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Question about Sales Commission

Hey Guys,

Wasn’t really sure who to go to to ask this as I’m the only one of my friends who has a commissioned sales job. The background might take a bit of time but I’ll try to summarize as quickly as I can so no walls of text…

Start in Aug 2006 at a company doing sales (only sales guy - I the only sales guy despite them trying out 3 or 4 different other people that didn’t work out - they didn’t make any sales). That year the company did $100k and I started out just making hourly ($12/hr). Didn’t make a commission that year. The next year we did $1 million (about 85% of that was mine) and they switched me over to 100% commission (10% commission on our first job with a client, 5% thereafter).

In 2008 we did $1.53 (about the same % was mine). In 2009 we did $1.34. 2010 we did $1.68 and last year we did $1.71.

Anyways, at the end of last year they switched me over to a flat 6% commission. So far this year we are down about 8% but my commissions are down 21%.

Part of the problem is there are two owners and the main one is my brother (he isn’t involved in the day to day operations, just an investor but still helps out with most big decisions).

I brought this to the first owners attention and he said let’s wait until the end of the year and we can see what the discrepancy is and maybe, MAYBE do some sort of bonus. I then called my brother (big mistake) just to tell him what we had discussed.

He told me that many times in sales (he has been in sales his whole life) they will cut the compensation package on someone regardless of whether or not the company had there best year ever. I told him I didn’t want to be paid anymore or any less; I just thought that I shouldn’t receive a pay cut on our best year ever. We ended up ending the conversation on OK terms but I really didn’t get anywhere.

I know that business and family do not go together but I am and have been pretty devoted to this company and don’t see myself finding another job (I really don’t want to).

My question is: have any of you sales guys had this happen (pay cut when the company had a really good year)?

Thank you for any assistance you can give!!!

[quote]markdp wrote:
Hey Guys,

Wasn’t really sure who to go to to ask this as I’m the only one of my friends who has a commissioned sales job. The background might take a bit of time but I’ll try to summarize as quickly as I can so no walls of text…

Start in Aug 2006 at a company doing sales (only sales guy - I the only sales guy despite them trying out 3 or 4 different other people that didn’t work out - they didn’t make any sales). That year the company did $100k and I started out just making hourly ($12/hr). Didn’t make a commission that year. The next year we did $1 million (about 85% of that was mine) and they switched me over to 100% commission (10% commission on our first job with a client, 5% thereafter).

In 2008 we did $1.53 (about the same % was mine). In 2009 we did $1.34. 2010 we did $1.68 and last year we did $1.71.

Anyways, at the end of last year they switched me over to a flat 6% commission. So far this year we are down about 8% but my commissions are down 21%.

Part of the problem is there are two owners and the main one is my brother (he isn’t involved in the day to day operations, just an investor but still helps out with most big decisions).

I brought this to the first owners attention and he said let’s wait until the end of the year and we can see what the discrepancy is and maybe, MAYBE do some sort of bonus. I then called my brother (big mistake) just to tell him what we had discussed.

He told me that many times in sales (he has been in sales his whole life) they will cut the compensation package on someone regardless of whether or not the company had there best year ever. I told him I didn’t want to be paid anymore or any less; I just thought that I shouldn’t receive a pay cut on our best year ever. We ended up ending the conversation on OK terms but I really didn’t get anywhere.

I know that business and family do not go together but I am and have been pretty devoted to this company and don’t see myself finding another job (I really don’t want to).

My question is: have any of you sales guys had this happen (pay cut when the company had a really good year)?

Thank you for any assistance you can give!!![/quote]

Figure out the barrier to entry and go compete.

[quote]markdp wrote:
My question is: have any of you sales guys had this happen (pay cut when the company had a really good year)?
[/quote]

Yes and it is common to get fucked over cos it is easy to do.

What kind of sales is it? Why can’t you go alone?

[quote]yolo84 wrote:

[quote]markdp wrote:
My question is: have any of you sales guys had this happen (pay cut when the company had a really good year)?
[/quote]

Yes and it is common to get fucked over cos it is easy to do.

What kind of sales is it? Why can’t you go alone?[/quote]

It is a VERY niche business. So niche that I might have a problem finding another job in the same industry that pays as well as we are one of the leaders. My specialty is SEO/SEM marketing which none of our competitors even know what those terms mean really, which is why we dominate.

The issue is they know this.

Sounds like your brother is choosing to screw you. He’s the boss and you can’t/ won’t leave.

What can anyone here add?

[quote]yolo84 wrote:
Sounds like your brother is choosing to screw you. He’s the boss and you can’t/ won’t leave.

What can anyone here add?[/quote]

My question is: have any of you sales guys had this happen (pay cut when the company had a really good year)?

[quote]markdp wrote:

[quote]yolo84 wrote:
Sounds like your brother is choosing to screw you. He’s the boss and you can’t/ won’t leave.

What can anyone here add?[/quote]

My question is: have any of you sales guys had this happen (pay cut when the company had a really good year)? [/quote]

not to be an ass but what are you going to do either way?

Yes - accept it and go back to working there.
No - tell your brother some anonymous posters on a BB forum disagree, and then go back to working there.

?

[quote]markdp wrote:

[quote]yolo84 wrote:
Sounds like your brother is choosing to screw you. He’s the boss and you can’t/ won’t leave.

What can anyone here add?[/quote]

My question is: have any of you sales guys had this happen (pay cut when the company had a really good year)? [/quote]

Yes, I have had an owner try to cut my commission after a really good year. I promptly took my pipeline elsewhere.

I used to do a retail job that was partly commissioned base. Shit like this is a lot of why I quit.

