royalforest Posted October 9, 2009 Share Posted October 9, 2009 When you offer commission for a soda location, is it off the gross or net? Thanks Rich Link to comment Share on other sites More sharing options...
mxer518 Posted October 9, 2009 Share Posted October 9, 2009 typically gross Link to comment Share on other sites More sharing options...
royalforest Posted October 9, 2009 Author Share Posted October 9, 2009 Do you tell the company it is off the gross? Link to comment Share on other sites More sharing options...
royalforest Posted October 9, 2009 Author Share Posted October 9, 2009 Not looking to hide anything, just not sure if I say 10% of gross or 20% of net? Link to comment Share on other sites More sharing options...
boldandmodern Posted October 9, 2009 Share Posted October 9, 2009 I do mine off net. That is for the ones that ask for it and are worth it. Most of my accounts don't do commissions allot easier to manage. Link to comment Share on other sites More sharing options...
G-Vending Posted October 9, 2009 Share Posted October 9, 2009 When you offer commission for a soda location, is it off the gross or net? Thanks RichI have a hotel that gets 15% off net..What i do is take gross less 40% cog then whats left is net.. 40% cog is avg. Link to comment Share on other sites More sharing options...
mission vending Posted October 9, 2009 Share Posted October 9, 2009 I pay whatever the negotiated % is after deducting sales taxes due. (Why pay commission on Sales taxes you collect for the state?) One of the things that I also do is to provide a monthly statement with commission checks showing beginning and ending meter readings, the total sales, the sales tax take back and the net check amount. I can't count the number of times that my new locations have been amazed at the increase in commission $$ they get from me vs their previous vendor even though it's the same % because I'm being upfront and honest in my dealings with them. It's also saved a few accounts for me when another vendor tried to take a location with a larger % offer but wouldn't provide a statement to prove their revenues. Link to comment Share on other sites More sharing options...
royalforest Posted October 9, 2009 Author Share Posted October 9, 2009 Is your negotiated % off the gross or net? Link to comment Share on other sites More sharing options...
mission vending Posted October 9, 2009 Share Posted October 9, 2009 I explain to my customers that I pay X% (generally 10%) on the gross after deducting sales taxes. If they ask why, I simply explain that regarding sales taxes I am simply an uncompensated tax collector for the state of Texas and that I am not going to pay commission on revenue that is not mine to begin with. Works like a charm every time. Link to comment Share on other sites More sharing options...
royalforest Posted October 10, 2009 Author Share Posted October 10, 2009 Thanks, but wouldn't it sound better to give 20% of net( Deduct 50% for product, taxes ect.. then give them 20%) vs. giving them 10% of gross not including taxes? It is the same commission to the business but sounds like more when you say 20%. Link to comment Share on other sites More sharing options...
mission vending Posted October 10, 2009 Share Posted October 10, 2009 Using the 10% after taxes is very simple and straight forward, even a fifth grader can do the math. If you use 20% of net then how will you show your product cost? Will you track it for the individual machines? Use your COG for the entire route? Who wins and who loses in this deal? Even if it is only 1 or 2 % someone gets shortchanged. I've used these questions with prospective accounts to illustrate that they might not be getting everything they are promised. Sometimes it works, sometimes it doesn't. I think the key to differentiate yourself from the others is the willingness to be accountable. My .02 Link to comment Share on other sites More sharing options...
royalforest Posted October 10, 2009 Author Share Posted October 10, 2009 I am new at this so I might be doing this wrong. I just take the gross and cut it in half then give 20%. Sounds bigger then 10% but comes out to be about he same as your figure while still being honest to the business. Link to comment Share on other sites More sharing options...
mission vending Posted October 10, 2009 Share Posted October 10, 2009 Well lets look at a hypothetical example. Suppose you do cut sales in half and pay 20%, yes, by the math it's about the same. So now I'm on the prowl for a new account and the location isn't really interested but they are willing to talk to me just to see if they can get something better. What if I told them that based on the prices you are charging your cost ought to be 40%, not 50% so they are getting taken for 5%(doesn't matter if it's true of not, my job is to just get them doubting you are paying what you promised). How would you go about disproving my statement to the location? Now that I have them questioning you and what your paying it's only a small additional step to take it from you. The last time I had a chance to throw this one on the table I wound up with a soda and snack account that for the last three years has grossed approx 8K a year. Not a great one, but steady cash flow and mine to keep unless someone offers them crazy stuff or I screw it up. Anyone that goes in there after me will have to do this (metered statements) or lose the location, most of the smaller independent operators won't or can't do this. The big players will, but it's not big enough to be worth their time to be able to service it correctly and provide the level of service that I can and do. So now I've got a nice little market niche where it's very difficult to pry me out of account unless I'm screwing up. From the other side of the table, if a location I'm trying to get tells me that they are getting 20%, or more, I ask them 20% of what? How do you know? Can your vendor prove his claims? Is he reporting sales to you or just handing you a check? Have you actually received a check every month or just when you ask about your commissions? I'm not saying it's the only way to do things, but it's the way that I have chosen to run my business. Link to comment Share on other sites More sharing options...
royalforest Posted October 11, 2009 Author Share Posted October 11, 2009 The accounts I give a commission to don't ask how much I made. I count it, cut it in half and then give them 20%. If they want records in the future because you gave them doubt about me, then I can show them the records. Perception sells! 20% is higher then 10% even though it is the same commission to the business. Link to comment Share on other sites More sharing options...
snack dude Posted October 11, 2009 Share Posted October 11, 2009 Okay here goes. I have 46 accounts some that gross 30k a year..... I do not pay commission to any of them. I tell them that number one no vending company will ever pay them a commission. Their employees pay them a commission because the vending company is going to raise their prices and cover all their cost and make a profit then soak their employees so that they can pay them that commission. #2 Anyone who comes in after me with higher prices the employees will sooner or later find out that they sacked the old guy so that they can make a few bucks off the vending machines and more noteably them. ( not good for morale,) And #3 Any vending guy who comes in offering money right off the bat cannot be too good at this or is just starting out, Why else does he have to buy your buisness, because he cannot get any or keep it any other way. Yes I have lost a couple accounts adopting this way of doing buisness. But I have won more than I have lost and to my surprise I have two forture 500 accounts that have thanked me for my straight forwardness and I have been there for over five years. Oh one other thing I also do not have contracts. They are free to fire me and I am free to leave at any time. Good service and treating your customers fairly is what wins in the end. Sorry I just felt that needed to be said good luck to all snack dude Link to comment Share on other sites More sharing options...
mission vending Posted October 12, 2009 Share Posted October 12, 2009 Oh one other thing I also do not have contracts. They are free to fire me and I am free to leave at any time. Good service and treating your customers fairly is what wins in the end. Sorry I just felt that needed to be said good luck to all snack dude I am in agreement with about the contracts, good service and treating customers fairly. With the commissions I'll agree with you on raising prices to get the money from the employees, that's the way it goes, if the location wants the $$ and they understand I will charge higher prices because of it then that's allright by me. Link to comment Share on other sites More sharing options...
coinvestor Posted October 12, 2009 Share Posted October 12, 2009 I agree with snackdude too, but I think that there is a difference between workplace type locations and pure traffic locations. In places where you are providing a benefit to the employees that work there you should not pay any commissions. However when the location really has no direct benefit other than an additional income stream commission is a must (such as malls, hotels, tourist attractions). These are the only accounts that I pay commission on. JD Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now