How to pay a salesperson


#1

I just hired my first salesman due to growth in my business. Im not sure how to pay a salesman i know by commission. I am looking to see if someone can help me out by letting me know how much commission per job he should be making and how i figure his commision out in wisconsin.Ex: Do you figure without the material added in, or with please help me or guide me! Thank you


#2

Hi,

Just curious.

How did you hire him without talking about pay?


#3

I hired him two months ago. and right now on every job he bids i tell him what ineed and then he adds 10 percent tothe job. And thats why iwant some info Thanks


#4

At first he wanted 30 percent labor and 10 percent on materials does that sound right


#5

You have to decide who makes the rules in your company.

Is the 10 % working out profit wise for both of you so far?

Does he have flexibility on pricing and upgrade charges?

Is he responsible for in job progress updates to the specifications and getting the change orders signed? Does he have an incentive to sell the most expensive job or does he earn the same for a standard 3-tab versus a tri-laminate style upgrade.

You will need to review your pricing and allow for room for him to grow and help expand your business profit margins if he is good at selling.

Or, is he just an order taker? Does he close on the first call appointment usually and does he have any leeway to offer certain discounts for securing the deal immediately?

Just some random thoughts for you to consider.

Ed


#6

By check i suppose.


#7

U.S. currancy


#8

eight to ten percemt is common in florida, Although that depends on what %profit jobs are being sold for.

100% close rate isn’t good when you’re losing money.


#9

Thanks everyone for info now is the 8-10% on the whole job or just profit


#10

IMO, the BEST way to pay someone is 40% of the total profit, plus about 1% “chargeback” on the total cost of the roof for office fees IF you have an actual office staff. If no office staff, then .05% for your misc. headaches in ordering parts, follow up, etc.

Paying a % can cost you in the end & here’s how:

Job sells for 7,500.00, you pay 10%, or 750.00.
To get the business, he cut the sales price & the actual cost of parts & labor was 6,500.00, or a total profit of 1,000.00 that you now only get $ 250.00 of.

On the other hand, @ the same 1,000.00 profit will net sales person 400.00 minus 75.00 office with a staff OR 37.50 if it’s an Army of One (you) in the office. Your profit is $ 600.00 & this makes sure the sales person is always selling ABOVE & BEYOND the cost of parts & labor (plus any other items you make sure he’s considering in his bid such as insurance, workman’s comp, etc).

What happens if he sells a job for 7,500.00 & the cost of parts & labor is 7,000.00? Now you’ve just LOST $ 250.00 just to beat out Brand X roofing… the important part is to NOT get stuck on a set price per square so much as he needs to know what labor charges are going to be, what the extras are for 2 story, steeps, etc., what parts cost per square is on all the various brands & what goes where, if there is extra work for chimneys how that will factor in, etc.

Also, have a specific & set guideline for repairs to “hidden damage” as this needs to not only compensate for labor & parts, but lost time or downtime where the next roof on the schedule might have to be pushed back by a day due to an excessively rotten roof that needs a lot of one on one attention to fascia, soffit, rafters, etc. Don’t ignore this as a potential revenue source, but don’t bet the farm on it.

On some jobs, I’ll purposely trim the price a bit but this is knowing I’ll get it back + more on a decking repair (I’m a bit on the high side compared to most who post here in relation to my charge of around 85.00 to start, plus extra for steeps or 2 story repairs. I also charge a minimum of 65.00 for an 8’ section of plank or shiplap type decking).


#11

I have recently changed companies and the agreement I have is this:

I’m given a par for a certain type of job, lets say it’s 250 a sq Anything above and beyond that number is half mine, minus 2% office. This is a small company with 4-6 men, doing one to one and a half roofs a week. The owner no longer has to bother with sales calls, and he’s making more money so everyone’s happy. If I sell at par, well I would be working for free.


#12

[quote=“JamesFL”]I have recently changed companies and the agreement I have is this:

I’m given a par for a certain type of job, lets say it’s 250 a sq Anything above and beyond that number is half mine, minus 2% office. This is a small company with 4-6 men, doing one to one and a half roofs a week. The owner no longer has to bother with sales calls, and he’s making more money so everyone’s happy. If I sell at par, well I would be working for free.[/quote]

It may be that his office overhead is already covered at $2.50 and the 2% is a little gravy for him. Does he supply a vehicle, fuel, leads?

What are you able to consistently get for 20 / 30 year?

Too, you may want to see if a 45 (you)/55 split of the net profit works for you. If you do, make sure he does not expense away everything to death.

Does he let you see actual final job costs before he/you get’s paid?


#13

Hi ClaimHawk,

He is already getting 50% of everything over the base price.

Why would you need to see anything else?


#14

Lefty, if you’re being paid a % of the profit then you should be able to examine exactly what’s being called an expense to make sure it’s all a legitimate expense.

If you sold a roof that’s 35 squares, you don’t want to see a 38 square order where 3 squares get diverted to something else but is charged off on your job.


#15

My pay plan is very simple. if the roof is 4000.00 and it costs me 2500 to do the roof i make 750 on that roof. Nothing special nothing to look at. it is cut and dry.


#16

Hi,

Read what is written.

He is not paid on profit exactly.

He is paid on anything over a set price.

There is nothing to look at.


#17

I was not saying you lefty. I was just saying my pay plan. Aslong as im over what it costs + 600 im ok. I would split that 600 anyway. I think it is great incentive to sell the job for as much as i can.


#18

Hi Gtp1003,

I was talking to Ranch Hand Roofing and Claim Hawk.

Sounds like you have a similar deal.

He knows what he is going to get paid as soon as the contract is signed. His boss gave him numbers the company needs to stay in business. The business gets paid first. His cut of 50% comes out of the rest. Pretty simiple to figure out. Neither side can cheat.


#19

Lefty said it perfect.

Plus the owner and I are good friends and honest with each other.


#20

[quote=“Lefty”]Hi,
Read what is written.
He is not paid on profit exactly.
He is paid on anything over a set price.
There is nothing to look at.[/quote]

I was just curious about the cost/labor for 20/30 year to try to figure out the owners cost, and mark-up/profit at the base price.

Too, if the owner is ‘making more money now’, maybe the company was and is making enough money on the $2.50 (scenario), and the sales rep should receive a larger split of the gross profit, or all of it.