[quote]markdp wrote:

[quote]yolo84 wrote:

[quote]markdp wrote:
My question is: have any of you sales guys had this happen (pay cut when the company had a really good year)?
[/quote]

Yes and it is common to get fucked over cos it is easy to do.

What kind of sales is it? Why can’t you go alone?[/quote]

It is a VERY niche business. So niche that I might have a problem finding another job in the same industry that pays as well as we are one of the leaders. My specialty is SEO/SEM marketing which none of our competitors even know what those terms mean really, which is why we dominate.

The issue is they know this.[/quote]

If you can sell, you can sell.

Everything, computers, cars, baked beans.

Also, you already have half their business, so to speak.

If you can offer a similar product, take your clients, build your own company and get rich.

At the very least, find another company that does what something similar and go there.

Now they may not know whatever it is you do is, but when they have you, they do.

Right now your company is fucking with your livelihood and this is unacceptable.

[quote]markdp wrote:

[quote]yolo84 wrote:

[quote]markdp wrote:
My question is: have any of you sales guys had this happen (pay cut when the company had a really good year)?
[/quote]

Yes and it is common to get fucked over cos it is easy to do.

What kind of sales is it? Why can’t you go alone?[/quote]

It is a VERY niche business. So niche that I might have a problem finding another job in the same industry that pays as well as we are one of the leaders. My specialty is SEO/SEM marketing which none of our competitors even know what those terms mean really, which is why we dominate.

The issue is they know this.[/quote]

You’re either naive or being lied to. SEO/SEM is not a small niche, and at those level of sales if you think you are a big player in the niche you have no idea what the market is like. There are 2700 books on Amazon about SEO… a business doing 2$M a year is not even close to being a national leader.

By the way, I know people who pay 25-30% commission to resellers. Sales in SEO/SEM are everything since it is a very easy niche to operate in with low barrier to entry and most of the work can be outsourced to Asia or done by bots. If you can sell in SEO, you can quadruple your salary if you are only getting 6% commission. Contact some top sites in the niche and ask to do SEO reselling. Of course, I’m assuming you are getting your own leads.

search engine optimization? are you frigging kidding me? That’s about as niche as lady gaga.

[quote]challer1 wrote:

[quote]markdp wrote:

[quote]yolo84 wrote:

[quote]markdp wrote:
My question is: have any of you sales guys had this happen (pay cut when the company had a really good year)?
[/quote]

Yes and it is common to get fucked over cos it is easy to do.

What kind of sales is it? Why can’t you go alone?[/quote]

It is a VERY niche business. So niche that I might have a problem finding another job in the same industry that pays as well as we are one of the leaders. My specialty is SEO/SEM marketing which none of our competitors even know what those terms mean really, which is why we dominate.

The issue is they know this.[/quote]

You’re either naive or being lied to. SEO/SEM is not a small niche, and at those level of sales if you think you are a big player in the niche you have no idea what the market is like. There are 2700 books on Amazon about SEO… a business doing 2$M a year is not even close to being a national leader.

By the way, I know people who pay 25-30% commission to resellers. Sales in SEO/SEM are everything since it is a very easy niche to operate in with low barrier to entry and most of the work can be outsourced to Asia or done by bots. If you can sell in SEO, you can quadruple your salary if you are only getting 6% commission. Contact some top sites in the niche and ask to do SEO reselling. Of course, I’m assuming you are getting your own leads.[/quote]

Fail.

I know SEO/SEM isn’t a niche. OUR BUSINESS is.

[quote]paulwhite959 wrote:
search engine optimization? are you frigging kidding me? That’s about as niche as lady gaga.[/quote]

SEE ABOVE COMMENT.

OP why so secretive…?
also just sounds like youre getting trampled on…so either dont let it happen or do.

[quote]bignate wrote:
OP why so secretive…?
also just sounds like youre getting trampled on…so either dont let it happen or do. [/quote]

I dunno, just paranoid I guess.

Truth is this sounds like a poker game and in order to get what I want I need to go all in (threaten to leave) which I don’t want to do without a backup plan.

[quote]markdp wrote:

[quote]bignate wrote:
OP why so secretive…?
also just sounds like youre getting trampled on…so either dont let it happen or do. [/quote]

I dunno, just paranoid I guess.

Truth is this sounds like a poker game and in order to get what I want I need to go all in (threaten to leave) which I don’t want to do without a backup plan.[/quote]

You already have one, find another company.

At the very least I would find out what they would pay a guy that brings one million in sales each year.

Also, if these kinds of “poker games” take place while you are their top salesman I would get out asap anyhow. Either because they are dicks, or because they are dangerously stupid.

Neither is someone I would work with, for or even near.

I’ve been in medical sales for some time. I’ve never had a flat commission drop, but I’ve had caps imposed for quarters where I’ve exceeded forecasts substantially (ie: my commission went from uncapped to capped). It sucked, but in my field the base salary makes up a huge part of the total compensation package.

This is not uncommon. In Pharma/Device at least, lots of the big players will cap and drop commission packages, even in years where they’ve done extremely well.

As an aside, would respectfully disagree with the “if you can sell, you can sell” position of another poster. There are of course personality traits that can assist anyone in sales (ie: friendliness, general likeability), but in my experience, the more complex a product is, the more that a consultative sales approach is required, which is a completely different skill-set than you usually find with simpler products. I wouldn’t last a single day on a used car lot, and similarly, most used car salesmen wouldn’t last a day selling to physicians.

Also, you look young.

If every two bit mini Machiavelli can ride you like Zorro now, what are you going to do if you have a wife, kids and a mortgage?

Its a bad habit, dont let it get a hold of you.

Make a back up plan and execute it.