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What should I pay a salesman?
ScottM




msg:547249
 9:41 pm on Oct 18, 2002 (gmt 0)

I was so encouraged by the Pubconference that I've decided that I'm going to start trying to get some money to be listed on my website. It's almost a pure content website, but I want to start making some money.

I've got some great positions on the big G, but I'm going to go broke if I don't start making some extra money.

I've decided to hire a salesman to sell listings in my directory. He is a friend, but is actually VERY good at cold calls. (Interesting sidebar-he pointed out that what made him so great was he used to be a Jehovah's Witness--->cold called ALL the time...)

I'm trying to structure a commission scale, but I want to give him some incentive. A listing will vary between $50 and $300 per year.

What is a good pay structure? (It would be, almost always, just a phone call. With ME having to provide follow-up if they are interested, at least in the beginning.)

I was thinking 20% (We have almost no overhead.)

However, I was toying with a graduated scale, based on monthly sales, such as:

0% for less than $100
5% for $100-200
10% for $200-300
15% for $300-500
20% for %500-1000
40% for 1000+

Or something along those lines....

It would obviously be a part time job for him, but with the incentive to earn a living at it.

Does anyone have an ideas as to what is a good structure for this?

The problem I'm having is that I don't have time for sales...(got a full-time 'REAL' job) and I prefer dealing with the computer, anyway.

He's excited, but I need to get him even MORE excited. I believe he could sell very well, but I want him to push it, and a graduated scale makes sense to me.

Am I 'all wet'?

 

mivox




msg:547250
 9:52 pm on Oct 18, 2002 (gmt 0)

That was pretty standard for small newspapers in Oregon: 20% up to a certain amount per month, with an extra 5-10% bonus for all sales above that. A simple 2 tier scale.

A TV station up here adds an annual bonus payment onto the basic 2-tier scale... over a certain level of sales and you get a 5% annual bonus payment at the end of the year.

What dollar levels to introduce the 2nd tier commissions or the annual bonus, I don't know... the TV station's annual bonus level was $100,000, which may be a bit high in your case. ;)

I wouldn't have the scale drop below 20% though.

Shane




msg:547251
 9:55 pm on Oct 18, 2002 (gmt 0)


Hmmmm, how much can the site handle? Or another way, what is the maximum he could sell that makes sense given the site and the potential for visability? (I don't think it would be unlimited.)

Another thought just to throw it out, do you want a salesman or an account exec. If you want him to continue to manage the people who he has sold to, give him a built in renewal fee for when people sign up again.

Lastly, ensure it is not based on sales but on money collected from sales. So, 50% on sale and 50% upon receiving payment?

Accountants always know good ways to structure these things, take one for a drink :)

..... Shane

mivox




msg:547252
 9:58 pm on Oct 18, 2002 (gmt 0)

In general, the newspapers and tv station paid the same commission on every sale, whether it was a new customer or a repeat sale... that way, the longer the relationship goes on, the easier time the salesman has making the next renewal pitch, and the increased ease of earning the commission becomes it's own reward for maintaining the relationship with the customer.

Nick_W




msg:547253
 10:07 pm on Oct 18, 2002 (gmt 0)

You're almost bang on Scott. I wouldn't get out of bed for less than 20% in ad sales but then I wouldn't get outa bed for a ticket price less than $25,000 ;)

Still, he's religious so he's used to being humble. Don't do the 5,10,15 thing. Do it like this:

0-500 15%
500-2000 20%
2000+ 25%

Keep it simple ;)

Nick

ScottM




msg:547254
 10:08 pm on Oct 18, 2002 (gmt 0)

The 'cap' on sales would be about $600,000 a year.

This is just a guess, but I own SEVERAL websites, all focusing on different products....and I mean DIFFERENT.

Minimum 20%? Sounds good.

A two-tier would be far easier. Maybe 20% +10% for $1000+?

Another 10% for a year-end sales quota?

As for money collected, I'm not taking any chances to start...it will be only after I receive the check...

I believe he would be an account manager. (Sorry-very new to this!)

He's currently working an $8.00 job. Yep, I know, he's ripe for the picking:>)

ScottM




msg:547255
 10:14 pm on Oct 18, 2002 (gmt 0)

Still, he's religious so he's used to being humble.

Not a 'witness' anymore. But he still has a religious leaning. He just pointed out that 'sales' and 'cold-calling' are something he is good at, not to mention he doesn't mind the door-in-the-face. He has a great point.

