What should I pay a salesman?

[ScottM]

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'?

[ScottM]

Well, the topic of this thread is "what should I pay a salesman?", So I'm trying to stay on topic here, but I just spoke with a new guy, (Masters Degree in Marketing,) He said he'd do sales for me. He figures 100k a year is no problem. No problem at all. He's got some great ideas...and experience.

Now if I could just find a thread on WW that talks about how much to pay him...:>)

So I am going to work some things out with him and will report the 'ups and downs' in a new thread as soon as I get something going.

(As a quick aside-one of the bigger businesses I've been thinking of contacting actually e-mailed ME (unsolicited) yesterday...:>)

I'm excited now.

[gopi]

Hey Scott .. you are making me to think new possibilities man :)

[mivox]

Now if I could just find a thread on WW that talks about how much to pay him...

:) Stick with 20% plus performance bonuses. You can work out bonuses as customized incentives for the individual salesmen, or have a company-wide policy.

Keeps it nice and simple.

[gopi]

I will say have a base commission of 25% and increase in 3 - 4 levels upto 40% .

Also Make sure that 40% commission is unattinable in another 2 years :)

[przero2]

thanks Scott, we got excited about this too and on our way drawing plans for 100s of regional directories... looks promising so far ...!

[Tor]

What we pay our salepeople is 35% commission when they have closed a deal, and after we have received payment from the client. I think it`s important to keep the commission structure simple and straightforward.

[Chris_D]

I totally agree - keeping the commission formula simple really is the key.

If your guy can't work out, in his head, on the fly, how much the prospect's signature on a piece of paper is worth in HIS pocket - your formula is all wrong. He won't be able to motivate HIMSELF.

And thats the key. What the deals are worth to HIM.