Donna Ward's List: IPAC

• areas for improvement included ensuring the availability of written reprocessing protocols

• Does your product generate repeat business? When a principal’s line is disposable or consumable, meaning that repeat business exists, commission can often be lower unless it takes time to service the account, generally because the customer does not need to be sold on the product every time. You also have the option of offsetting the lower commission  by paying a higher percentage or a bonus for the first sale to a new customer.
• types of expenses
• Most service based products that do not require manufacturing expense tend to have commissions that can run upwards of 50 percen
• “It is always best to derive the commission amount from the “gross” of the sale. Doing this is simply much cleaner for both parties in terms of verification. When you derive commissions based of the “net” it gets convoluted and is derived using variables like expenses and other information the sales rep is not privy to.
• 90% of all commissions paid to reps are between 5% and 20% based on gross sale amount
• Most reps on our database receive a commission between 5-15%,
• I would consider any marketing materials to be the cost of the manufacturer.
• When should a rep be paid?
• 90% of all commissions paid to reps are between 5% and 20% based on gross sale amount.
   • Commissions differ with each industry.
   • The best way to establish your commission amount is through conversations with knowledgeable reps in your industry
• You might feel that paying the rep thousands of dollars is too much. But realize in that case that you are making about 10 times what the rep is making.
• if you look at the 12% as the full commission, that would be in line with many industry averages.
• The travel reimbursement helps
• I think if you can get 25% you are doing well, especially if you keep your expenses down.
• “10% ongoing, but 30% to bring in the new business”. Or something like that. It kinds of makes sense too because on the one hand the 30% is higher motivation, but getting the new business is harde
• When we give the guideline 10-15% that is a very broad generalization, and it could vary widely in specific industries. Whereas 15% might be fine in retail, it would be completely inapplicable if your were selling “nuclear reactor facilities”. I exaggerate to make the point.
• round 10% would this be true if the product you were selling was worth millions of dollars?
• n general, when total prices go up, commission rates go down.
• bear in mind that large ticket items take longer to sell. What is the sales cycle? Maybe you could be working on a deal over a several year period, and the “large commission” needs to cover that long period. Some common sense reflections of this sort will help you to understand.
• As a generality, 10% commission might be typical, but that is for representation agreements that have no base or expenses. So you have to look at how that would compare to what you get now. If the $1.5 mil refers to your sales, then 2% of that is $30k. With base, that gives $60k. What is your target? Let’s say you are wanting $90k but will absorb all expenses. So that gives a commission rate of 6%, again with no base or expenses
• We are creating an agreement with an educational consultant, who is already connected to therapeutic and other boarding schools because of his current business. We are asking him to promote our ReTribe and Social Pathways (anti-bullying) programming to these schools. I have 3 questions:
   1. If one gig brings in 10,000, what percent would make sense to pay him.
   2. Percent of WHAT? The 10,000 that the school is paying us? Or are we talking about Gross minus the expenses we accrue?
   3. If we pay him 20% (what he is asking) of the first gig, is it considered usual to continue to pay him for future gigs if he is not involved after making the original sale? Or do people do some sort of 2% of all ongoing sales sort of arrangement?
• 20% is not out of line in a start up situation, or one where the volumes would be low.
• Commission is based on your invoice price in most cases.

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• ayment is due only after the sale is closed. 
  
• ndependent Sales Rep operates a independent business, with its own sales and administrative staff. This business is responsible for all related operating expenses, including staff compensation, employee benefits, advertising, auto, insurance, office equipment, taxes, technology, travel, and so forth. These costs must be paid out of the gross commission received by the Rep.
• How much commission is the Independent Sales Rep or Manufacturer's Rep customarily paid? 
  
  Commission rates vary by industry over a wide range, with the majority between 5 - 20% of gross sales.

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