I’m giving them two weeks to make the payment. (1) ask the company for names of other reps they have used, with the idea of seeing if you can gain any tips for working their line; (2) look for trade groups; sometimes there are well-established groups; (3) join a rep association and network with reps who are members with the goal of eventually getting in contact with reps in your industry. Again, depending upon your agreement, you may have specified that the commission or a portion thereof on defaulted contracts is refundable from the rep back to you, and could be deducted against future commission payments. If so, then the rep gets paid for all sales in that territory. So you should consider the business from the reps point of view. There is one really good reason for up-front fees, which in spite of what I just said is a good idea. All phone sales. Thank You! It is not clear if you as a travel agent are receiving a commission, which you would then have to split. If you cannot get reasonable numbers to come out, then you probably cannot make it worthwhile for yourself. A commission-only compensation plan is the best way to pay sales reps. I own a recurring-service based business and have never used a sales rep before. Hi and thanks in advance or your advice and input. I am a fashion designer that works closely with various buyers to develop/ design lines. Not only are commissions difficult to navigate, they take up quite a bit of extra time versus a spec piece. The set up fee is refunded on the first sale but the ongoing fees continue. How should I pay them for this as well. So my comments would probably not be relevant except in generalities. We cannot give you specific advice on the mix between salary and commission, as that is up to the arrangement that you make. What are you bringing to their table? Otherwise, this would be more of a distributor role rather than a rep role. If not, then you have to go by the terms of the contract. My suggestion is to speak with reps and ask them what it would take to get their interest under such an arrangement. On her base rate, Judy would have been entitled to $1,856 (80 hours at $16 and 24 hours at $24). My impression of the the situation is that the commission arrangements are really up to the relationship that the company and the reps, and that you are not directly involved. I am considering working for a clothing designer who also own a manufacturing company overseas. So with a little math, you would take the price and divide it by 1 – .20 = .80. Having said all the above, my opinion is that your concept is not a bad plan. But it seems to me to be double-dipping in the following way: it seems that there is a commission on the sale, and also a share in the profits for setting up the deal with the wholesaler which usually go to the owners. How can I propose a solution for this?. Commission is usually based on invoice price. reps ? It always comes down to doing what is best for both parties. It does sound like a low rate for retail, if that is what it is. I closed a deal a month in and asked for the report. Is the contribution you are making to the company adequately compensated. However, you can enter into a Non-Compete Agreement with them, that stipulates that in exchange for sharing confidential information about your business and other details about how you will enter into a cooperative arrangement, they will not create a competing business. You might also give that a try. How do I become the sole person to represent them and possibly set it up where I am the one to help them continue to expand into other cities/markets. And in your case, it depends upon how much work is done by the lead generator. Let me know if you need more info. I would leave my current positions (self-employed) to give this a try. Commission structures must reflect the reality of the relationship between the creator of the product and the marketer or seller. Hello Everyone. In the agreement proposal they sent me, they included a clause that says that even when I will have some clients assigned, they can contact the clients directly, make a sale and I won’t be receiving commission over that sale. You do have one, don’t you? My question is how much commission I should ask for. We need an account executive to do that as that skill is not in our wheelhouse. The company then presented this “commission structure: form. They might reach out and say, "I've never done this before, and have no idea where to begin.". TO correct, the units cost $60,000+ can be up to $500,000 on a large project. You have not mentioned how much of your time would be dedicated to this company. We are looking to bring on a few rep’s to help grow our brand… this rep process is new to us. So one way that might help you come to a conclusion would be to consider what it would cost in commission if you hired an outside sales rep to in effect outsource the particular function. Hi. Whereas 15% might be fine in retail, it would be completely inapplicable if your were selling “nuclear reactor facilities”. As a principal you’re going to give away money for free once, probably twice, then if you’re on top of your rep agents, you know who’s working and who’s collecting money. The average cost of my main item is between $700-900. Being concerned for the rep, while at the same time questioning the situation does show that you are trying to follow the upper path. We are a start up company selling a patented product that covers a wide range of markets including gift shops,pet shops,coffee shops and florist. The bottom line is that the rep needs to earn the expected income from his work, no matter how computed. Could you please elaborate on your service? I work with 2 companies currently: One is a skin care line which Ive been with for 2 years, previously on salary but now am independent with. While their are many variations on practices, the standard arrangement is to pay commission based on invoice price. I am having difficulty collecting my commission for sales I made for the last 30 days . Last week my boss buckled and gave me a piece of paper that was called a Commission Structure. I work as a sales rep for an entertainment company and he pays me on the net of what I bring in. MSRP is$100. You should get some response there. Now the original guy that I was carrying the line for is suin my company for the order stating “it was his” and I “took it” from him. Do I need to provide them business cards? So you have to weigh your channel development costs against the higher commission, assuming that in fact the commission will be at the higher end of the range. Any rep would bolt and not take such behavior as it would amount to theft of the reps services. So the supplier receives POs from the sales rep who can keep in this way a perfect track of all sales made through him. For example, if 10% commission was normal in your industry, perhaps 5% would work for the “perpetual commission”. These are just some thoughts about things to take into account; I am not trying to tell you how to negotiate. I am just starting out. We are considering employing commission based cosmetic/skincare sales reps in various states but need detailed information about how to do this. The company will close deals. Create a free profile. Keep in mind that we are talking about a small company in Europe, burden by the current crisis, but with potential to grow and for our cooperation to be long lasting. Here is some thoughts for you on residual income. Then you need to have $500 commission on each one. This is what they offered me but not sure it is fair. I am very glad to pay generous commissions to those who earn them. Our general rule of thumb is 10 – 15% of invoice. “It is always best to derive the commission amount from the “gross” of the sale. So my average commission rate ends up being only 8.9% of the total sale amount. I am starting a business relationship with a private sales rep. We are almost finishing a contract thanks to his contacts, but I do not know the correct commission for him. You should check with reps in your area to see what is traditional in your marketplace. For example, if you are closer to the end of the supply chain, where you are selling to commercial businesses for their own use, the rates may be closer to 5 – 10%. Could you please describe your industry in more detail? We are manufacturing a high end stand up paddleboard which will have a dealer cost of $1400. For example, if billings were $5 million, then 3% is $150,000 which would be an excellent compensation level. You did not mention how much of your time was dedicated to this line. – how many other lines to the reps have? Great thread. I have heard of this being done in the field but wanted to see what your thoughts are since I am fairly new at this. Commission splits are another important consideration. I have read 5-20% is the standard commission rate to pay the contractor. Therefore I am responding with generalities. However, since we deal with every market available, it is best if you communicate with others in your specialty to understand what the acceptable commission is in the market that you are going into, so that you are not only fair to the rep or rep agency, but also to yourself.

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