Outside sales reps. question... (wholesale, percentage, sell, companies)

[Rapture]

What is the average percentage sales reps. receive from companies. I believe it's broken into catagories, correct?

[sunsprit]

Greatly depends upon the product lines, types of merchandise or services you are selling, and whether or not you're straight commission or salary or base guaranty plus commission.

I know folks that work on 1/15 of one percent of their product sales in straight commission in the financial markets.

I know of folks that work on 2 or 3% of the net sale.

I know of folks that work on 8 or 10% of the net sale, with some discretion as to the discount off of "list" that they extend to their customer for the products.

I know of folks that work on 33% of the net sale in retail and wholesale product lines.

I know of folks that work on 66% of the net sale in industrial and retail product lines.

I know of folks that can sell products wholesale over the "list" price and keep most, if not all, of the "overage" they generate.

And I know of many commission paid reps that can choose their price points/commission split based upon "matrix" pricing for their clients, with spiffs and other promo's that can greatly add to their monthly or periodic quota and compensation packages.

My product lines range all the way from 3% to 66% in straight commission sales work.

What have you got that you're selling?

[Rapture]

LOL, thanks. I had a feeling I wasn't being specific enough. It would be 100% commission based on the total sale (after discounts). The reason I asked is because I can't remember what they call it, soft lines or goods? I'm probably using the wrong phrase but maybe it's hard goods & soft goods? Well whatever it is....Selling tiki bars, bamboo furniture and supplies, tropical artwork & related items.

What do you sell? I would like to know that also because I'm working on a couple other things which would require a sales rep also and maybe it could help with my decisions. If you don't mind sharing.

[sunsprit]

I work as an independent rep for manufacturers of hard goods in the building/industrial sectors. Lighting lines, epoxy materials (to retail stores, wholesale supply houses, WD's, manufacturers, major end users, and contractor/installers)... and do outside sales work for the contractors who install these products, too.

Additionally, I work as a consultant for these products to architects/engineers/specifiers, and ... from time to time, contract as a site superintendent for a project installation. LOL ... almost anything to "make a buck" which involves my specialized products or knowledge.

If you're thinking about producing hard goods and require outside sales representation, then your initial talks should be with somebody (or a rep sales group) who already is rep'ing similar products. At that point, it's a negotiation dance ... what are you offering, what are they offering ... can you get them to take on your line and give it the rep time it needs to reach your market for the percentage you're willing to pay?

Sometimes, you need to adjust your pricing to create/stimulate market demand as well as pay for all the true costs you incurr to get your product out in the marketplace. The last thing you want to do is sign up an "exclusive" marketing arrangement with somebody who just puts your line in their bag and doesn't do anything with it.

For example, I almost took on a line last year that was fabulous ... engineered stone countertops, mantlepieces, architectural features, sinks, etc. ... beautifully designed, executed, super workmanship, excellent materials and fab work, able to work from sketches for custom projects ... the guys were just all around excellent artists. I did some initial contact work, just to "test the waters", and came up with a verbal committment from a major retail sales chain for 200 stocking items per month. Word got out to an outfit in California that had "taken on the line" previously with a very poorly worded "exclusive right to rep" territory agreement ... they'd wanted the product line for their own chain of retail remodeling stores in California .... that this product line would be showing up in a major household goods retailer in CA ... and those folks screamed for their upcoming "earned" commission throughout the entire company sales I'd negotiated. Needless to say, the guys couldn't pay two commissions at the price point the stuff was to be sold for, so I was out of the picture due to their prior entanglement ... those CA folks had never attempted to sell the product line outside of their own stores. I was the only one who actually tried to "rep" for them .... Ah, the dreams of a multi-million dollar annual net sales volume vaporized.

[Rapture]

Thanks. I'm going to DM more details an maybe you can advise me. If I say more on here it will look like I'm advertising.