One of my readers, a commission salesperson, sent me a question the other day that I have been asked several times:
What percentage is the industry standard when it comes to negotiating sales commissions?
I will share with you my response to him, and I hope that it will serve as a guide to negotiate compensation.
Your sales commission is a truly negotiable item and just as there are
there are no “standard” contracts, although all stationery stores
sells documents that have that header, there is no
hard and fast rules regarding direct commission compensation.
I have seen a lot of 20%, but this will vary depending on
We have many factors:
How well known is the product?
What is the profit margin?
How long does it take to make a sale?
How difficult is it to sell this item?
Here is a commission plan that really worked for me as a seller, and you may want to trade the same type of scheme.
During grad school I sold pens, two grosses over the phone.
I “bought” management’s thoughts on something like
16 cents and sold them for 33 cents. This was a “maintenance”
the entire commission plan, so you could choose to sell
think at any price you wanted. My upward limitation was
the 49-cent engraving at the top of each pen
barrel.
I made a lot of money this way, and the house got its
price, too. It was a win-win commission deal.
But with any plan you have to be careful, especially if you are selling for someone else. Make sure
SOMEONE ON THE STAFF IS NOW MAKING A LOT OF MONEY AND ASKING THAT
person to trust you, telling you: (1)
country management on time, and (2) management does not have
history of cuts in the commission structure.
Also, make sure that the administration does not save more
10% “reserve” against chargebacks, if
calculate them at all. In addition, it must be explicitly agreed that the funds that accumulate in a
chargeback reserve are yours, released to you in a
defined point in time, that is, 60 days after the sale or
upon receipt of customer payment.
I hope this helps.
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