone with a 100% commission only pay structure for two reasons.

    1. We need to eat while we build up a clientele, which takes time.

    2. Experienced sales people know that 100% commission is risk free for YOU, but not us. It shows no sincere committment to our mutual success.

    I would bet that two types of people would answer your ad for 100%commission only.

    1. The inexperienced novice looking for a way to break into the sales world. This type will likely starve before they hit their stride and become self sufficient. You may not be investing much money, but you will invest alot of time training them in your methods and pricing. When they fail, you lose too, and you start from scratch.

    2. The professional. This person may come from the industry and bring some contacts, but they surely have something else going on in order to feed their family. Commission only is very typical of manufacturer's reps. They may sell 10product lines for 10 different companies. The line that proves to generate the mostvolume or profit for them gets the most attention, so you may not be a high priority. This person knows that at any time you may decide that you've met your goals as far as growth and they are no longer needed. If they feel they've been burned, this person may leave with your contacts too.

    Obviously, you want to see some results before you pay. I would suggest a "tic-down" approach wher you pay a good base salary to start with predetermined incremental reductions in their base salary every quarter for example. This gives them time to build a clientele, and shows that you are investing in their success. You will attract a wider field of applicants with experience that you can afford.

    Your 5-10% commission rate is realistic, if your market supports it. Be upfront and put the whole agreement in writing so there are no hard feelings if they cannot perform for you. When choosing your commission rate and base salary consider what "non-sales" activities this person will do. Will they do qaulity checks, management, administrative work, orspend time creating marketing materials for you; or will this be provided and they simply bring in customers for you as fast as they can and turn everything over once the contract is signed. If there is considerable non-sales work, then your base salary should have a "floor" which covers this work. If it is pure sales, maybe the base dissappears altogether.

    You may find different types who are willing to take on more risk, or less. The thoroughbreds will seek higher and unlimited commissions and be willing to transfer to 100% commissions, while you may find very good people with alot to contribute who will perform well with a modest base and modest commissions.

    "You have unlimited commissions, if your making money, then so am I" -If I had a dollar for every time I've heard that. Whatever you do, don't play the shell game by changing the pay structure every time your salesperson starts to see some real money.

    Good luck.
     
  3. Superior L & L

    Superior L & L LawnSite Senior Member
    Posts: 567

    Yer thats real tuff. Peopel have to eat!!
    What can work is a drawn against commisons, that way you show you are willing to make an investment in the rep. If after 60 days they they are not moving some sales it may be time to move on to the next rep.
    7 % of all sales with a $600 draw per week would work great on a full time sales rep. Some bigger companys around here do $1000.0 per week and say $52,000 a year to start Guarantee!! but if your not covering your draw real quick they get rid of u
     
  4. TLClandscaping

    TLClandscaping LawnSite Member
    Posts: 59

    450.00 a week & 3 % on each job they land:walking: door-to-door reps, it works
     
  5. Coumbe

    Coumbe LawnSite Senior Member
    Posts: 270

    You paid $450 a week?
     
  6. TLClandscaping

    TLClandscaping LawnSite Member
    Posts: 59

    No, When I worked for Trugreen When I First started in sales thats how I was paid.
     
  7. steve5966

    steve5966 LawnSite Member
    Posts: 210

    If your going to hire a sales person on commision, can you handle the increased work load? If there is a limit on how much they can sell, you won't be able to get by on commision only. We are not in the manufacturing business where you can just add another shift of workers o the same equipment. To add a mow crew may cost up to 60,000 dollars, a landscape crew maybe less. Either way, if you want to sell more be sure you have the ability to do more.
     
  8. SilkKnitter

    SilkKnitter LawnSite Member
    from Zone 5
    Posts: 57

    100% Commission OK fine. but, Try to offer other benefits.
    If that is the route you are going to go, try to find somebody that is possibly retired or a student (high school or college)
     
  9. EgansCountryGardens

    EgansCountryGardens LawnSite Member
    Posts: 163

    Just hired a salesperson 100% commision. Paid 30% of the profit from every job landed. Profit being what the company makes after paying all overhead labor, materials, secretary salary as well as mine is figured into overhead. So, on a $10,000 job based on my company working on a 27% profit margin. He will receive 30% of the profit margin so he will receive $810.00 for that job. He will be paid when we get paid by customer. It would be to his advantage to follow up on the job, and manage the crew while they are working, because the more efficient the job is run, the more profit we will make, and the more he will make.

    I'm trying this for now. Does anybody see any disadvantages to this?
     
  10. fool32696

    fool32696 LawnSite Senior Member
    Posts: 992

    Looks like a pretty good plan. Even if this person brings you a $10k job in his first week on I can see them asking for some money before you see a dime of yours. Say he signs the job, it takes your crew a week to work it into the schedule, the job takes 10 days to complete, and it's another week before that final payment shows up at your office. I can't see someone going almost a full month without their first paycheck. Also, what are the chances that this guy can sell an average of $5000 per week? Any less than that and this person can't afford food, rent, and transportation. On the other hand, what if you hired the genius sales guy and he sells $20k a week? Do you have the people and systems in place to handle that kind of volume? I have the feeling that if you can't handle the work that this person brings in they will become discouraged and leave.
     

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