If you are the owner of a business and know that you are going to be using US sales reps instead of hiring a full time team of sales people, you already know that your sales staff is going to be paid in commissions instead of pulling a regular salary. What confuses many business owners is knowing how much commission they should pay their US sales representatives.
One of the things that you want to keep in mind is that money is a very powerful motivator, it is what gets people up and off the couch and has them working on making new contacts instead of watching their favorite television show, the higher the commission you offer, the more productive your US sales reps are going to be.
Although there are some companies that try to do a sliding scale commission based on how hard a US sales agent works (after the person hits a certain dollar amount, the amount of commission they receive goes up, usually one or two percent) most companies find that this is a very confusing. The average company finds tings are much easier for everyone if the sales reps are simply paid a flat rate commission. The flat rate commission seems to be the best way to make sure that there is never an argument between the sales rep and the company.
Even if you can’t really afford to pay a higher commission, you should at least look into incentive programs. What incentives are is prizes that you award to your US sales reps when they reach a certain milestone. Mary Kay cosmetics is a perfect example of a company that created an incentives program that inspired their US sales reps to work just a little bit harder and to generate as many sales as they possibly could.
Trying to work out how much commission you are going to pay your US sales agents is not something you should still be trying to figure out as they are out pitching your product. The commission is something that you should have worked out before you even started to invite people to become part of your sales team.
A marketing agreement is something that needs to be signed by both you and the US sales agent that you are going to be working with. Things that should be clearly outlined in this agreement is the amount of commission the agent can expect to make, when the commission is going to be paid to the sales rep, and any incentives program the company may have come up with. The other thing that should be discussed in the marketing agreement should discuss is how disputes are going to be handled.
