Salesmen Commision?

What do you pay your sales people? Do you pay them off gross or net or flat rate?

I never could understand how a quality conscious roofing company would even use commissioned salespeople. There are so many latent problems especially with retrofit jobs. Maybe that is why there are so many disasters out there. Storm chasers are often nothing but salesman.

Apple's -n'-oranges.....I'm w/Natty as well....."Insurance game" is whole 'nuther ethic dimension.....(How's that for "PC"?)

But that's not what I said, Mike. I didn't even imply that we tell a salesman to go get as much as he can, and he gets 50% of that portion above our normal price. I went into great detail to explain that sometimes an adjuster pays more than we charge normally, and that extra money has to go somewhere.

Natty thinks it all should go in my pocket, I think half of it should go in the salesman's pocket.

Maybe I'm an idiot too, but I'm with Natty on the 50/50 and agree that we all have our price, but to have established whatever "your price" is, then tell a salesman I'll give you half of anything you get in addition..... Nah, don't agree with that at all.

I've even credited invoices with a nice note about how the job went better than we thought it would and thanks for their trust.

GK, it is a struggle to find a strategy that doesn't have your salesmen selling roofs for the least price they can get away with because it's easier. There are so many gray areas in commercial roof bidding, e.g., how many HVAC and are they on curbs or runners, gravels stops or tall parapets, how tall, how small, difficult access, cut up, etc.

Having a uniform price is bunk and even Natty knows that. We have had lengthy discussions about up selling here. So how is it less like "gouging" to sell a roof at the normal 40% gross profit, but then upgrade the customer to walkway pads at 80% profit? It's not gouging, there are just times when you bid jobs higher than others.

Hey Clvr, glad to hear that the spreadsheet was helpful! It has helped me to understand what jobs make us the most money and what jobs I need to jack up my prices on.

This topic about sales commission is one that I need to get a handle on. I want to hire someone to do sales for me as it takes up a large portion of my time and I want to ease out of this business sooner than later. I am going to be talking with a salesman from another company that I think would fit in here but not sure if I can afford him. I am also concerned that he can bring in more work than we can do and I may need to hire more help and make more headaches for myself than I solve. It seems that there is always a new hurdle to get over as the years go by.

LOL! I get it, you aren't serious. Surely you aren't serious?

You say that charging more than the normal price is gouging, but then you say that I'm a fool for giving half of it away and should keep it for myself?????????

I get it, you're just trying to irritate me. Carry on...

Roofguy Said: Well thats exactly right. It is foolish to suggest that there is one fair price to charge for roofing, as Natty suggests. Every company has a different cost/overhead structure. What he talks about is akin to price fixing.

twill59 Said:

Exactly Twill. I assume you pay by the hour, just like myself(and probably many of the others here.) I don't know how you run business, but I used to be very sloppy. I was really shooting from the hip up until two years ago. Just signing contracts and kickin ass. It seemed like their was no way we were losing money and we weren't on most jobs. I didn't track the money enough.

I got a spreadsheet from GKRFG that helped me tremendously. It was simple, I could have easily made it but I didn't. Now I track every job's hours and I KNOW how we are doing even though I round a few numbers here and there.

What I found was that I was completely wasting my time doing the harder jobs. We were doing them for free quite often, but because we always stayed so busy and didn't watch the books, we never really noticed just how bad we were shortchanging ourself on certain jobs.

I've been consistently making the harder ones more worth my time OR watching the other guys get them. But then again, I just did a trainwreck last week, we made about $250 over the course of three days.

It is nearly impossible to predict your profit without playing the sub game.

twill59 Said: All I know is that after job costing, I hope Ive made a profit.

After a few years of doing this, I know that no matter how many profitable jobs I complete, there is always a train wreck coming up that is going eat up some profit from the other jobs.

Of course Im managing some things wrong, but my point is...I dont feel like I ever over profit on any one particular job.

The profit that concerns is me year end.... the aggregate

Well that's exactly right. It is foolish to suggest that there is one fair price to charge for roofing, as Natty suggests. Every company has a different cost/overhead structure. What he talks about is akin to price fixing.

natty Said:

Roofguy Said: So you are suggesting I be greedy by taking it all myself?

No, I am trying to get you to explain how taking an upcharge then splitting it 50/50 with your salesman is not price gouging the client whether or not insurance is involved. Seems to me that 10% is plenty to pay a salesman especially since you apparently treat him as an independent contractor.

Let me type slowly: I-t I-s n-o-t a-n u-p-c-h-a-r-g-e. Getting it yet?

It's a straw horse and unless you're simple beyond belief, you know that.

But I'm happy to see that you've decided what is fair compensation for all roofing salesmen. :-)

If you really run your business the way you say, then you should get on your knees everyday and thank the Lord, because it is a veritable miracle.

All I know is that after job costing, I hope I've made a profit.

After a few years of doing this, I know that no matter how many profitable jobs I complete, there is always a train wreck coming up that is going eat up some profit from the other jobs.

Of course I'm managing some things wrong, but my point is...I don't feel like I ever over profit on any one particular job.

The profit that concerns is me year end.... the aggregate

Roofguy Said: So you are suggesting I be greedy by taking it all myself?

No, I am trying to get you to explain how taking an upcharge then splitting it 50/50 with your salesman is not price gouging the client whether or not insurance is involved. Seems to me that 10% is plenty to pay a salesman especially since you apparently treat him as an independent contractor.

So you are suggesting I be greedy by taking it all myself?

Evidently you have little experience with commercial roof claims if you think there is anything resembling uniformity in the process. Adjusters often pay way less than they should, but every once in awhile they pay more than they should. Sometimes they pay more than we ask them to pay. This is especially true of independent adjusters who get paid a percentage of the claim.

Roofguy Said: You read what you wanted to read.