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Hello,
I was wondering if someone could help me with their opinion on what might be a fair offer for percentage of sales. I own a small clothing company and have a good amount of inventory I am looking to move. I have invested all of my own money into this company and the products that I currently have.
I know a guy who wants to help with sales. He plans to sell on the street, at MMA fighting events, and pitch sales to local stores. I am wondering what a fair percentage is that I should offer him for whatever he sells or orders he fills.
Thanks for your help!
 

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Interesting question as I am thinking about the same thing in the future.

Before you decide what to pay him as a percentage of sales, you need to decide if he will be an independent contractor or an employee. If he is an employee, you will have to pay him a salary and comission, or a comission that would make his hopeful earnings close to a regular salary.

As an independent contractor, you would need to offer a comission that, (as stated above), would make his hopeful earnings close to a regular salary.

Take into account the sales price of the garment, your costs and how much of the profit you are willing to give up to have someone else sell it. Normal sales comissions can range between 1/2% to 3% of net sales, depending on experience and how much profit room that you have to work with.

In your honest opinion, how many pieces do you think this person can sell in an average hour, or at one MMA event?
 

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Don't hire him as an employee. It increases your risk and overhead.

You should expect to receive from him what you would get for the shirt if you were wholesaling it to a retailer. He can then sell it for whatever he wants.

Or, if you really want to split percentages, then he would get 1/2 of the sale price. That's a typical retailer markup.
 

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15% of sales but only pay out on items you get paid for first. Don't pay commission on items sold on credit but not yet paid for.
Oh. Also, do you pay a base salary on top of this commission, on just straight commission only?

Thanks everyone for the great info!!

--Jeremy
 

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I used to be a manufacturer's rep. The legalities can get complicated. Paying a rep a salary is one of those complications. Once you set up a salary for that person, they become an employee. Complete with you having to pay Social Security taxes. Stick with an agreement that he gets paid on commison for the gross amount of sales after you have recieved your money for your products.

I wish you well!
 
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