 Feedback on a Commission Schedule
I'm considering a New Bus Mgr position with an up and coming New Media dev co. of a major ad agency (~$3M gross sales). Sales are for project dev services (CD-multimedia, websites, e-Learning to big business.) In this service business much of the work is actually formulating the concept of what is sold. Competition can he hot at the upper levels. There is downward pressure on prices in this techical market. Commissions start at 12% of Earned Revenue for Commission Only, but slide downward to 6% for sales over $2.5M. A Good Salary Plus Commission starts at 2-3% and caps at 4%. All the stated commissions are for the First Year of each project sold, but the commission drops to 1% on the continuation of the project in the Second Year and then 0% after Year 3. Hence, if the initial multimedia or website needs updates and revisions (Version 3.0 and above, which is typical for software development projects) after Year 2 I would see ZIP. Plus, new clients are assigned to an Account Exec who could very well be accepting work directly from the client after Year 2.
The emphasis is obviously on developing new business with a continuous new sales effort. No problemo, I' pumped to do this, but... a commission rate that drops as gross sales goes up and a commission rate that slips over the life of a project is troubling me. Frankly, the title, prestige and potential for a significant base salary (family to support) is very appealing, but the bottom end looks to keep falling out on future income. Any thoughts?
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