shepherdsflock Posted March 13, 2012 Share Posted March 13, 2012 I know I read a thread on here once about the pros and cons of a tiered commission structure and can't seem to find it. Does anyone know of any threads that deal with this topic or would anybody like to contribute new thoughts to the topic? Link to comment Share on other sites More sharing options...
AngryChris Posted March 14, 2012 Share Posted March 14, 2012 Well... if it's the thread that I am thinking it was.... one of the general agreed-upon ideas was that tiered commission was too complicated and it could turn customers off. It seems to be a much better idea (in general) to just offer a flat commission... but that was the most agreed-upon idea. Personally, I think a tiered commission is only useful for mega-accounts.... and even then... the complexity of the structure (even if it seems simple) is not worth losing an account over, is it? Link to comment Share on other sites More sharing options...
mission vending Posted March 14, 2012 Share Posted March 14, 2012 I know I read a thread on here once about the pros and cons of a tiered commission structure and can't seem to find it. Does anyone know of any threads that deal with this topic or would anybody like to contribute new thoughts to the topic? I can't inagine a situation where I would want to implement this UNLESS it was a situation where if sales did not reach a predetermined threshold then there would be no commissions due to the location. Link to comment Share on other sites More sharing options...
Sparta_Automation Posted March 14, 2012 Share Posted March 14, 2012 I can't inagine a situation where I would want to implement this UNLESS it was a situation where if sales did not reach a predetermined threshold then there would be no commissions due to the location. Agreed.....a slightly modified version of this is one of my accounts... I have a minimum commission that I must pay, or 10% net profit whichever is more. Travis Link to comment Share on other sites More sharing options...
shepherdsflock Posted March 14, 2012 Author Share Posted March 14, 2012 Agreed.....a slightly modified version of this is one of my accounts... I have a minimum commission that I must pay, or 10% net profit whichever is more. Do you guys find that customers are pretty open to this approach? I'm getting ready to start making sales pitches to potential locations, but want to have my commission plan ready beforehand. If I tell a location that I'll give them X% of gross once sales pass a minimum of $Y, do you think I'll meet a lot of resistance? Link to comment Share on other sites More sharing options...
Poplady1 Posted March 14, 2012 Share Posted March 14, 2012 Most vendors present 10%/20% commission on sales less sales tax. Some vendors pay commission on sales less product costs. You just have to pick your amount based on your product pricing. Just do it the same at each account and it will be easier to track. And if you should ever be audited (God Forbid) you can show them you do it the same on each account. My line when I spoke to the manager and they asked about commission was "Sure we offer commission but many times employers want us to keep the product cost down for their employees as a free benefit for them. We can do it either way" Then give them a minute to think and most of them will say to just keep the product priced low. Link to comment Share on other sites More sharing options...
Shauna Posted March 14, 2012 Share Posted March 14, 2012 Tiered commissions are just way too much hassle. I have a simple program that calculates all the sales I input for the month and I write a check based on the commission agreed upon with the location. Some locations have a 10% commission, others have 15%. But I pay commissions based on net after COG. Have never had a problem. Link to comment Share on other sites More sharing options...
dogcow Posted March 14, 2012 Share Posted March 14, 2012 .My line when I spoke to the manager and they asked about commission was "Sure we offer commission but many times employers want us to keep the product cost down for their employees as a free benefit for them. We can do it either way" Then give them a minute to think and most of them will say to just keep the product priced low. I use that one too I can't inagine a situation where I would want to implement this UNLESS it was a situation where if sales did not reach a predetermined threshold then there would be no commissions due to the location. I set up a hotel acct in January that is how we agreed on, 3 mo no commissions to get some baseline sales numbers then commissions if the sales hit a certain figure after the trial period. What I DIDNT count on was the daytona 500 and bike-week back to back, i think i may have to ask for more time because i think right now the account is doing better than it normally would. every cop working the daytona 500 stayed there and the machine was completely emptied. also they are selling LSS chips from behind the desk which they told me they would stop doing it is really screwing up my margins Do you guys find that customers are pretty open to this approach? I'm getting ready to start making sales pitches to potential locations, but want to have my commission plan ready beforehand. If I tell a location that I'll give them X% of gross once sales pass a minimum of $Y, do you think I'll meet a lot of resistance? emphasize your service, not commission. bring it up, if they bring it up first. Link to comment Share on other sites More sharing options...
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