Hello!

Lately I've been wondering about sales related commissions.

Some sales people are paid on commission (recurring percents of the monthly fee).

What would be a fair rate? What would/do you pay your sales people?

Do you think that 10% is the common rate in the hosting industry? 15%? 20%? etc?

Thank you.

100% :P

But I think if its recurring monthly commission, 15% would be a rate though I'm not sure of what the going market rate is.

I personally feel that this should be dependent on how your prices and returns are like.

Calculating your Expense minus Revenue would show you your profits.
then consider how much of this profits should go back into maintainence, bills, staff wages and then lastly your comissions.

But from what I see, its usually 5 to 10 percent on the start and they reward high flyers with more if their sales volumes hit a certain amount every month.

eg. Sell 100 accounts and get to share 10% of the monthly total profit pool :)

The 10% Commisson only based approach will only really work if you intend selling high end dedicated servers ,if its 10% of a $50 a year hosting plan your going to have to sell an awful lot to make a wage you can live on.

Try with a basic salary plus commisson.

I think this needs a bit of clarifying. I am not a host and I don't intend to hire or get hired. I'm just trying to see things though the host's eyes.

Thank you for the input do far. I'm looking forward to read more.

Calculating your Expense minus Revenue would show you your profits.
then consider how much of this profits should go back into maintainence, bills, staff wages and then lastly your comissions.Agreed. However, as Sposs noted, the employee has to make a living too. Tough ballance.

For sales people I think it's only fair to give them some sort of salary as well, then on top of that have some sort of commission or bonus program setup.

While I don't have any sales people hired at this time, just off the top of my head I think a decent commission rate would be something like 15% reaccuring or 80% first month income.

Thank you for the input Terry. Let's assume that 15% is a regular commission.

Now, my question is, how are affiliates different from sales people in terms of payment? I see affiliate programs that make (IMO) no sense at all, with payments like $10 per sale.

I agree that $70+ for a $100 yearly payment (like some hosts are willing to pay) is exagerated too, but I fail to understand a $10/sale affiliate commission, especially when it comes to landing sales for packages that cost $50+/month for 50GB. Am I wrong? Is there something I miss in this picture?

It really depends. If they were part-timers then a % is ok. So if someone was willing to hire me to work for x amount of hours a week on live chat etc and i manage to sell x amount of hosting, then % would be much fairer for you the host and for me. That means if I don't do my work then I won't get paid.

we do 10% and yeah its working fine.

Originally posted by ldcdc
Thank you for the input Terry. Let's assume that 15% is a regular commission.

Now, my question is, how are affiliates different from sales people in terms of payment? I see affiliate programs that make (IMO) no sense at all, with payments like $10 per sale.

I agree that $70+ for a $100 yearly payment (like some hosts are willing to pay) is exagerated too, but I fail to understand a $10/sale affiliate commission, especially when it comes to landing sales for packages that cost $50+/month for 50GB. Am I wrong? Is there something I miss in this picture?
I understand what you're saying, and truthfully, I really don't have an answer to it. One could really say that an affiliate could almost be considered an independent sales represenative for you. Some sales jobs I see offered around here are nothing more than glorified affiliate programs.

Some sales jobs I see offered around here are nothing more than glorified affiliate programs.Agreed. That's why I fail to understand a $10/sale commission.

Even from an advertising point of view, knowing the advertising prices out there, $10/sale is very cheap.

Working in the sales field for over 9 years, on commision as well as base. The going rate for any sales is 8% anything above that amount on straight commision is considered doing quite well. Now granted doing sales on straight commision does cover mileage, business cards and various other selling tools depending upon the agreement with the firm. Most sales people with hosting seem as nothing more than glorified affiliates. And honestly I would rather get paid being a affiliate than pounding the pavement as a salesperson, much less stress! As a affiliate you can't get fired for missing quota as a true salesperson you can and you will!

Just my 2cents

Rich

our resellers most are webdesigners. They design the web for companies and host it at our servers.

The commission I offer to them are simple. 20% for every sales (including the recurring). And for every 10th customer he bring, I give 45%.

Hehe, then you can see the every 10th customer is the bigger package (so that he can get 45% out of it).