# Need Help With Sales Rep Compensation & Benefits



## bayswiss (Sep 19, 2011)

I know this subject has been touched on several times here in the forums, but I haven't seen a range of answers like I thought I would. So I will ask again .....

Some basic info about our company:

Family owned Nevada Corporation
4 employees (myself, Sales Manager, Office Manager, Production Manager/Graphics Artist)
18 months in business
Small but established customer base
We sell screen printing, embroidered appliqué, embroidery, team uniforms, rhinestone embellished apparel, banners, vinyl graphics, etc.

We have done a good job of penetrating the market in our immediate area. However, it is time to move to the surrounding areas and really fire things up. We believe that we are prepared to move into a larger market and scale the operation up.

The Sales Manager & I have recently had a discussion in which we seem to have very different ideas about what to do regarding compensation of the Sales Rep(s) we will soon be trying to sign on.

So here's the questions: 

Employee or Independent Contractor?
Commission Only or Salary/Commission/Bonus Combo
Do we pay any travel expenses?
Do we provide cell phone and/or laptop?
What might we be able to expect in the first 90 days in sales from the Rep?
What might be expect in sales after 6 months or a year?

I would really appreciate feedback from both business owners and sales people alike. We look forward to your responses.


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## History Clothing (Aug 13, 2011)

Hey there Todd,

Those are some really good questions. And let me start off by saying that I am currently just starting up a garment business, and have no experience with sales managers or reps in this particular industry.

I do, however, work for a company who utilizes both positions to help generate sales. The company I work for (again, far removed from the garment industry) has regional sales managers that we pay salary to and give bonuses for meeting sales goals.

Then it is the job of the sales managers to bring on and manage sales reps. We don't pay the reps any salary, or expenses, or extras. The reps are paid solely on commission. These sales reps always work for rep aganecies that sell for a few other similar lines, and those agencies are the ones to take care of the expenses and everything.

Now, seeing as you have a small outfit so far, you certainly have the option of deciding if you want to bring on an in-house sales force, or use a repping agency. Either is a good choice, but both have their ups and downs.

It is hard to say what will work best for you and your company. The best thing any sales person can do for you is bring in existing contacts and create new contacts, and so depending on who you are able to find (either a rep or someone looking to be brought on-board) the choice might be obvious.

I wish I could give some actual advice, but honestly, as long as you are able to find the right person I think either arrangement should benefit you.

Good luck, and congradulations on being to the point where you are able to expand. Let me know what you decide, and how it works out.


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## Liberty (Jul 18, 2006)

Your compensation question is very, very complex and there is no right or wrong answer. IF you want a self starter, go out and cold call like a fool sales rep then you'd better be prepared to compensate them well and most of those types prefer being an indy. Be warned though that with independant contractors you have very little latitude in dictating policy. Start that conversation with your accountant.

In the promo side of this industry, most all are independant reps, most get a split of the gross profit ranging from 50% to 70% and they are on their own for all expenses.

Just be very very careful with offering a salary or draw against future commissions, it is very easy to get burnt.

I've gotta ask though, what is it you and three people yet everyone is a "manager?"


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## Riderz Ready (Sep 18, 2008)

bayswiss said:


> I know this subject has been touched on several times here in the forums, but I haven't seen a range of answers like I thought I would. So I will ask again .....
> 
> 
> 
> ...


My background is in sales and marketing. Your questions are good but there are no incorrect or correct answers. My first thought was you are a small company and you have a "sales manager"? Is this truly a sales manager that is providing you strategy to expand your sales operation and out their generating new business or answering phone calls? At the stage you are in the sales manager should be a top flight outside sales/marketing person. If not fire them and find one. One good sales/sales manager should be able to generate more business than one production/graphic artist which again begs the question - what the heck is your sales manager doing? Do you really need a sales manager to manage a sales person?


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## MikeWhite (Nov 26, 2012)

Hello, We are a rep/distribution company. I saw your questions and can tell you that the branding of the shirt is your bargaining point. If your shirt is brand new without any type of local or national exposure then it is obviously harder to sell and the rep or distributor will typically ask for the higher end commission rate. For brand names it can go as low as 10% but for newer products in the market or products with very low initial sales or penetration then the rep can ask for as much as 25% on the t shirts.

We currently do licensed collegiate t shirts, hunting related t shirts, sports figures, brand names, car brands, super heroes, breast cancer awareness, anything southern related and a few more.

contact me mark at mikewhitesales.com if you are looking for a sales rep or distributor in the south eastern united states and we can discuss your product. Georgia, Alabama, Tenn, South Carolina, North Carolina, Mississippi.


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