I wondering how much is the typical commission percentage for sales (third party) that helping me to winning a project ? Do the commission based on project value or from net profit ?
Tell me more
×
Answers OnStartups is a question and answer site for
entrepreneurs looking to start or run a new business. It's 100% free, no registration required.
|
I don't have a percentage for you, but I would definitely be basing the reward off the profit and not the project value. This not only makes sense because the value of the deal to you is the profit not the gross sale value, but also it helps prevent your sales person from discounting the price to get the sale. |
|||
|
|
What are you selling? It makes a big difference. Who sets the price, is the third party allowed to negotiate the price or do you retain control over that? For many things, line the sale of real estate in the USA, the commission is just a fixed percentage of the sales price. How much profit or loss you, the seller, make is of no consequence. Were a variable percentage makes sense is when the costs are known up front and the salesman can negotiate the sales price. If he sells for a higher price he gets more and if he cuts the sales price he gets less. The example here is automobile dealers in the USA. A dealer might pay the manufacturer $15,000 for the car and sell it for whatever he can. The manufacturer really doesn't care because he gets his $15,000 no matter what, even if the dealer has to sell the car at a loss. In addition it is well understood by the public that it is the third party (dealer) who sets the price so they don't get mad at the manufacturer if they pay too much. What should the commission percentage be? It's like anything else, get the best deal you can. |
|||
|
|
