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Sales Rep

Discussion in 'Business Operations' started by LAWNGODFATHER, Dec 30, 2001.

  1. What would be a good percentage of pay for a full time sales rep?

    Job would only require sales, no running of LCO.

    2% was my thought, but when discussing similar on a different thread, it kind of changed my mind on the percentage.

    Also paying th rep, what would be a good way?

    After closing sale.

    Percentage of monthly billing for first year of contract.


    Any input would help dramiticly.
  2. John Allin

    John Allin LawnSite Bronze Member
    Messages: 1,488

    Our sales people get paid their percentage when we get paid....

    Exception... commercial installs that have retention involved... then we pay them thier commission as we get paid, and the commission on the retention when we get that.

    They get it in the first paycheck of the month following when we get paid.
  3. KellyD

    KellyD LawnSite Member
    Messages: 8


    I've been in sales for years, and am thinking of starting a new LCO this spring. (That's only pertinent as an intro). I really enjoy this site, and am glad I found it. I've read lots of your threads while doing searches, so maybe I can help out in some way this time.

    Most sales commissions can be broken down 2 ways...Percent of ticket (gross) or percent of profit. Percent of profit typically runs 25-35%. An example of this would be selling cars. (35% of amount paid over dealer invoice minus a small "holdback" of say $250 for advertising). Yep, car sales is much harder than most realize! $100 minimums are the norm most times.

    Percent of ticket can be typically 1-10% depending on if it's straight commission, or salary plus commission. I sold to commercial accounts for a large computer retailer, and I made $10 an hour plus 1% of total sold for the month. 40 hr week, and 25K in sales =650 a week. Examples of this are furniture sales, commercial account reps, etc. I sold roofs after major hail storm for a local large roofing contractor. No salary, got a 1099 as sub (seasonal) and was able to write off miles, etc. I made $100 when I turned in a contract, and 10% of ticket when final payment was received by company. Great way to intice sales reps not to leave, when your holding commissions for 6-8 weeks!

    Figure out what you want your avg. sales rep to make, and base your pay plan accordingly. Lower than avg. and they'll leave. (most straight commissions have 10% or higher turnover monthly) Higher than avg. and they make a good living.

    Now, based on my experience watching others get fired when selling roofs, you must make sure your sales reps aren't using your leads generated by telemarketers and selling "their" own company! It happens, and some try to sue for "theft of services", but was a major problem. "Oh, don't like what my boss charges, well, I moonlight a little, and I can do it for xxx." Find a way to curtail that activity!
  4. John: so they get paid after you get paid on all jobs?

    Kelly: so would 2% or 3% of the profits + an hourly wage sound good. I perferr to use it that way to keep the reps numbers up vrs. selling lower bids, and pay them on their % as the payments are recieved from the customers.

    And oh yes!!!! a non-compete contract will be used.
  5. KellyD

    KellyD LawnSite Member
    Messages: 8

  6. KellyD

    KellyD LawnSite Member
    Messages: 8


    Sorry about above..I hit return too many times, and it posted...

    I consider that the best route by far for both of you.

    I wouldn't just pay for the first year's income, as then they have no incentive to retain clients. Maybe $8 an hr. Plus 2% of gross sales. The percentages get paid as the payments come in. Each invoice would have a sales rep ID (their initials) and payroll would be able to track commissions. Also, they would be the point of contact for clients who are unhappy or have problems that need to be dealt with. This is if they are an employee.

    If you want them to use their own vehicle, then they have lots of tax write-offs. You could pay straight commission for this, with no hourly, but still pay for customer retention.

    I hope this helps you out!
  7. John Allin

    John Allin LawnSite Bronze Member
    Messages: 1,488


    Yes. Although, they do get a salary too.
  8. MowMoney

    MowMoney LawnSite Member
    Messages: 55


    We have spoke about this once or twice and you have been very helpful in your guidence. I agree with Kelly and Allin with respect to when the rep gets paid. I have given this some thought and have decided that the person I hire will also be responsible for servicing existing accounts. I figure on paying a salery over commision. The salery will compensate for existing accounts and will be paid by-weekly while the commision will be on new sale and paid when it is received from customer. The Question I have, just like you LGF, is what is the going rate for a sales rep? Not necessarly the %of X. I know that different markets have different pay but a ballpark would be nice. It is difficult to figure out on x percent of gross sales/profit becouse this too will very from company to company. Heck i would venture to say that some companies even have a negative net profit on some services they provide! some companies are larger than others making it easier to absorbe the cost of a new hire. But for a company that is just about to hire his first key personel, some of that expense will have to be eaten the first year or two until enough sales have been generated to keep that rep busy.

  9. MowMoney

    MowMoney LawnSite Member
    Messages: 55

    Almost forgot, thanks Kelly for your insite. Its nice to get information from someone who is standing on the other side of the fence.

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