need to determine my commission, % of sales, as sole market.& sales rep - new product - low profit margin?

Question

The new product is portable pillows, specially designed pillows for loving & body products. Higher end price for pillows, but the cost is very high also. The market potential varies 4 the different products, some have a wide potential, others more limited. I need to determine what is a fair price for my work. The Commission being offered is 15% of gross sales. But I don't feel that covers the marketing end of my work very well. I could build up an entire clientelle for owner then I have to leave, but all I got was the commission of sales? Doesn't sound right. Some have suggested partnering but that is a bit to much I think. I'd like to know how to find out what the market rate for this would be, but don't know where to look or who to ask. Thanks for your Advise :)

Answer 1

Sales and business development is a tough racket. I need to know more in order to offer sage advice. Send me a private email with details for a specific answer. Getting paid on gross sales volume dollars is a safe bet. 1 MM in sales is $150. I usually go for 25% if I am doing most of the work. But for a low margin sale 15% is not bad.

In general I would suggest structuring a deal that protects your investment of time and energy while you market the product. Do NOT work for free! I can tell you the stories of sales reps being ripped off. I was ripped off by a greedy company for $250,000 that was due for product sold. So my advice is to be careful or look for another product line to sell.

Best of luck.

Answer 2

First of all, I think your question develops from a narrow perspective. Surely, the owner should receive the greater bounty from the marketing of an idea since the owner took are of all the unfront costs to produce the produce. Well, what about the marketing team? What's equitable? Actually, you determine that, so I suggest a different perspective. If you're really good at marketing (speaking to various markets) and sales (favorable responses), then maybe you should consider making that your business and contract to market and sell a variety of products and even services, not just one. This one, for example, could produce the investment you need to launch such a business venture. Let's say, for example, the average sale is $500, and your 15% commission earns $75 and you move 1,000 units. Let's say you hold your costs to 40%. That gives you gross revenue of about $52,500. Now if you set aside 50% for your personal income; 40% for business investment and 10% for contingencies. The numbers would be: $26,250 personal income; $21,000, business operations and $5,250 for contingencies. Think about it.
Have a pleasant day

Answer 3

ok i sell in home water treatment systems. i make 20%. even though you think you may not be getting enough,that just the way it is. the other person has the right to make the most money they have more to loose. you want more money step up and become a partner. only way your gonna get more,sorry