What's fair Sales Commission compensation for me?

1 points by networkguy 11 years ago | 1 comment

I'm looking for some insight here, I'm a Sr. Systems Engineer for the Value Added Reseller (VAR) I work with.

Recently, I've moved to a new city, a city where we don't have our own office yet. I'm essentially the beginning of our expansion into this city.

How I got to this situation is I've always wanted to move back to the city I'm in and back in September I got a job offer for a little over $20,000 more than I'm making today at my current company. The company I work for is small >25 people and the job offer came from a VAR with over 500 people.

I love working with the people I work with, my bosses and my work and when they were eager to keep me, I said I'd stay and give it a go and we would work through the details of earning more later.

Obviously to get paid more I my work needs to justify it, which is why part of my goal is to grow the business by finding new customers and generating sales.

The bosses pulled me into the office and discussed the exact same thing, but weren't sure about the compensation model yet.

Where I'm stuck is that I want a commission model that will allow me see the upside of growing the business, but at the same time, I'm paid a salary and my primary job role has been up until now, technical.

I believe our outside sales rep gets 30% on the profits for the business generated, and at first I was thinking that because I have a salary and he's 100% commission that my commission should be less, however in thinking it a bit more, isn't the value and the benefit the same?

I've never been in a sales type role before, and I have no idea how the commission structure should be handled in my situation; obviously the bosses (at least one of them) want to keep this as small as possible because it's more profit for them and the company especially when they aren't paying it out to the outside sales rep at 30%.

Any ideas? I'm completely out of my element here.

welshguy 11 years ago |

Good bosses will want to design a system where you're incentivised to hell, so that you can all be successful. Selling new business is vastly different to selling to an established customer base (upgrades etc) - this would typically be acknowledged in a higher commission rate. Personally, if I were a sales manager, and other things being equal, I'd find it really difficult to pay you the same as a commission-only rep - things have to be seen to be fair, as well as to be fair. What if the commission-only rep found out you were on the same commission rate as well as drawing a salary?

Often, sales reps are paid on a sliding scale, geared to pay higher commission rates after a certain amount of revenue is achieved. There are many ways to skin a cat!

As a reference point, when I worked in a new business sales organisation, my commission plan awarded me 10% of revenue (not profit) which I regarded as wonderfully incentivising.