Sales Reps Commission

What is the standard commission given to your reps?

[Jason_G]

I'm a startup company looking to acquire some additional reps to help sell online development services. The problem is that I've had reps that are requesting that we pay 70% of the gross margin and 50%-70% of the residual sales that come from that client. Is that standard? Any help will be much appreciated, thanks!

J

[korkus2000]

Is this standard web development? In the real world only insurance sales men make that. I would never pay that much. They will run you out of business. The standard for sales in general is between 10% - 25% net. They would have to be really good to get 25%.

They are probably under the impression that web development has no real overhead. If I sold candels the candels would cost money. You would deduct the price of the candle in their commission. They don't realize your time is the asset.

Recurring revenue from the client is up to you. I wouldn't give them the same percentage of commission for no sale. They should have to really cuddle up to the client to get that again.

These are sales people. Don't let them know your profit margin more than they have to.

Prices and costs change by geography. This is what I have encountered in my region.