Hiring a sales rep on a commission only basis

Swampy

Hi all,

I'm hoping to employ some sales reps initially on a commission only basis at the moment as it is all we can afford.

Would any of you have any experience in hiring or of being one? could you give me any tips/guidelines in order for it to be a fair employment system?

thanks,

s.

Blindside87

We are thinking the same in our business...is there any rules with regards commission/basic salary? I have worked on a commission only basis was but was badly treated, didn't have a basic and was basically treated as a self employed person without any of the perks!

ghosttown

Commission only reps are best self employed, they are effectively self employed anyway in my eyes.

If he's on your books, and makes sales, you have the whole PRSI / tax / deductions thing.

It is best if you have an agreement on a % of sales or profit, and be clear on payment terms - do they get paid on orders / shipments / payments (best on payments, although they have to know clearly what terms you give).
Do you allow them any retainer for expenses / petrol / lunch etc ?

I set up as a self employed 'rep' for overseas companies last year, I now rep for 4 non-competing companies, they all know of the others. I operate 4 email addresses, 4 business cards etc.
I invoice each once a month on cash receipts they have on orders i've received - so payment is normally 3/4 months after order, allowing for leadtimes etc.
2 pay me a additional retainer, 1 on submitted and pre-agreed expenses, and 1 purely a % of profit.

Be honest, and draw up a clear understanding of the 'rules'. It has to be a win/win situation, and remember, you need to treat them as an equal, not an employee if you are not paying a basic.
Good luck

MidlandsM

The problem in sourcing good sales people to represent your company/products is that some good sales people will not work without a basic, because they don't have to.

lion_bar

Remember too that a self employeed sales person is the cultivating and growing your client list so they are his contacts and they could easily jump ship.

bungler

Ill second the two posts above.

No disrespect to commission only reps but the problems are.
1. Good sales people will only work basic + commission.
2. They are usually a broker therefore they are selling products from other companies too.
3. Because they are commission only they can work what ever hours they want so if they have a good monday and make some money they can sit at home for the rest of the week which means your company is not been promoted for the other 4 days i know 2 friends that do this.
4. They are recording all your details and your customers and can easiy pass it to other reps and when they leave they have all your data so if they go to a competitor they will take the business. I know anyone can do this but if they work directly for you there is privacy laws to but a barrier up from doing this.

I know its more costly but hire a good sales person directly pay them a basic plus commission and they will work 8 - 6 selling for you.

Hope you get sorted,pm me if you need anything im in sales

bungler

bungler wrote: »

Ill second the two posts above.

No disrespect to commission only reps but the problems are.
1. Good sales people will only work basic + commission.
2. They are usually a broker therefore they are selling products from other companies too.
3. Because they are commission only they can work what ever hours they want so if they have a good monday and make some money they can sit at home for the rest of the week which means your company is not been promoted for the other 4 days i know 2 friends that do this.
4. They are recording all your details and your customers and can easiy pass it to other reps and when they leave they have all your data so if they go to a competitor they will take the business. I know anyone can do this but if they work directly for you there is privacy laws to but a barrier up from doing this.

I know its more costly but hire a good sales person directly pay them a basic plus commission and they will work 8 - 6 selling for you.

Hope you get sorted,pm me if you need anything im in sales

Couldn't disagree with you more. I could write ten pages why. The biggest reason is you have ruled out everyone who has not done sales before. If you have no sales experience, its not to say you are not naturally gifted at sales. But if you have no sales experience who is going to pay you a basic plus commission? especially now?
You have to start somewhere in sales and commission only is the start.
I know lots of people who started in door to door sales ( myself included) who owns companies that now turnover millions of euro.

Any sales guy worth his salt is not going to sit at home for 4 days after making a sale. Not if they have any sort of ambition or drive. Your also assuming when you say this that you hire guys and don't manage them. Madness man, sure how can you run a sales company and not hold sales meetings? or talk to your guys every day?

Lucky Dub

Would you have to cover any expenses, such as phone calls, mileage etc.?
Are they best hired as self employed sales agents?