How Much Should I Pay Sales Person?

rimalala on 20/11/2021 - 19:54
Last edited 21/11/2021 - 13:03 by 1 other user

How much should I pay a sales person that talk to shop owners to sell my saas product? (commission only). Thank u

How much is the product sell for?
Around 100 per month

How complex is the product to explain how it works and will benefit he shop owner
around 30 mins talking

How will the sales person calculate the ROI?
What roi?

Who will be doing pre sales
Another team is handling pre sales

There is another team doing pre sales
Who will be doing post sales support and followup?
Customer support is handled else where

How are you and the sales person going to vet shop owners so you do not waste time on shop owners who have no idea about what saas is?
We have a list of potential clients, sales rep and expected to follow the list, however if they have a reason go off the list it's also acceptable.

How are you going to sell it to shop owners who do not care about the internet?
Those are not our clients

Edit 2: This turned into a shit hole real fast, i simply wanting to know how much we should pay to make it fair if its commison only. our idea is to have 100% of the revenue for 6 months ($600 protentially) per sales.We do not want to take advantage of anyone, our current sales are asking if we can do higher commission and thats why i asked. please kindly click away if you gonna make baseless assumptions, thank you

Education & Work

Comments

  • CrispyChrispy on 20/11/2021 - 19:58
    +3

    … yes

    Need much more information then what you have us, OP.

  • No Username on 20/11/2021 - 20:01

    We need more info.

  • bobbified on 20/11/2021 - 20:06
    +4

    Enough that someone in the position won't want to leave quickly to a competitor.
    (yes, my answer is as vague as your question!)

    btw, if I found out my boss was a regular on OzB, I'd probably be looking for another job! haha

    • spal on 21/11/2021 - 09:04

      Or use replies to the bosses post to drop hints to get a better salary 😜

    • FrugalDealSeeker on 21/11/2021 - 09:30

      my boss was is a regular on OzB

      YES.

      I'd probably be looking for another job!

      Tried to apply a Discount10 coupon on my invoice.

  • AndyC1 on 20/11/2021 - 20:06

    Sales person's normally are not fully paid by commission.

    How much is the product sell for?
    How complex is the product to explain how it works and will benefit he shop owner?
    How will the sales person calculate the ROI?
    Who will be doing pre sales?
    Who will be doing post sales support and followup?
    How are you and the sales person going to vet shop owners so you do not waste time on shop owners who have no idea about what saas is?
    How are you going to sell it to shop owners who do not care about the internet?

    If it's the project ypu have been working on for the last 9 months as per https://www.ozbargain.com.au/node/603123#comment-10060875
    then it's called hipages or airtasker and as such you have not done your homework and found out how these companies get suppliers and clients.

    • rimalala on 20/11/2021 - 20:16
      -1

      Thanks for the comprehensive list, no, it's not that, I handle alot random projects on weekly basis.

      • AndyC1 on 20/11/2021 - 20:17

        So what are the answers to the questions as these are needed in order to estimate how much the sales person should be paid.

        • rimalala on 20/11/2021 - 20:18

          I will have to sit down and go thru them. I will update the post soon

        • rimalala on 20/11/2021 - 20:26
          -1

          Updates
          D

  • Qazxswec on 20/11/2021 - 20:08

    Give em $50

  • Ocker on 20/11/2021 - 20:09
    +10

    If you are grappling with that issue then I do not hold out much hope for your business

  • SF3 on 20/11/2021 - 20:31

    What?

  • hm on 20/11/2021 - 20:33
    +4

    Tree Fiddy

  • dizzle on 20/11/2021 - 20:40
    +6

    Just so you know, even on commision only, you still have to suppliment their wage to make sure it's above minimum wage (including any overtime and benefits).

    So particularly at the start where they will likely be getting 100% brush offs, you need to be paying them.

  • Morien on 20/11/2021 - 20:44
    +3

    https://www.fairwork.gov.au/tools-and-resources/fact-sheets/…

    What is the current national minimum wage?

    The national minimum wage is currently $20.33 per hour or $772.60 per 38 hour week (before tax).

    Casual employees covered by the national minimum wage also get at least a 25% casual loading.

    For award and agreement-free employees, the percentage scale in the Miscellaneous Award is applied to the national minimum wage.

    • Morien on 20/11/2021 - 20:45
      +4

      So for casual, you are looking at $25.41 an hour, minimum.

      Someone else can chime in if there are any differences when commission enters the picture.

      AFAIK you will also need to pay them travel time as well, since they are travelling from place to place as opposed to a fixed address.

  • apsilon on 20/11/2021 - 20:48
    +3

    You want to pay commission only? Sales reps are usually salary or base plus commission. You say above the product is $100/m. Do you intend to pay commission only on the initial sale or the ongoing monthly revenue? Lets assume average income for a sales rep is $50k pa or ~$4150/m. On a 10% commission of $100 they'd have to make 415 sales per month or almost 21 sales per day, or almost 3 per hour. Pretty difficult when you're assuming a sale will take 30min (which IMO is unrealistic anyway).

    • TheBird on 21/11/2021 - 00:01
      +1

      Lets assume average income for a sales rep is $50k pa or ~$4150/m.

      Way, way too low. Unless you're recruiting someone who can't sell their way out of a wet paper bag.

      • apsilon on 21/11/2021 - 12:02

        I'm assuming a junior as no established sales person is going to work for commission only.

