International Sales Rep (Commission Only or Base + Commission)
Posted by writers1 | Posted in Uncategorized | Posted on 29-08-2010
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In follow up to my previous post “International Sales Reps”, I’ve had several people ask whether they should pay their sales rep on commission only or a base + commission structure.
Commission based outsourcing is very prevalent in today’s economy. Both large and small enterprises use a variety of outsourcing tools to achieve greater profitability and higher production levels than ever before.
Due to the non-existent overhead cost, companies that seek to gain a greater financial advantage continue to use the commission only business model . Commission based outsourcing is a sales process that involves “paying only for performance”. Essential a company only pays its sales staff when a goal is achieved; such as the opening of a new account, or a viable lead. This greatly benefits a company by providing high quality leads and new business with virtually no upfront cost.
Commission based outsourcing can be provided in two ways.
- Commission Only
- Commission, plus base.
Although the commission only structure is what most companies desire, it is riddled with risk for the following reasons:
Commissioned only agents tend to be extremely high performers or entry-level sales agents looking for work.
The highest performing commissioned agents will generally not consider any assignments that provide any less than a 50% commission rate. Although this number seems very high, these agents consistently have very high close rates, making them invaluable to the businesses they work for.
Entry Level commission agents may be more concerned about quantity rather than quality of work and may not be the right fit for your sales team or business. Furthermore, these agents may actually do more harm then good and cause you to lose a potential sale that an otherwise higher qualified agent may have closed.
The commission plus base structure is where the average business should begin to look for sales agents. By providing a sustainable base, these agents can focus on the quality of their work and your potential leads without having to worry whether or not they are going to receive a paycheck for the work and time they have put into your business.
One word of caution: Whether you choose an outsourced provider or an independent international sales agent, make sure the provider is proficient in their language and communication skills. Realize that some languages are not universal; French spoken in France is not the same as French spoken in Canada.
If you need help in choosing an international sales agent or want some detailed suggestions, send me a comment with your info.
