[webproducers] Re: sales commissions

We're doing mostly web sites and redesigns, and a few print jobs here and
there, and there's no base, just a percentage, but were thinking that adding
a bid of producing work might help round out the paychecks as more projects
come in.  He sure keeps us busy, though, with promos and bid reviews, etc.

Thanks for the feedback, folks.

--Stuart Hunt


On 5/29/03 10:33 AM, "Katherine Gray" <kat@xxxxxxxxxxxxxxxxxxxx> wrote:

> Is this assuming there's a base? If yes, what would you expect that to be?
> -Katherine
> 
> 
> ----- Original Message -----
> From: Stuart Hunt
> To: webproducers@xxxxxxxxxxxxx
> Sent: Wednesday, May 28, 2003 8:01 AM
> Subject: [webproducers] Re: sales commissions
> 
> 
> I've been thinking about this a bit more, and it's becoming apparent that
> the 10% might not be enough to keep them interested for smaller projects,
> and they'd need to get us more projects than we're geared up for in order to
> make a decent income -- so I was thinking of making it 20% and adding a few
> client relationship and interface tasks too.  Not quite sure yet.  Thanks
> for the feedback so far.
> 
> --Stuart
> 
> On 5/23/03 3:00 PM, "Katherine Gray" <kat@xxxxxxxxxxxxxxxxxxxx> wrote:
> 
>> This is exactly why I'm bringing this up. I could never offer 20% again (that
>> was without any base at all, on the original budget which ended up growing by
>> the end, and it was a one-time deal), but if my true profit is really only
>> about 20% even 10% commission is a little scary. We just raised our rates a
>> little to cover new overhead (bigger space, a few more employees and
>> well-deserved raises), but it wasn't as much as it needed to be, only what I
>> figure the market here could bear.
>> 
>> The other thing I'm trying to balance is capacity. If we get a good sales
>> person who gets a modest base and a healthy commission, which is what I'm
>> leaning towards, how do I keep the schedule from getting overloaded but still
>> keep that person happy enough to keep selling? I know there are no easy
>> answers to these questions, but I'm interested to know what other people's
>> thoughts are.
>> 
>> -Katherine
>> ----- Original Message -----
>> From: C L 
>> To: webproducers@xxxxxxxxxxxxx
>> Sent: Friday, May 23, 2003 10:56 AM
>> Subject: [webproducers] Re: sales commissions
>> 
>> 
>> 
>> I was perusing through this topic and thought that the percentages seem to
>> be extraordinarily high.  I haven't done much of this referral sales
>> percentage stuff, but who exactly is paying for these 20-30% commissions?
>> The client or are you as the proprietor eating the cost?  I remember the
>> norm during boom times were 10-15% or cost, which were handsome indeed for
>> six to seven figure projects.  Are these 20-30% commissions also for six to
>> seven figure projects (are there any more seven figure projects?) or for
>> projects that cost a few thousand?  With these kinds of commissions, what
>> are the markups?  If you markup 30% and pay 30% commission, and the project
>> comes in EXACTLY as planned, then how are you/we supposed to pay rent and
>> bills?  And if we markup 50% to make a 20% profit, isn't that an overly
>> bloated budget that's likely to scare the client away (not to mention we'll
>> easily get outbid)?
>> 
>> In the past, for the few times that I actually paid out to sales guys, the
>> commission was 8-12%.  My normal markups were 20-25%.  These days, I haven't
>> dealt with sales guys since I have no money to hire them, and I barely make
>> any markups at all (whatever I profit is actual work I do on the project,
>> minus any preliminary meetings, etc.).  Am I just beating myself to a pulp
>> or is this the kind of norm that we're going through in this market?
>> 
>> My two cents and curiousities.  I'd appreciate any comments...
>> 
>> .chang
>> 
>> 
>>> From: "Katherine Gray" <kat@xxxxxxxxxxxxxxxxxxxx>
>>> Reply-To: webproducers@xxxxxxxxxxxxx
>>> To: <webproducers@xxxxxxxxxxxxx>
>>> Subject: [webproducers] Re: sales commissions
>>> Date: Fri, 23 May 2003 09:17:31 -0700
>>> 
>>> On this subject, throwing this out to the group: what is the markup on
>>> services in your area? We markup 30% and are happy if we come out at 20%
>>> profit. Currently we don't offer sales commissions (I'm the main sales
>>> person but I'm also the CEO) but in the past I've offered 20% on the
>>> original budget, which was too much considering our margins. I'm going to
>>> hire an AE in the next few months and need to work out the base
>>> pay/commission structure.
>>> 
>>> 
>>> 
>>> 
>>> 
>>> 
>>> ----- Original Message -----
>>>   From: Laura Allen
>>>   To: webproducers@xxxxxxxxxxxxx
>>>   Sent: Friday, May 23, 2003 8:54 AM
>>>   Subject: [webproducers] Re: sales commissions
>>> 
>>> 
>>> 
>>>   Because it's such a rough market, I offer people between 25-30% for
>>>   referrals on business.  I don't know what your business is or what your
>>>   mark-up is, but this seems extremely reasonable to me. Just to be clear,
>>> he
>>>   would be getting 5% to manage the agents correct?  That means the new
>>> agents
>>>   would get 10% for closing the deal and he would get 5% for managing
>>> them.
>>>   You probably can't afford to pay them 10% for sales and him 15% for
>>> managing
>>>   them, so I just wanted to throw that out there.  Also, you need to make
>>> it
>>>   clear who is running these new accounts after they are closed.
>>> 
>>> 
>>>   ----- Original Message -----
>>>   From: "Stuart Hunt" <stuarth@xxxxxxxxxxxxx>
>>>   To: <webproducers@xxxxxxxxxxxxx>
>>>   Sent: Friday, May 23, 2003 11:44 AM
>>>   Subject: [webproducers] Re: sales commissions
>>> 
>>> 
>>>> 
>>>> Hi, there,
>>>> 
>>>> We're paying our marketing/sales guy a 10% commission on project
>>> sales,
>>>   and
>>>> for additions/updates too.
>>>> 
>>>> He's proposing getting other agents to make sales at the same rate and
>>>   then
>>>> adding a 5% on top for managing these agents.
>>>> 
>>>> I was wondering if other's have alternative sales commission schemes
>>> and
>>>   if
>>>> they like them?
>>>> 
>>>> Thanks.
>>>> 
>>>> 
>>>> --Stuart Hunt
>>>> 
>>>> 
>>>> 
>>>> 
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>>> 
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