Question: Commission Structure?

[daniwarrior]

I am in the NYC area and have been receiving offers after interviewing at several web dev firms or interactive agencies.

I have almost 4 years experience, was the top sales person at my previous company and also have project and creative management experience.

I am entertaining offers in Business Development as well as several offers
as a Sales Director or Marketing Director. Although I only have 4 years experience, many companies I've interviewed at feel confident I can take on these roles (as well as myself)...

With that being said....

I am not sure how much to negotiate when it comes to salary.
I do not want to seem greedy.

Many of the offers have been:

Base: 45-55k (almost all have NO health plan as of yet)
Commission: Quota set at around 30k per month with 15% paid out above the quota.

My issue is the commission. Is that typical? To not pay out ANY commission until a certain number is reached?

At my previous employer I was given a base (very measly) and 10% on any sale I brought in with a quota of 15k (no bonuses were ever given after I exceeded the quota every month so I think it was just a number he threw out there).

Any help would be greatly appreciated. Thank you!

[Skip Anderson]

Dani, there's just so many ways employers can compensate salespeople that there really is no "typical" commission percentage or compensation methodology. Having said that, there are often compensation conventions in particular industries, so checking around within your particular industry may give you some good information so you can compare your offers.

Good luck,

Skip Anderson

[AudiMan]

I've seen this in a few jobs I've been in, having to reach a certain quote before my commission was 'unlocked' although this is typically in smaller companies and the commission was pretty easy to reach anyway.

[Apex Marketing and Promot]

Having a base salary in a sales field tends to bring about the laziness in people. Making you hit your budget before commission is paid is very common.

I can't remember the last time I had a base salary.

If your going to get 15% above your base, nothing wrong with that.

If your want more %, give up the base...

[ashleydrollinson]

I personally think in the U.K. base wage is quite important to many people of all levels. They want a) some security and b) to show the company is risking/investing in them as well as vice versa.

Many companies are doing minimum commission rates for new employees. E.g. a guarantee of at least 20k in the first year, even though its all or mainly commission.

[localman]

daniwarrior,

I'll give you an example of a commission structure that worked for us at our company. I ran a small/medium sized web/software development company, which was sold 2 years ago.

We paid a base salary of $20,000.

On top of that was a sliding scale commission for new customers, which started at 8% and steped up to reach a maximum of 15%. It was based on the montly cummulative sales amounts. The more you sold, the more commission you made.

The scale was slightly different for selling to existing customers. When selling to existing, it started at 5% and slide up to 15%, but at a higher cummulative sale amount.

There were a couple 1 off products, such as Hosting, which paid less commission.

That worked well for us.

Another thought for you to consider is, if you're leading the sales team, this becomes a good structure to apply for the whole group. It encourages growth in the areas that help grow a business the most.

Also, something to consider...which I've had mixed results with is commission sharing, where you have a Sales Lead and a Sales Support person and you split the commission 2/3 and 1/3.

So, say for instance you bring in an additional sales person and you pass on a customer that you decide you no longer "want". You'd become the sales support and get 1/3 commission, they'd get 2/3. This could apply in a few different scenarios.

Hope this gives you some new ideas.

Localman.
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