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  • #978956
    dannyp
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    Hi,

    My name is Danny, Im new on here.

    I am at the end of the developmental stage of my latest business, and will be looking at starting to sell in the coming couple of months so will be looking at a salesman, because me personally im not a salesperson, ive tried before selling on another small startup I did a few years ago and failed, but luckily I can do everything else.

    As this will be my first time using a salesman I would like some advice from others that have used them before and can help point me in the right direction of what I should be offering in % wise, how much retainer I should pay etc…

    Here is a brief background of what they will be selling. They will be selling b2b, the service they will be selling will be re-occurring, so once they sign a client up they should continue to use the service, its not a 1 time sale. The selling price is either going to be $129 or $149 per time they use the service and the service has the possibility to be used many times a month, as well already have a database of potential clients.

    Before hiring the salesman, I will be doing some direct marketing to some of the potential clients do drum up some more solid leads so they can attack them straight away then start on the others in the database…

    What I would like to know how would you pay a salesman like this? Would you have them being solely commission based? If so, how would you pay the commission would it be a % of every time that customer uses the service? Ive seen some people suggest to give them 100% of the first sale and thats it, should I get one on say a $200 retainer and then offer 20% of each sale / new customer?

    The operating line is not very big so will need to costs low until sales start turning over.

    Any advice is greatly appreciated.

    #1111024
    Tony Pfitzner
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    Hi Danny

    An experienced and effective B2B salesperson will be looking at a mix of retainer and commission, particularly in the early days when they are unsure of the market for your product. If a person is any good they are probably going to need a retainer of at least $80k if working full-time, plus commission on top of that. This was what I was paying back last century – selling web development – so it’s probably higher now!

    It may be less if the product is simple and low cost.

    I don’t know your business model, but in most cases I would be looking to test the market using online sales or lead generation. I therefore question the need for a salesperson at all. It is a big mistake to commit to high overheads – such as salaries – in untested markets.

    If you can perfect your sales process online you will learn a lot about your market, your sales process, and probably yourself. You may well gain enough confidence to become an effective salesperson.

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