He's young, he's just out of 2 years of college. Got my sister preg...(grrr...) but worth working with. He has ambition, but is kinda lazy. He'd rather talk than do manual labor. (Salesman all the way.)

mivox




msg:547256
 10:15 pm on Oct 18, 2002 (gmt 0)

I believe he would be an account manager. (Sorry-very new to this!)

Pfft. Salesman:Account Manager :: Secretary:Office Assistant

JamesR




msg:547257
 10:20 pm on Oct 18, 2002 (gmt 0)

I wouldn't put a cap on it...after all, if he is doing that well you will be rolling in the dough also.

Think of it this way, if you motivate him right from the beginning (20%), you will have a great salesman from the beginning which is what you want. Even if you give him 20% with more at various tiers, you are still earning 80% of sales you didn't have before.

Properly reward and motivate salesmen and they won't be tempted to bail on you :)

ScottM




msg:547258
 10:20 pm on Oct 18, 2002 (gmt 0)

In our company, (my real job), my boss calls himself the 'just a janitor' (He cleans up messes).

Boy does that throw telemarketers for a loop...:>)

Nick_W




msg:547259
 10:23 pm on Oct 18, 2002 (gmt 0)

Cold calling 'aint all it though. Can he close?

Whatever arrangement you make I'd be damn sure to agree at the outset that if it doesn't work out after a month ---- no hard feelings.

Anyone that's confident can talk the talk, walking the walk is a very different game.

Nick

mivox




msg:547260
 10:24 pm on Oct 18, 2002 (gmt 0)

I wouldn't put a cap on it...

Absolutely... The way I figure it, you can never not afford to pay a commissioned sales person. Any money you pay them is because of even more money they made for you, right? (Especially if you'd rather eat nails than do sales calls yourself... I can identify with that one.)

Cold calling 'aint all it though. Can he close?

Which is the other beautiful part about commissions... no sales = no paycheck = no skin off your nose financially.

ScottM




msg:547261
 10:28 pm on Oct 18, 2002 (gmt 0)

Even if you give him 20% with more at various tiers, you are still earning 80% of sales you didn't have before.

Truth be told, I'd be happy with an extra 10 bucks a month!

But I'm interested in taking it beyond a hobby....and looking for some real money.

As for bailing on me? Well I suppose that could happen, but I'd just up the offering. As you've so elequently pointed out, I'm still making something, when I was making nothing, prior.

Heck, if he was pulling in $200,000 in sales a year, I'd be tickled to receive $50,000 of it!

ScottM




msg:547262
 10:33 pm on Oct 18, 2002 (gmt 0)

Cold calling 'aint all it though. Can he close?

At first? No way!

I'd do the closing. He is still VERY new at what my 'products' are...

After a few closes, he would (should...must..darn-well-better!) learn to do it himself.

Nick_W




msg:547263
 10:35 pm on Oct 18, 2002 (gmt 0)

I dont know anything about your sites but I get the impression you're aiming too high.

$200K a year? at 50-300 a sale? One man doesn't have that much time physically at that rate.

Nick

ScottM




msg:547264
 10:39 pm on Oct 18, 2002 (gmt 0)

$200K a year? at 50-300 a sale? One man doesn't have that much time physically at that rate

That's for a listing in a directory. Year to year I would hope there would be 80% or so repeat customers.

First year would obviously be a starter year....then ramping up.

(added)At 3 a day at an average of say $150?=$450 x 250=$112,000 first year.

But point is well taken....perhaps I AM aiming too high. (It's a PubConference thing...)(/added)

One thing I should add...I live in 'virgin' Internet territory...

JamesR




msg:547265
 10:46 pm on Oct 18, 2002 (gmt 0)

Aim high...it's the moto of money makers at WebmasterWorld (and the AirForce...but they got nothin on us ;))

Nick_W




msg:547266
 10:48 pm on Oct 18, 2002 (gmt 0)

I agree James, just keep your expectations realistic.

The small deals are always the most time consuming and painstaking. Beleive me ;) 3 a day? ---- Unlikely.

Nick

mivox




msg:547267
 10:50 pm on Oct 18, 2002 (gmt 0)

Aim for the stars... if you happen to fall short and land on the moon, that's still quite an accomplishment, no?

