Sales Compensation Plans

The debate is ongoing about what percentage of total compensation should be base vs. commissions.  Ideally, you want to pay enough base salary so that your sales rep doesn’t need to worry about meeting basic obligations such as food, rent/mortgage and car payments. But you want to avoid paying too much.  You don’t want your […]

I see many postings by companies looking to hire sales professionals on straight commission.  Their logic is that if a sales representative is good, the rep will have no problem “eating what they kill.” Sounds too good to be true, huh? Well it is, because you usually “get what you pay for.”  Let’s look closely […]

When designing a sales commission plan, you need to take into account your expected cost of sales as a percentage of the total revenue. The cost of sales has two parts, a fixed component (salaries, benefits, car allowances, etc.) and a variable component (commissions, awards, bonuses, etc.). The graphic below shows sales commissions as a […]

I’ve recently received a number of questions about recovering outstanding draws when an employee leaves a company. I’ve heard from both sides of the issue, employer and employee. This week, I received the following note: I am an employer with an employee owing a large amount on his recoverable draw. I now find he is being […]