How to pay your salesmen?

Hello Everyone, I own a roofing company outside of Chicago Illinois and I was wondering how other owners pay there salesmen salary/commissions. I'm having a hard time deciding what or how I should structure there pay. Also we do a lot of repair work and for example we will give the estimator a hour pay to put the estimate together and then usually the salesmen will make anywhere from 7-10% but what I'm finding out is the salesmen are making just as much as the company so there is obviously a problem...

Suppose, in Example Z, that a piece of work sold for $11.528.23 but that another piece of work was significantly different? As far as I know, there were no other jobs like this one that sold for as much money octodle. Even though they advertised for entirely different roles, are both of the salesmen at this job fair entitled to 10% of the commission on the tickets they sell?

Does anyone tie there % of sale commission to the current price of material?

So the going rate according to this thread is 7-10% of sale. What if shingles almost double in price again like they did in 2008?

We are not storm chasers. Used to pay 8%. Now according to the math I should offer 6%. I provide truck, gas, 401k, and approx. 25 leads per week during the busy season. A 30%/70% split for anything sold over our base prices (30% to salesman). 10% for door knocks (if they want to). 1 million a year is easy, 1.5 million should be sold, and sky's the limit after that. But I'm looking to attach the 6% to the current price of shingles. Does this seem fair?

patty cakes as a former estimator why shouldn't you reply?

Hey what's up John. This is what I am thinking.....

% of sale commissions can be inaccurate unless all jobs are sold at the same profit margin.

Salesmen A - 1,000 dollar job that produces 250 dollars profit before overhead expenses.(25%) gross profit margin Salesmen B - 1,000 dollar job that produces 500 dollars profit before overhead expenses.(50%) gross profit Margin.

10% commissions = 100 dollars paid to salesmen on both 1,000 dollar jobs. Salesmen -A- made(100/250) or 40% of the gross profit on that job was paid to the salesmen. Salesmen -B- made (100/500) or 20% of the gross profit on that job was paid to the salesmen.

Salesmen -A- gave something for free, copper upgrade, so he could get the sale. Costing the company 250.00 of free work. Salesmen -B- sold the job without giving any service or upgrade away for free, so the company kept the 250.00 of profit.

But, both salesmen got paid 100 dollars. In this scenario it was unfair for salesmen B.

It is obvious in this scenario, but

What if in an example -Z- we say a job was sold for 11,528.23 project and another job completely different Job -X- sold for 14,269.31 Totally different projects, different materials, etc. Is 10% of the sales tickets on this job fair for both salesmen who sold these two entirely different jobs.?

There is no way to really tell unless you sell all jobs at a standard gross profit margin %. or pay your salesmen a percentage of gross profit like Sillabica does.

Ottawa_Roofer, thanks for giving the only straightforward answer on here.

I offer commission percentage based on margin per sale. It works out ok, they can make an awful lot of money that way, but it has worked well so far.

10% commission is extrememly different on a job that is a 40% gross profit, or a job that was sold at 30% / 50 % etc.

Onarooftop

You know I pay my Salesmen better than anyone in this area and it seems that they get kinda lazy and seem a bit unappreciative of the fact I'm giving them more. I have no idea what it is maybe it is the south but honestly it drives me nuts and im thinking of pulling theirs down a bit to see if they shake their asses a bit more!!

7%

Salesman are coin operated B) :) :) B) Deep Down In Florida Where The Sun Shines Damn Near Every Day

Hello everyone!

Without sales you don't have anything! Treat your sales reps like gold and watch them produce. A well trained sales rep is the single most important aspect in our business. I pay off the net profit (materials, labor, dump fees) anywhere from 20-40 percent. My top 3 reps also get a truck to drive, free golf, meals, etc... all 3 make over $100,000 a year. I hope this helps you and good luck!!!

Interesting Subject .... As we are looking to hire a sales / service person .... We are looking at a base salary, truck, cell, etc plus full line of benefits and commission ....

Guess it all depends on what type of salesperson you are hiring as to the pay structure .... In our case there is service and inspections involved and some crew managing so just sales, our position is far from .....

We just placed this ad for a second run .... Have a few good candidates / response from the first run but still exploring our options - a good fit is a must for all concerned ....

FLAT ROOF ESTIMATOR CHICAGOLAND AREA: Can you read Flat Roofs, write specs, sell custom solutions and find / fix small leaks? Let's talk, we have rare opportunity available. Bill Wade 630-898-3230. Email to: wade@affordableroofing.net (Aurora, IL)

This question seems to come up alot here lately. I give the same answer I always do. A low base salary determined alongside whatever else he gets, meal allowance, mileage, company cellphone, vehicle etc plus commission. 7-10% is about the norm although I know a fella that gets 12. But what I don't understand is this "but what I'm finding out is the salesmen are making......blah" What do you care if he gets a commission check of twenty or a hundred grand on a bid that has his cut figured into it? Did he not earn it? Are you saying that is too much money for a guy that caught a lucky break and a bid fell into his lap...... What when he bust his ass with a picky homeowner who insists he come to the house for six different consults, all after nine at night cos he is so busy, and breaks his balls on each visit with dumbass questions and tire kicking for a measly 30sq three tab and he don't make jack. The commission is agreed upon hiring, you are obligated. If you don't like him getting the big checks then you go figure the bid.