Hi, We are a start-up software company, that sales software for facial image analysis (.e.g., face recognition). I am looking for sales people, and I want to compensate 100% based on their sales. I thought to compensate as follows: 1) If they find potential costumers and I close the final deal, then I give them 5% of sales. 2) If they finalize the contract with the company, then I plan to give them 15% of net sales. Does it makes sense? Thanks
Yes, it makes sense, the 5% is for lead generation, the 15% is for lead generation and closing the sale. The issue is that when strictly on commission you may get some very pushy sales people, unless your product is just part of an array of products they offer.
Have you researched your competitors to see how they compensate? And what level of sales pro are you seeking, seasoned or newbie?
If you get sales pros with clients at their fingertips they may be able to make faster sales and deserve to be paid a base + commission. Alternatively you can do a draw against commission, whereby they are paid a salary but that is paid back by their early commissions. It does ensure they don't go hungry.
I've worked draw against commission in the past, was uncomfortable with straight commission until I was an expert in the industry.
You may also want to do something obvious and ask them how they want to be compensated and see what you hear. I am an advocate of asking the market instead of guessing.
Answered 9 years ago
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