Copier Compensation Plans

Art Post (Guest)

Yeah, yeah, yeah, it's been awhile since I've had some extra time to write. The end of my summer Collegiate Baseball Season is ending next week and I hope to resume writing something at least three times a week again.

So, how is your commission compensation program? Is it simple, can you figure how much commission you're going to make on the fly? Or, does your commission compensation program take months and years to understand all of the if's and don'ts?

I've been around long enough to understand the two major commission comp plans such as the gross profit plan (here you get a percentage of the profit made off the sale) and the Revenue plan (Revenue Plans are quota based and your percentage of commission will be dictated by the percentage of discount along with monthly and quarterly bonuses for hitting certain month and quarterly revenue targets).

I'm no rocket scientist (matter of fact I just had to look up scientist to make sure I had it spelled properly), however I've got street smarts, quick thinking, a good listener and can go toe to toe with the best of them when negotiating deals. When I started in the industry I spent some 28 years under the Gross Profit Commission Compensation Program. I was blessed with an easy comp plan that allowed me to always figure in my head how much money I could make on the sale. Nothing is finer than walking out from the sale and knowing how much you made, and to tell you the truth it was also easier to negotiate price (if you had to) when the Gross Profit Compensation Plan.

During the last two and a half years I've been on a Gross Revenue Plan. Trust me I'm not saying that this isn't a good plan to have, it does have some finer points such as the monthly and quarterly bonuses. But it's been much harder for me to grasp how much money I can make especially if I have to negotiate price on the spot. Personally the reason I've been in this business for so long is the fact that I could also create additional income when needed.

Years ago, it was possible to make $1,500 - $3,000 per unit. Nowadays it's a whole heck of a lot less, but to be fair both companies that I worked for that had the Gross Profit Plan eventually bit the bullet! So, I guess the grass is not always green on the other side and comp plans are what you make of them. A key to everyone is to understand all of the points of the comp plan, pretty much know the in's and outs. This will lead to a much better relationship and will forgo any surprises that may come down the road.

I'd like to hear from others as to what type of plan you have and what you like about and what you don't like. I like my new comp plan however if I had one wish it would be that I had someone to explain it to me instead of me having to comprehend all of the finer points.

-=Good Selling=-

7/21/1111:30 PM

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Original Post

Art Post (Guest)

This was emailed to me from a P4P'er who wishes to remain anonymous.

Art,

This past April I had the opportunity to leave the industry but I have kept an eye on it since then. This topic definitely perked my interest because I feel like I was both the beneficiary and victim of a Gross Profit Comp Plan at my last gig. I have been on both sides of this topic, Revenue & GP plans, and I never made more than $51K in a given year and yet I was always 100% of plan. My final year under this GP plan I sold $120 in GP and still didnt make over $51K. Focusing solely on the GP plan because this is where I felt I could have made a ton but I often made nothing on deals, here is the foundation of my plan

base salary $30K
Monthly GP Gate of $8K - dealer gets first $8K back
Commission paid on $8,001 and over at 25% - dealer makes 75% of everything $8,001 and over
Car expense of $.31 a mile only for appts, training, prospecting

So you can see how if I had an absolute monster month I can make a ton of cash however if I sold 4 machines with $2K per, totaling $8 in GP, I wouldn't get paid a dime. And, that $8K in GP typically equates to $35 - $40K in revenue.

I spent 2 1/2 yrs at this particular dealer under this plan and I asked for roughly 1 3/4 yrs for my plan to be revised and changed so I had a better chance to make money on smaller deals while I worked a longer sales cycle for the 6 figure take downs. I finally had the chance to get a better deal worked out but it took another dealer offering me a management position, which of course I took.

People really need to respond to this topic to share their comp plans. from the 1st year kid to a seasoned vet, everyone in the industry can use a fresh set of eyes on these plans.

I saw people writing deals that averaged $20K in GP regularly (the right contacts are just as valuable as the brand name of the copier being sold). I saw a guy write a 40 machine deal, spreading it over 5 leasing companies, make $200K in GP on a 4 yr, FMV lease with a monthly payment of $46K per month. There is money to be made I just dont think a dealer needs 40 street reps anymore. And this is were comp plans will be more critical in attracting new talent and in selling yourself to a dealership. No more cookie cutter plans, one-size fits all. That is old school analog copier business. My belief is this ---- if you want your salespeople to be successful and make the company money, then you're going to have to pay them a nice penny.

8/1/1111:28 PM

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