# Outside Sales Commission Structure



## DonnB (Aug 26, 2010)

I wanted to get some feedback on sales commissions, I have seen a lot on commissions for specific specialty trades but not for a Remodeler that sells Kitchen, basement and bath remodels as well as windows, siding, roofing and gutters. We subcontract all our work. Our average sale is 12K. We have 1099 commission only sales reps that develop their our leads in addition to the leads we give them. We are currently pay 25% of the jobs gross profit on leads we furnish and 40% on leads the rep develops. Does this seem fair.


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## rtztgue (Jul 9, 2010)

seems very fair. I have also heard some people doing it on net profit. But then again I have talked to a lot of sales people and they claim they can work for 20 different companies and get 20 different commission schedules. 

I would imagine a fair payment would depend on your profitability. if your average job is $12k what is the profit? (no need to answer here) and then their average pay per sales job vs the time and skill it takes to get the job. 

commissions always seem to be weird and the hardest thing to work with.

What do you do if a job is mis-quoted and their is no profit?


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## DonnB (Aug 26, 2010)

We have never had that happen but in the job break down we do have a minimum gross profit that the company retains to protect us if the job is quoted wrong. The reps have a price list for all work except the kitchen, bath and basements which we submit a formal estimate to the customer based on all the dims and requirements the reps bring back. All the other items,(roofing, windows siding, gutters, etc.) they have a minimum selling price to go by.


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## Grumpy (Oct 8, 2003)

Did you read my blog post about how to pay a salesman? http://www.contractortalk.com/blogs/how-to-pay-a-salesman I believe it will answer much of what you are asking. 

25%-40% seems fair to me. But there are many variables that need to be taken into account.


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## DonnB (Aug 26, 2010)

Good info, Thanks


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