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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'?
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.
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 :)
Still, he's religious so he's used to being humble. Don't do the 5,10,15 thing. Do it like this:
Keep it simple ;)
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:>)
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.)
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 :)
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.
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!
$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...
You old romantic
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.
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.
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.
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.
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!.
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:>)