how much do you pay a sales manager / sales representative?

I want to know how much do you, on average, pay the person that goes out there and finds you clients?

to give you a clear example, here's what I'm currently thinking about doing: I get a list of companies that work in my geographical area, and I want to give it to a person that has more than 10 years of experience in sales, cold calling and such; I have a team that works for me, having a lot of different web services at my disposal, from making websites, to SEO, local SEO, e-reputation management, social activity management and such. Basically I want to offer web services to companies that need them.

My question is, how much, expressed in percentage of the sales it generates, do you pay the sales guy? then same question, just what if the person searches the market and finds the clients themselves?
(please mention if the percentage you express is part of the income, or net profit?)

thanks, guys!

A commission basis is solid. It limits your risk and provides incentive to your representative.

I Think you Fixed Commission of Sales Person about approx 10 to 15% on his total sales.

TheMoolaMan said:

A commission basis is solid. It limits your risk and provides incentive to your representative.

Click to expand...

That's why I am thinking about doing exactly that; however, my question was how much is the commission supposed to be?

Stone Arche said:

I Think you Fixed Commission of Sales Person about approx 10 to 15% on his total sales.

Click to expand...

Ok, that sounds about right; when you say "on his total sales", is that the value of the sales, before or after applying taxes and expenses?
for example, on a 100€ per month contract, including taxes (meaning the client really pays 100€, but with the tax called (in France) TVA, I only get around 80€, from which I will then take out expenses, like hosting, management (paying a person to take care of the site for that month), and then get a bit more than 50€ as net profit), should the seller get 10-15€ (% from 100), or should he get 5-7€ (10-15% from ~50€ which is the net profit) ?
thanks

[QUOTE="Don Vito" Genovese;6231180]That's why I am thinking about doing exactly that; however, my question was how much is the commission supposed to be?


Ok, that sounds about right; when you say "on his total sales", is that the value of the sales, before or after applying taxes and expenses?
for example, on a 100? per month contract, including taxes (meaning the client really pays 100?, but with the tax called (in France) TVA, I only get around 80?, from which I will then take out expenses, like hosting, management (paying a person to take care of the site for that month), and then get a bit more than 50? as net profit), should the seller get 10-15? (% from 100), or should he get 5-7? (10-15% from ~50? which is the net profit) ?
thanks[/QUOTE]
Paying them from the net profit is next to impossible unless you create a company just for the purpose of paying someone. There are to many variables in the costs to use it on a commission base.

You should write down a business plan first. You should figure out what you want to reach (ex. how many $$$$/month), look what's reasonable in a certain time period for your sales representative to come by.

Since you are thinking about paying him only in commissions, you can pay him lower then the normal fee. Because his expenses will be seperated between different jobs he does and not his 100% of energy will go to your company.

Also know that if you take this person on as an employee, and only paying him by commission, it is illegal in some countries. There are minimum fees which people should make depending on their job description.

I will give you a short example.

Let's say you'd like to have $10.000,00 in sales each month. So before you're expenses, etc. If your representative will be selling contracts of $100.00/month, then it will take him 100 contracts. Try considdering how much time this will take him.

You should pay enough to get him motivated and not to much just to make sure he doesn't start up his own company because he thinks he earns you to much money. If $10000.00 monthly is your goal i'd give him 10% of your sales which results in $10.0

This way if you reach your goal he will have a steady income of $1000.0

WinBoot said:

Paying them from the net profit is next to impossible unless you create a company just for the purpose of paying someone. There are to many variables in the costs to use it on a commission base.

You should write down a business plan first. You should figure out what you want to reach (ex. how many $$$$/month), look what's reasonable in a certain time period for your sales representative to come by.

Since you are thinking about paying him only in commissions, you can pay him lower then the normal fee. Because his expenses will be seperated between different jobs he does and not his 100% of energy will go to your company.

Also know that if you take this person on as an employee, and only paying him by commission, it is illegal in some countries. There are minimum fees which people should make depending on their job description.

I will give you a short example.

Let's say you'd like to have $10.000,00 in sales each month. So before you're expenses, etc. If your representative will be selling contracts of $100.00/month, then it will take him 100 contracts. Try considdering how much time this will take him.

You should pay enough to get him motivated and not to much just to make sure he doesn't start up his own company because he thinks he earns you to much money. If $10000.00 monthly is your goal i'd give him 10% of your sales which results in $10.0

This way if you reach your goal he will have a steady income of $1000.0

Click to expand...

That's exactly what I've been thinking about doing.
I appreciate your help, man!

Thanks - "Vito"

According to GlassDOor, these are their salaries on a US national basis:

Sales Manager median $60,000

Sales Representative median $48,000

First determine the value of the client he got for you. Then determine the mode or the service for which you want to pay him. I would suggest you to pay him regularly on a commission basis as it would give your sales person good incentive to work.

I pay them based on their sales

We pay fix 400 euro + 10% (Czech republic)