Sales Rep Commission Rates and Schedules - Page 2
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  1. #21
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    If you look at it the following way it makes life a lot simpler. It is the job of the rep to win over the customer through many attributes, likes service, defined product value, etc. This may come at the cost of reduced profits. It is up to you as the owner / sales manager if you, as a representative of the company, want the job or not. Not often, but sometimes my sales people have to sell me that the job is worth taking. I have carried a bag and hit the street for many years, so with that background I understand the intangibles with sales.

    Jason

  2. #22
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    The owner of a small shop who is not the first line salesman is going in the wrong direction. His first priority should be finding new customers and giving them the service and delivery they need. An owner cannot afford to hide in the shop and wait for new customers to knock on the door. If he wishes to expand the radius of his business outside of his reach, he needs a straight commission rep who calls on customers with other product lines to sell. The challenge is in locating such a rep. There is a guy out there selling widgets, schnaverns, and axlepoles for other manufacturers to customers who need machine shop services. He would love to bring you some RFQs to increase his volume and penetration with his existing customers. When you start cutting commissions on house accounts, return customers, new customers, etc, you are strangling your own sales effort. As soon as it appears that you are playing games with commissions, a good salesman will cut you loose like a sinking barge. The boss should be the first salesman a company employes. Good Luck, and Regards, Clark

  3. Likes Gary E, Shop Supply Guru liked this post
  4. #23
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    Quote Originally Posted by Whatley View Post
    A salesperson would be bouncing between Office, Engineering/Programming, and Shop Floor.
    No, that is the shop owner, foreman job.
    If he's the salesman is bouncing between Office, Engineering/Programming, and Shop Floor, when does he find new work?

  5. #24
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    I worked in one company and there were two salesmen that stood out.

    One had the highest monetory sales but often at a loss to the company as he excelled at selling non standard products to his customers and the "non standard" invariably cost more that it should have.

    The other, although selling slightly less, almost always sold standard products and always at a profit.

    The funny part was that it took the company over 2 years to discover that the person regarded as "the top seller" was in fact a liability.

    Gordon

  6. #25
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    Quote Originally Posted by Whatley View Post
    What exactly qualifies someone to do sales anyways? Not that I have a plethora of experience to draw on, but from the shops I have worked in I couldn't tell you one Salespersons name. Never even saw most of them, they didn't walk the floor or look into jobs/parts or anything that I had assumed is the job of a salesperson.

    In my mind (and granted that ain't always exactly been in line with reality) A salesperson would be bouncing between Office, Engineering/Programming, and Shop Floor. Making sure that the company wasn't just sent up shit creek without a paddle. I mean checking the average time for metal removal on our machines by the cubic inch, figuring out a price per hole, how much does it cost us to drill and tap 1/4-20 holes?, how much more/less does it cost us to do M12x1.75 tapped holes? How much more expensive are the tools for running a widget in titanium than for running aluminum, do we even have the tools on hand to do it or are we going to blow the budget by purchasing some special crazy ass ground tool?

    So many shops I have been in have complained about how we aren't making a great profit margin and I've seen thousands of dollars dropped into Machines/Pallet changers/etc. to try and increase spindle utilization. But the question I am always wondering is: Maybe we aren't bidding this shit right

    Honestly around or less than $50,000 with commission, sounds pretty damn good. It takes some serious skill to hit that as a Machinist.
    You really need to get a clue.... a SALESMAN does NONE of what you listed... that stuff is for mfg engineers and clerks... a salesmans job is to FIND the work, and get the order at the price agreeeable to the customer and the shops managment alike.

  7. #26
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    Quote Originally Posted by Gary E View Post
    You really need to get a clue.... a SALESMAN does NONE of what you listed... that stuff is for mfg engineers and clerks... a salesmans job is to FIND the work, and get the order at the price agreeeable to the customer and the shops managment alike.
    Thank you for the enlightenment, it's why I prefaced with "in my mind". I truly had no idea, and I won't inappropriately shift responsibility anymore. I haven't spent a lot of time on the other side of the office doors, only on the shop floor itself. It frustrates me sometimes to seen none of what I was talking about actually happening, I guess since I never saw the Salespeople I just blamed them. My apologies.

    I definitely don't want to be a salesperson then, Optimizing parts/programs and figuring out the most efficient and lean way to make something sounds very exciting and cool to me. Finding work and calling/emailing people all the time sounds exhausting.

  8. #27
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    12 on average a good salesmen will generate the same profit as 12 manufacturing employees.

  9. #28
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    OP from 2013, as is last reply. Why are you necro'ing???

  10. #29
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    10% on what they bring in no base

  11. #30
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    It's an old post but an always relevant topic

    I pay my non employee salesmen 3% gross of accounts.

    The people I work with are more mercenaries who have over the years developed lots of contacts in industry. They sell various shops and products, when they see things that suit my neiche we meet up, discuss and price to the customer. As long as that Account is open they get their cut for introducing and maintaining the customer relationship.
    It's unorthodox but it works for me.
    I'm playing the one man band on a new startup. They are great salesmen. I'm better quoting machining and working my finances.

    A good salesmen is worth big bucks when they are motivated. I'd be happy to pay them 1,000,000. At that rate I should be making way more.
    If they are an expense you have not prices your jobs accordingly. Or they suck, send them on their way.

    Same should be said for your amazing setup guy, programmer, whoever
    If they make a larger than normal Impact. Pay them more. A bonus. Wage, Whatever.

  12. #31
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    The hardest thing to do in a manufacturing business is to make the jump from you having to organize everything to being able to retire to bermuda and put your feet up while the money rolls in.........You generally end up in no mans land trying to pull it off...while the manager and salesman rob you blind.


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