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What % commission for an independent sales rep on equipment priced $60,000-$220,000?
Opinions, please!
-We have 3 pieces of equipment at price points of $60,000, $175,000, and $225,000.
-A business will typically buy one piece of this equipment but some will buy 2-3.
-Equipment lasts 20+ years before replacement, so not many repeat sales but numerous referals to new sales.
-Each sales rep's territory is approximately 1/6 of the US (based on population) which is HUGE
-Every small town across the nation typically has 1-3 businesses that would be candidates for this equipment; larger cities have 20-90 businesses.
-An average sales typically requires 0-1 on-site visits, 3-8 emails/phone conversations, and the timeline is 0.5 to 3.5 months from first contact to sale.
-Sales reps are responsible for all expenses which primarily consists of road travel for on-site visits and installations.
-Sales rep is generally present during installation & training along with company engineers. All service calls thereafter go to the main company.
-Our company attends all major industry tradeshows and gives all leads to the sales rep in said territory.
-Territories are not contractually exclusive for reps, but as a courtesy the company kicks back a minimum of 50% the commission rate on sales made directly in their area even if the sales rep never lifted a finger. This accounts for 1 in 40 sales made in a rep's area.
-This equipment is cutting edge technology that has an ROI of 3-5 years for the business and cuts current operating costs by 35-50%. Sales were slow first 6 months, and have doubled every quarter since launch.
What percent commission would be reasonable for an independent sales rep for a $60,000 piece of equipment, and for the $225,000 piece of equipment? Thanks a million in advance!