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Advice
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Selling product installation but no commissions on it

Hey Guys/Gals,


I need your advice on how to approach my sales manager about this. I sell windows and doors, we are manufacturer of the products. As a manufacturer, we don't have the contractor's license to install them at the customer's house, it's against the code here. We have 3 full time independent installers that work for us, and I have to include their installation price on my proposals, always budgetary to be confirmed by them after an onsite visit. Customers pay them directly, not us.


Here is the low down, let's say I sell 1 bay window at $4K but it needs very extensive renovations, reconstruction of the whole bay window, century house, 2nd story, etc... the installation job is worth $11K. So the client negotiates with me the installation price (not the window), I confirm with the installer for $10K. Well I get paid my commission on the $4K, as the installation is paid directly to the installer (who also takes the risk and guaranties his work for 5 years)... but...


The meat here is in the installation... how do I get paid commish on the 10K install I just ''sold''.


Signed:

PPG - ''Selling something I'm not really selling''

💰 Compensation
8
CuriousFox
WR Officer
+13
Senior Account Executive
@privateryan You have any advice?
CaneWolf
Politicker
+12
Call me what you want, just sign the damn contract
This right here is exactly how this place is supposed to work. Well done @CuriousFox and @privateryan 
CuriousFox
WR Officer
+13
Senior Account Executive
I do my best to connect everyone 🦊
privateryan
Politicker
+8
Director of Sales
Good lookin @curiousfox
privateryan
Politicker
+8
Director of Sales
That’s a tough cookie. I’m in the same industry, and I’d tell you your deal isn’t customary unless you’re strictly a MFGR rep/AE. Granted my exposure may be limited to your market, I’m a member of (and been a speaker at..) the largest contractors network in North America. You’re getting the short end of the stick. To answer directly, you need to ask your manager about exceeding margin and getting a share of the excess. Example: your bay should be sold with the sub installer for 10k, but you sell for 12k. It’s “industry standard” you get 1/2 that “overage” - I’d first look at that as an option. Next - question - do you pick the sub, or how does the installer get scheduled?
ppg
Executive
+8
SUPER-visor
Our service manager also takes care of scheduling 2/3 of the installers, as she is aware of what orders come in when. Never thought of the overage option, but I think there might be an issue with us “selling” the installation service as per the Province’s code to perform renovation/construction work. We would need to carry the licence and would be responsible for any legal issue/pursuit related to the installation indefinitely in case of structural problems I think. I will definitely raise that point up in my meeting. If you have any others like that please pass them along. Great insights. If I could upvote twice I would.
privateryan
Politicker
+8
Director of Sales
To get a spiff from an installer, you’d need to show “preference” - something like “hey, I’ll give you the easy access windows, the ranch homes, the…” etc and the ethics of that is concerning. At the end of the day, you’re feeding the mouths of the installers and the manufacturer and you need to leverage your position. Unfortunately in today’s economic, a monkey could sell our service. Everyone wants it. So, the best way to leverage additional income is your performance vs. expectations. Someone already mentioned it, but you’ll need to use performance metrics compared to industry average to substantiate your value. Then, you need to make it win/win for your employer. Something like the overage is the easiest, because as I said it’s “50/50” so your owner will love getting some additional funds, and you’ll get a huge cut off the top. I have top reps with 250k+ ote and we pay 50/50 overage + 11% commission. This industry will pay sales reps well when you demand it. Hate to say it, but if you’re not getting it, go to whom will pay you. Plenty of places will.
FlintIronstag
Notorious Answer
+8
Chief Marketing Officer
That's tough. Sounds like it is over your head. This may be a contractually obligated part of your company's scope in order to get the deal they have.

I don't know with the information that is provided that there is a good path forward here. Maybe you can ask for an annual bonus based on production and try to backend some commish here.
ppg
Executive
+8
SUPER-visor
Not a bad idea, I’d have to ask if this point was talked about by other salesperson here. Some have been around for 15 years so it must have come up in the past. Great idea about end of year bonus, or maybe a kick back from the installers? Like a spiff ?
FlintIronstag
Notorious Answer
+8
Chief Marketing Officer
kick back probably nein, they wont want to share with you. 
Show 3 more replies
alecabral
Arsonist
+9
Director - Digital Sales Transformation
If it's not standard or customary, not sure your manager would go for it. Now, on the other hand I guess you can build up a case showing how much money on installs you're bringing in, and if it's way bigger than what you're getting for just the window.

Also quick question: do you have a comp plan, like a signed document? if you do and the rules are there and you signed it, not sure it's open to debate! If there's nothing like that, I'd say you have a shot at it.
ppg
Executive
+8
SUPER-visor
Nothing about installs, just a commission table for % margin over list price.
alecabral
Arsonist
+9
Director - Digital Sales Transformation
Right, so if you think this is actually something worth fighting for (meaning they'd be open to discussing it at least), I'd work on a plan. As in, "this is what I'm bringing in vs what I could bring in if installations were part of the mix"

Show 1 more replies
Cornholio
Opinionated
+3
Account Executive
That’s a tough one because I’m sure that extra money for the install is cost of the project with the contractor. I worked for a roofing manufacturer that had a similar set up. It’s tough to get that business as well without raising the project cost. You’d almost have to set something else up on the side with them. Which could obviously cause issues.
ppg
Executive
+8
SUPER-visor
Yeah, sometimes I’m able to sell at higher margins than the installers… like he tells me install is $10.5K, I tell the client 12K, negotiate down to 10K (I knew this type of client, 80s old man, worked as a financial planner for the wealthy, did well for himself and still “works” with his son in the business) and report back to the installer who says: “That’s ok I can go down to $9,500, I knew he’d want to negotiate…” when I just told him I closed at $10K for him… should I be entitled to the $500? Well he certainly didn’t offer! Lol
Cornholio
Opinionated
+3
Account Executive
Haha you’d think so. From my experience with contractors they won’t give up a penny unless they have to. I’d say you take him for a beer and ask how you can get your piece. 
Show 1 more replies
youKNOW
Politicker
+7
Sales Manager
Sounds like a missed opportunity from your ownership. They're making you do the legwork (negotiation) on something that you aren't getting paid for. I'd talk to them about working out a way to mark up the contractor's fee and make it something that you can get paid for.
ppg
Executive
+8
SUPER-visor
I wonder if a spiff from the contractor (like reverse spiff as I’m the manufacturer lol) could be accounted for… The problem is the money doesn’t come to us in any ways, so finance won’t be able to make that a commission… I would have to be paid as an external consultant kind of commission…
Sniper
Opinionated
+3
Enterprise Account Executive
I would raise this to leadership, continue crushing it and selling like crazy (be a machine), document all that sales success in your sexy sales brag book, politely raise your concern again over time, and start making yourself available for other sales jobs. Maybe you won’t get any commission on those installs, but your current employer will feel it when you go to a employer who will pay you for your value. 
ppg
Executive
+8
SUPER-visor
Thanks for the input Sniper.
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