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Old 3rd December 2010, 02:09 AM   #1

Join Date: Dec 2010
Posts: 0
Default Marketing Sales Commission Rate Help

Hi all... question here for any of you who are experienced in sales and marketing in the internet world, based on commissions.

I need to know the age old question of "What is a Fair Commission Rate" for the marketing specialist? Here are the components, and maybe one or more of you can either point me the right way or give me some numbers to work with. I understand there are a plethora of factors, so I am not looking for a definitive answer unless you can give me all the details behind it. Also if you can, please let me know your experience/expertise in the answer and field or please state it is just "what you would do." Thanks!

1. The business is a startup with zero presence right now, and will go live in January.
2. Products are health and diet related
3. Products can be sold as small as one little bottle or a boxed year's supply or more
4. Initial cost of product (includes shipping, labeling, etc.) starts at about $12 and up
5. Sale price will start at about $20+ and up, so we are looking at about a 100% markup
6. Estimated monthly sales target is about $25k/mo which may happen by early next year or mid summer
7. Marketing will be done on all fronts, from internet, social, and print/ads/hard materials
8. My (M) responsibilities will be building the web site (for which labor was paid up front), setting up the shop cart, link to merchant acct, maintaining back end, and all internet and web related promos and marketing, including FB, Twitter, articles, etc, and designing hard marketing material to send to the printers
9. The other two involved are the owner/President (P) who is fully funding (and paying us) and running the op.... the other is a partner (X) who will overlap the owner's duties, which include checking/taking/shipping orders daily, distributing hard marketing materials as well as writing some content, and any other remedial job that needs to be done that doesnt involved marketing on my end
10. My commission will be based on TOTAL net profits, which includes sales from other sources, internet or not. However we are not using phone orders right now so all orders will be going through the web site

So in order to start somewhere, I will put out some numbers, keeping in mind that I am not a sales commission expert, and these numbers may be way off, but it is something to guide you in what kind of info I need:

Commission breakdown (of total net sales profit):
P: 50%
M: 30%
X: 20%

I would also like to see if I can add a clause for a gradated percentage increase after certain milestones have been reached (I have heard many people use this), i.e.,

"At the time when the total gross sales amount since the inception of the program equals $50k, my commission rate will increase to 35%, and after the $200k mark has been reached, it will increase to 40%. This contract will hold at that position until both parties mutually agree to dissolve this business relationship."

I think thats about it, LOL... sorry for the length, but I rather have this than having people go back and forth asking for more details... I hope I have included enough info. Thanks!

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Old 25th January 2011, 04:24 AM   #2

Join Date: Jan 2011
Posts: 2

Thank you!

hannly is offline   Reply With Quote
Old 10th February 2011, 06:45 PM   #3
John nirvaha

Join Date: Feb 2011
Posts: 1
Smile sales compensation

Most common is 20% for commission based or some base pay + 20-30%.
If it is a startup, early sales employees will get some equity.

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