Forums: Discussions for entrepreneurs and small business.

This is -not- an advertisement. I am recruiting Independent Sales Reps for my area. I`m offering 30% commission on design PLUS $100 benchmarks for every $2500 they sell. There is not an hourly rate.

Am I short changing people?

I had assumed that an hourly rate + 10-15% would be standard... and because I can`t afford to pay an hourly rate yet, I wanted to beef up the % that I could pay out.

I have had 2 people interested in my general area, which is good - both have been unemployed and turned it down because it didn`t have an hourly rate.

Volume: I believe that a good sales person can bring in a couple of new clients every day while cultivating the people they`ve already visited. There are a -lot- of small businesses in my area as well as Nationally.

Limits: Yes. I am only 1 designer, however - I have the ability to farm jobs out to another designer should I get too much work.

I would potentially assign 1 ISR to a territory. As the only acting rep. from their territory they get the commission sales from -every- order I placed from that territory while working as an ISR for me.

Most sales jobs that have a base pay are minimum wage - which is $7.25 an hour in NY. So $7.25 x 40 = $290 before taxes. In order for a sales person to make $290 a week in commission they would need to sell $967 in design. Break that down daily = $193 in sales every day.

That could be broken down into many different areas. The design of a single book / product guide could run $1,200 - $1,500 all by itself. A brochure and business card sale for the day could generate the same.

If you take into consideration that a good sales person can visit 15 potential clients a day and make a few sales, it stands to reason that they could be more successful than with a base-pay alone.

I`m also going to be increasing my pricing slightly in September. I started pretty low and I believe that my pricing will still be very competitive at my new rates, which will make both the ISRs and myself more money.

From personal experience hiring dozens of "outside"
salespeople on a commission-only basis:  you are
in for a lot of disappointment.

Most salespeople are clueless themselves about how
to generate leads and work the sales process.  Their
skills are mostly limited to "catch as catch can" -
while many will boast of superb skills, when it comes
to the real discipline of hustling sales as a free
agent, most guys can`t hack it... and the ones who
can probably won`t come looking to work for you.

I think what you are asking is if you can take untrained
guys who are out-of-work and turn them into real
salespeople while offering no financial support, nor
real training (since, presumably, you want to hire a
sales staff because you don`t do it well yourself. 
Correct me if I am wrong).

You cannot realistically expect salespeople to do work
you would not do yourself, nor throw them unsupported
 into the punishing world of rejection sales entails... and
dangle big commissions in front of them but offer
no other support.

I don`t say this because I think it`s unethical or
unfair to hire outside salespeople on a strictly-results
basis. I say this because it is unrealistic to expect
success with such an offer.  You`ll attract the
least-capable, the most illiterate and incapable
people to selling for you by doing this.

Most won`t even work up the courage to pick up the
phone and cold call to set appointments... and those
who do will quickly become discouraged and quit without
letting you know.

That was my experience.  I hired over 50 people an
not a single one stuck with it, despite a lucrative
commission structure.

If you want your sales-guys to do the work they need
be making money almost immediately.  If they don`t have
the experience and the inner drive/facility to do bigger-ticket
sales both you and they will probably be frustrated.

Remember, broke guys don`t have marketing skills.  They
usually are feeling pretty bad about themselves.  While
giving a guy in that position a job to do is a good thing for
his self-esteem, you need to assess what both your commitment
to seeing him succeed is, and how much of your own time and
money  are willing to invest in his training are.

Oh.  you could get lucky and get a guy that just takes to
it naturally and starts making money the first day... but
that`s quite a stroke of luck.

Thanks, Loren - what you added to this post makes a lot of sense and I appreciate the insight.

It`s not that I don`t want to do the work myself - it`s that the neighboring counties where I live are quite far away and if I simply sold all the time, I`d never have time for design.

Question: Can an ISR be paid minimum wage + a small commission - say 15%? I can`t afford to hire someone directly taxes and such will kill me.

-------------------------

The older we get, the more excuses we make for not chasing after our dreams. But truth is, goals are attainable at any age.

Nope - I wish I had someone to send me work and get paid to do it. *shrug*

I`ll keep moving forward, tho.