Nick_W




msg:547268
 10:53 pm on Oct 18, 2002 (gmt 0)

Mivox: You old romantic ;)

Nick

ScottM




msg:547269
 10:56 pm on Oct 18, 2002 (gmt 0)

Beleive me 3 a day? ---- Unlikely

Even with a book/pamphlet with thousands of potential advertisers?

I mean, they already paid a fee to get listed in this pamphlet...probably a lot. The difference is that the Internet is a better medium for their business.

mivox




msg:547270
 10:59 pm on Oct 18, 2002 (gmt 0)

You old romantic

Old? ;)

The booklet (I assume it's some sort of printed topical directory) definitely gives you a leg up... I assume these are regional businesses? That also gives a huge advantage, as you can pitch your site as being much more targeted than the major SEs. Especially if you can demonstrate significant local/regional traffic.

ScottM




msg:547271
 11:11 pm on Oct 18, 2002 (gmt 0)

Especially if you can demonstrate significant local/regional traffic.

Even better, it's local, regional and even national interest. I've got e-mails and online forms to prove it...

Hundreds upon hundreds of potential customers....all in neat little booklets and pamphlets.:>)

Nick_W




msg:547272
 11:14 pm on Oct 18, 2002 (gmt 0)

Old?

Yeah, we met at pubcon, just a figure of speach ;)

Gotta say folks, all good in theory, but i think this is the wrong way to go. Even a great salesman would be hard pushed to do 2-3 deals a week on something like this.

  • Research/lead sourceing --- bag loads of time
  • Not getting through --- most of the day
  • Getting told to bugger off --- 40% of the time spent on the phone
  • etc etc....

Nick

mivox




msg:547273
 11:22 pm on Oct 18, 2002 (gmt 0)

Sounds like the lead sourcing is already mostly done though... so that's a help. The main problem is convincing the backwoods folks in Scott's area that the internet is a viable and important way of local/regional marketing... ;) Same problem we have here.

I wouldn't expect to get rich off it in short order, but rcjordan makes $ off regional-based internet directory type info stuff. It can be done, if you get the right angle on it.

Nick_W




msg:547274
 11:49 pm on Oct 18, 2002 (gmt 0)

And rhere we finally agree Mivox ;)

If you can up your price by about 300-1000 then your man could make a living - just. You'd be better off putting up some 'get listed' links though In My Not Very Humble Opinion ;)

Nick

eljefe3




msg:547275
 8:56 am on Oct 22, 2002 (gmt 0)

Slightly off topic...

Just curious if you have looked into setting up an affiliate program and get the compatible/complementary sites to sell for you.

With an offline sales guy and a bunch of online sellers (hand picked and recruited affiliates), you should be able to reach your target.

There are some pretty modestly priced affiliate software programs out there for you to test the waters. I'm sure some of your complementary sites also have never looked into the $$ making aspect so if you approach them right, so might get a great response.

przero2




msg:547276
 4:06 am on Oct 23, 2002 (gmt 0)

I don't understand how a regional directory could fetch 50 to 300 a year while a Yahoo listing goes for 299/year. I cannot think how a guy with "real" job elsewhere maintaining a regional directory (how many million impressions a day do you get Scott?) could think of a projection from ZILCH to 600K a year?. sounds way too far fetched to me?

Am I missing something here?. If so, point me in the right direction (someone?) and we could get a lot of these sites developed/launched by our teamsters here!.

ScottM




msg:547277
 11:50 am on Oct 23, 2002 (gmt 0)

PRzero2,

I realize this doesn't make sense, however this is not unreasonable. Many paid the 299 to yah00, only to be buried underneath me, now. Many, many,many pay 1-10k a year for magazine advertising. It's not 'just' a regional thing. It's local (city), and then regional, then national, then worldwide. And in very different sectors.... That's not to mention any new sites I put up in the future.

In one local/regional industry, of which I have excellent ranking, it's $2 billion+ a year industry.

As for 600,000 a year? It was just a guess at what COULD happen if everything was performed without flaw. I don't expect to get rich overnight. (Or by Christmas. But Valentines day is looking pretty good:>)

przero2




msg:547278
 3:10 pm on Oct 23, 2002 (gmt 0)

can you throw and example or two .. this whole thing interests me ... got curious ... and like me think I should give a try?

This 37 message thread spans 2 pages: 37 ( [1] 2 > >
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