What is a good commission only %?

Savages,


Looking for some insights on commission only and face-to-face selling. I'm currently reaching target in my remote sales role (SaaS) within 6 hours a day, and with the time left I want to take a role next to it that will hone my face-to-face selling skills.


A company asked me to sell private label to SMBs in my region, and it seems like it fits the bill. I plan to dedicate 2 hours daily for outbound and hit the road for client visits on Saturdays.


They've mentioned 20% commission, but before I reply, I'd love some intel from you pros: what's a fair commission rate in this scenario?


Here's the scoop on the role and company:


  • Product: Private label of construction supplies for SMBs (think timber trade)
  • Company Stage: Early 2023 startup, currently at 450K ARR in a small market
  • My Territory: Different country, 5x bigger market with tons of ideal prospects.
  • Deal Size: 5K-125K (their current focus is SMB and are not able to handle the logistics for the big guys)
  • I take care of closing & client relationships; they handle logistics and anything else.
  • Bonus: Commission applies to future purchases, so I can build long-term client list.


PS: Any tips for setting appointments or closing people in for example timber trade are welcome. In SaaS I am able to book loads of meetings with calls and email, but these people are not sitting behind a computer so I feel like inviting myself over for coffee is better for this industry.

💰 Compensation
🤑 Side Hustle
🧠 Advice
12
BigShrimpin
Catalyst
7
Account executive
This can't really be answered without knowing what their margins are. If their margin is 25% then 20% commission is insanely good if its 2000% then obviously not so much. This is why solar and HVAC guys get paid so well. Knowing nothing more than average deal size 20% seems good but its gonna come down to how many deals you can close only dedicating 2 hours a day to it but I wish you luck.
@HVACexpert can probably give tips on the face to face aspect of things
jefe
Arsonist
4
🍁
I agree with this analysis.

Also seems like it would fit well into your schedule @rubberducky
Gasty
Notable Contributor
4
War Room Community Manager
Yeah totally on point @bigshrimpin
20% seems good regardless.
I’d say start with it and see what fits the bill. Just like every new job, you gotta test the waters. Coffee is a great starting point. Offline sales are more about talking everything else but business. Relationships sell.
Focus more on small talks, creating an impression, relate business with reality as much as possible. Keep examples ready-people understand a lot better with examples in a F2F convo.

All the best.
rubberducky
Politicker
0
SAE
I got a response saying it's 20% of every deal closed. I need to register as freelancer and all other cost such as car, buying lead lists, etc is on me. They are currently closing one deal a week on average with only one sales person. Will give it a go for couple of months!
BigShrimpin
Catalyst
0
Account executive
make sure you itemize all those expenses in that you can definitely write off a ton of that, good luck with the opportunity give us an update in a few months on how its going
HVACexpert
Politicker
3
sales engineer
20% commission on the total sale ? Or 20% of the margin? That’s two very different numbers so I would double check.
oldcloser
Arsonist
2
💀
Yapp. This ☝️
rubberducky
Politicker
2
SAE
Thanks for asking @HVACexpert . I double checked and it's 20% commish on total sale. Need to register as freelancer and all cost apart from CRM is on me.
poweredbycaffeine
WR Lieutenant
3
☕️
10% to TCV
CuriousFox
WR Officer
4
🦊
I feel that's a fair/assessment
Kosta_Konfucius
Politicker
1
Sales Rep
20% is pretty high but don’t have a benchmark to compare it against since I don’t know of many other commission only positions
Pachacuti
Politicker
1
They call me Daddy, Sales Daddy
They are offering 20% of whatever the deal is you close? And I assume all your travel and other expenses are on you? Then you are probably about right. I'd try it out for a month or two and see if it works for you.
rubberducky
Politicker
1
SAE
Correct. 20% of deal value + a licence of the CRM they use. Travel, eventually buying lead list or anything else is on me.
Abika
Executive
1
Business Development Manager
In my area, Benelux 20% is quite common for freelance sales.
Of course, it depends on market readiness etc. How many meetings would be required to close the deal, what are the ratios win vs lost over the last year within their other regions.
rubberducky
Politicker
0
SAE
Haha The company is from the Netherlands (I'm Dutch), but work in Southern Germany myself. This area is probably one of the best areas for their ICP, so will give it a go. The company is to young to talk about win vs lost ratio in other regions. How they explained it to me: All sales is done F2F. They reach out to approx. 50 companies a week and half of them are ok with coming over for coffee. 20% closes straight away within 2 weeks, 30% need time to think about it and buy later.
Justatitle
Big Shot
1
Account Executive
Is it 20% of the contract value or 20% of their profit margins?
rubberducky
Politicker
1
SAE
20% of Contract Value
Justatitle
Big Shot
1
Account Executive
then it's pretty standard and a good deal
Archie
Fire Starter
0
AE
I’m SMB SAAS avg deal size $3k. Last year commission rate was 19%.
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