        • TheBird on 21/11/2021 - 23:24

          It depends on the person and their options/opportunity cost/return on time/life requirements.

          A great sales person doesn't require a retainer and would often be better off negotiating a better piece of the pie instead of worrying about the retainer.

          Great sales people are among the best paid unskilled workers out there… and right now, there's a huge demand.

  • MS Paint on 20/11/2021 - 21:02

    $2.50

  • SF3 on 20/11/2021 - 21:50
    -1

    They should pay you for the privilege of selling for you.

  • Hardlyworkin on 20/11/2021 - 22:04

    You should pay them at least the relevant minimum wage plus whatever commission structure you deem appropriate. The relevant minimum wage will likely be derived from the Commercial Sales Award. For employees, real estate is the only industry that allows for commission only employment. Any other type of selling requires a minimum hourly or weekly wage.

  • websterp on 20/11/2021 - 22:23
    +1

    A 6-pack for every sale and pat on the back once in a while.

  • deme on 20/11/2021 - 23:26
    +1

    How much should I pay a sales person that talk to shop owners to sell my saas product? (commission only)

    OP I'm just going to say it your business sucks and will fail if this is how you act.
    Go buy some Google/Bing/Yahoo?/Whatever ads

  • TheBird on 21/11/2021 - 00:11

    How much should I pay a sales person that talk to shop owners to sell my saas product? (commission only)

    While this may be a bitter pill for you to swallow, but depending on how technical/difficult the product is to sell, but a commission in the realm of 6-12 months of the total rental isn't outside the realm of unreasonable for full catch what you eat work. You can get a better deal when you have a decent base salary, but what's appropriate depends on you and your product and the required skills of the seller.

  • garetz on 21/11/2021 - 01:04

    Sounds like a pyramid scheme.

  • AustriaBargain on 21/11/2021 - 04:22
    +2

    $100 a month is not a whole lot of money. I guess it's $1200 for you a year, but you'd need to pay the sales person more than $100 per sale to go around trying to talk people/businesses into signing up. So you'll be negative income until you reach the end of the year. If it were easy to sell then you'd sell it yourself.

  • Brendoo on 21/11/2021 - 08:04
    +1

    Assume this is probably a new product that you wish to gain traction and be a success. In which case you want very good, experienced sales people familiar with the market segment you are in and an expert in your software.

    So probably an average base salary of $60,000 per year with commission on top of that based on the number of licenses sold. Base salary should be based on experience. Depends how many will be in your sales team. You could start at a base of $40,000 for absolute juniors, and go up to a base of $80,000 for a senior, with commission on top.

    You have not given much information, such as market segment, product info, licensing model and tiers. You also haven't mentioned if this software brand is already known in the market and this is a new piece of software under a known brand, or if this is completely new.

    We also don't know the scope of this software - is it something large that can run a retail store, or something small? In your research and projections what was your expected revenue per year? This will also play into how many people you hire and what you pay. So it's hard to make a more detailed comment without more detail.

    I've assumed this is a reasonably sized piece of retail software with a low to medium number of customers in the short to medium term (e.g. $1 million+ per year in sales, based on ~1,000 retailers at $100 a month) or you wouldn't be hiring sales reps to physically visit prospective customers as that is a reasonably sized investment in salaries and commission, plus all of the cost of managing employees. If this happens to be much smaller than I've assumed then please update the description of the post with more details.

    • azonki on 21/11/2021 - 08:57

      Add basic tools of the trade = mobile phone, fully maintained vehicle, laptop, travel expenses (you will quickly run out of business opportunities in your local area).
      This easily adds up to another $20K.
      Developing relationships with clients is an expensive task.

    • fprjet on 21/11/2021 - 09:48

      Not to mention each person salesman visits that didn't close will sit in the pipeline and therefore have potential to become sales down the track. Depending on competition and circumstances salesman may not see a sale in first 3 months. Would he be expected to pay for petrol wear and tear on vehicle for3 months with no income. If you have a prospect list already (Linked in , Targeted email campaigns that are relevant, SEO, Websites with customer reviews on your product)

  • AndyC1 on 21/11/2021 - 10:05
    +2

    Op has no idea what ROI is and cannot use google. As such I am giving up on this thread.

  • Sum-Ting Wong on 21/11/2021 - 11:05

    Are you still at MVP stage, or have you already built a sizeable customer base?

    You really need to be calculating what your acquisition cost is per paying customer.

    At $100/month, unless you are already generating significant revenue, it doesn’t sound like your business model would support a full time sales rep on the road talking to shop owners in person.

    Might be better to spend your money on marketing campaigns and free trials.

  • OzHunterNSW on 21/11/2021 - 11:45
    -1

    How much are you paying there other people? Why are you suddenly trying to skimp on this "one vital link" in your chain?
    Pay what they deserve to be paid. Stop trying to rip people off. Add this to your costing. The poor individual deserves to go home to their family and place a meal in front of them. This poor individual needs to pay rent. This poor individual needs clothing, transport.
    Stop looking at ways in which to rip off people.
    Contact the Dep of Fair Trading, they will provide you the CORRECT WAGE in which you SHOULD PAY.

  • mickyb80 on 21/11/2021 - 12:36

    In short… $#17 Tons!
    If they are selling, closing and making you money - then share it and pay your sales people as much as you can. Without them, you have no sales and therefore, not money yourself and no business!

    The end!!!

    (PDS - yes, spoken like a true sales person!).. 😂😁👌

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