 Re: Advanced Sales Rep Commission% Questions
My turn -
1 - Yes and no. You can supply your salespeople with several price schedules, with them understanding that they should use the higher pricing whenever possible.
2 - The varying price schedules will also have varying commission percentages. Say 20 / 15 / 10 and even a 5 or 7 for those large accounts they really don't want to lose.
3 - After a probationary period they should be paid on sales, not collections. At the same time, collecting should be their responsibility and at the 90 past due point they should have paid commissions charged back to them. You could have a period of another 90 days during which if the account does pay the commissions will be re-paid, or have a partial deduction month to month. After the 6 month period they would lose any commissions with no chance of getting them back.
You have to walk a fine line between leaning too much either way - company or salesperson. As noted above, the salesperson should have as steady an income as possible. And the company should expect good judgement on the part of the salesperson.
But it is seldom the salesperson who makes the credit decision, and even where they have some latitude there is someone with the company who can say No.
The time when you have to be most concerned is during the initial period, when the salesperson is new and two things can happen. One is that in a effort to impress with early sales they make some sales to questionable accounts, And the other is they make sales to friends with the intention of collecting big commissions and moving on, with concern at all about later payment.
Back to #1. Having several price schedules, with lower commissions on lower pricing, does give the salesperson some leeway. It can even produce more sales by acting as an incentive for the buyer to place larger orders. You can even have different minimum order amounts for each, but allow the salesperson to ignore them.
"We do have a better price, but it is for orders of nnn or more. I can't guarantee you my boss will OK it, but even with your order about half of the minimum, as a new account, let me try and run it by my boss." You could come back with: "I got the approval on your order at the lower price. The boss said we'd ship the first order at that price and we would keep you on that price for the first xxx months, even though you don't meet the minimum. After that we'll take a look at things and see where we stand."
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