What is a fair commission for a non salesman who sells a job? And we are not talking about a hang and bang... These jobs are north of 100k. And what kind of written guidelines would you have for them? For example, no commission under 10k and commission paid half at start and half paid at final payment.

Why no commission under $10K? If someone sells ANYTHING as an employee, they should get something for their effort. $10K isn't just a lay-down sale, usually. Granted, many items can be a lot more than that price, but it still requires some effort and knowledge to sell it.

8% and he gets to keep his job.

I just figured I would give the boss a starting point. I figured a 10k Job would really only profit maybe 2000 and if my commission was $200. It would be petty. I'm really talking about I'm selling a 300k system and want to know if 10k commission is fair?

I agree with Highfigh.
Imagine that someone walks in the door and offers you a deal so you can do a system for a third party that totals $9,500. You're going to pay the person something, right?

But an employee, on whom you count daily to do his best work and not cheat you of time or parts, makes the same thing happen and you'll pay him nothing? That's an excellent way to foster resentment, which causes passive sabotage of your company. Not good.

By the way, 8% of $300 is $24... as an installer, paid hourly, I'd go for that. It's not that hard to upsell that little, and the more the installer works at it, the more money goes in your pockets. Some should go in his, too.

the profit on $10,000 will vary by company. Me, working for myself with a helper when needed, the profit would be higher than a company who has 40 people on the payroll. They can't do a 10K AV job and be profitable, too many people involved to make it happen, I'd be happy to do one a week and nothing else. Its all relative.

If there is 20% profit on a job, and I didn't have to deal with selling it, writing it, designing it. I'd be ok with giving the person that sold it 20% of the profit. So 2K on a 10K job, I'd give the salesperson $400. If their only job is to sell, then that is on par, figuring that he is either doing a lot of 10K jobs, or is doing larger jobs and this is a small addition. If this is an installer making $20 an hour, or $800 a week, then $400 is a nice addition to the paycheck, and good impetus to try to sell more.

With no sales, there are no profits.

For what its worth, I really don't know what I'm talking about, the only thing I know about business is what I have taught myself from doing this crap.

Slight OT but does this apply to just your install crews? What about PMs who are also the sales guys?

IMO it doesn't matter what you make. An extra $25 or an extra $25k is money in your pocket. If your business model has room for installers making sales then motivate them to make sales for you instead of for themselves.

"I am already paying them, they should be motivated without extra pay" is an attitude thats not based in reality. If you hire an installer and don't pay him to make sales then all he has to do is install and he gets his pay check. Why should he bother trying to make a sale if there isn't a commission?

Not saying anyone here has that attitude. Just pointing it out. Speaking of fostering resentment... One of the reasons i quit my first AV job was...

We (me and lead installer) were at a project down town replacing a clients 1970's giant wooden tower speakers with something new (mid 90's). I ptu the stands together and installed the new speakers and then asked the client "where would you like me to put the old speakers?". He responds telling me i can have them if i am willing to carry them out for him. I agree. Lead tech won't let me use the hand cart. Lead tech tells me i have to carry them myself if i want them. I had to carry them several blocks. They were so massive that i had to carry one 20' then run back and get the other one and carry it 20'. Rinse and repeat.

I get back to the office and the boss and the lead tech approach me and tell me that i cant have the speakers for free. "we are going to give the client a trade in value of $250 for them". Total BS. The client never received a refund. This was Jealous Lead Tech Tax. Same tech kept 3 gift certificates once that were meant for him and 2 other installers.

Anyhow...that really p!ssed me off. It wasn't long before i finally just left.

"Only" and $2000 profit in a $10K job is a problem? Really? You would turn away a customer who wants to spend $10K? Maybe you should work up some actual numbers, rather than assuming.

Fair? Is the commission paid on gross, or profit?

This can be structured a lot of ways:

If the person in the company drives a new relationship with a landscape company, architect, etc. that person should get an override for all deals booked via that new relationship at least for a period of time. Same with driving an individual project.

Pay a fair bonus based on profitability. Also give them a $100 gift card to their favorite restaurant. They will likely wind up taking their significant other or family to the restaurant and it will get noticed and appreciated.

Lots of ways to skin this. Smart companies reward employees and make sure they don't want to leave. This is one of the ways.

Is it safe to assume you all pay % of profit? If Batman up there sells 100k worth of boxes, especially TVs, he's sure as shit not getting a % of gross, I hope.

Be sure to lay the rules out for everyone. Sales people can be trouble. If an installer adds something while on a job the salesman sold. The sales person wants to claim it as their sale since it was their customer. If an installer adds another pair of speakers while on site, pay him the commission and tell the sales guy he should have done it himself if he does not like it. I frequently ran into this selling remotes on site. The sales guys even tried to start this BS saying they talked to the customer about everything you can think of while they were in the store. So if the customer added it, they could say they sold it. That did not work well. Back to the commission. It should be the same as you pay a salesperson.

Upselling on a job is tough to qualify. Did the initial sales guy prime the pump but the customer originally decided against it? I would constantly inform customers they needed something but it was dismissed until the tech brought it up again. We constantly upgraded certain things because the homeowners would rather be told something from the tech vs. the slimy sales guy.

So how do you determine those numbers??? Probably a better discussion for IP.

With that said, of course if a tech brings you a contractor, leads, or builder there should be some compensation. What that is, I'm not sure. I'd be more willing to base it off of profit vs. overall sales.

How are techs bringing in 100k jobs?

I worked for a stereo store and we had lots of disputes over commission. At one sales meeting, I had had enough of the bitching and as I walked out, I said "I waved to him on the freeway" because the arguments between the two were so ridiculous. Eventually, it was decided that the commission on any sale where a legitimate split was warranted would be halved, with 50% going to the store and the rest shared by the salesmen. If someone stole a sale, and it was often a no-brainer because we each had a solid customer base, the one who stole the sale got nothing. This was fine until one guy started becoming friendly with everyone else's customers. The result was that these customers were under the impression that it didn't really matter who they bought from.

It's a slippery slope- if a sales manager has the task of sending new clients to each sales person and routs calls to them, based on previous job involvement, it can work. If it's a retail store and people walk in, it's harder to manage.

Regardless, if an installer talks to a client about add-ons, they should have some kind of document to show this and report to whomever is in charge of the project. If the sales department had no contact with the client about the specific add-on(s), the installer can get something for it but it should be understood that they shouldn't look for things to add, just because they can make money. Causing a rift between a good client who may spend hundreds of thousands of dollars and the sales department should never be tolerated and this should be understood by all.

The single most important thing is that the customer gets taken care of properly, without any feeling of the inner working of the company.

I am adamant about client remaining with their person of choice (this has cost me money in the past, but its the right thing to do for the company).

That being said, ANY pay plan that is worth a poop, will have a small percentage of the total shop sales earnings split amongst all the sales people.

This gives everybody motivation to help one another and greatly improves moral within the troops.