What's in Your Wallet?
BFL&S talks to distributors about being compensated for their contributions to the value chain.
Forget religion and politics. Money is the subject for stirring things up, especially when salesmanship is the source of that money.
Consider the reader response to Editorial Director Bill Drennan's editorial in the April issue of BFL&S, which looked at Landy Chase's views on the questionable contributions of seasoned sales professionals. Comments ranged from relief that it was being addressed to outrage that it was even an issue. This is proof that sales is an elusive and hard-to-define craft. Not surprisingly, deciding how to compensate for the skill is not so cut and dried.
BFL&S's annual compensation survey showed that anywhere from 7 percent to 60 percent of annual revenue was spent on compensating sales representatives. And while 401K programs were by far the preferred retirement package, profit-sharing and Employee Stock Ownership Plan (ESOP) programs were also popular and typically offered in conjunction with a 401K.
Here, six distributors offer their opinions on compensation-related issues. Meet the players:
• Bryna Blum, WCBS/E.H. Bickett & Company, Palm Desert, Calif.
• George Crump, CEO, FRI Resources, St. Louis.
• Steve Donovan, owner, South Shore Business Checks & Systems, Hanover, Mass.
• Chip Grayson, president, SBF, Savannah, Ga.
• Harry Fuller, sales representative, Plateau Printing, Oak Hill, W. Va.
• Matthew Ragusa, account executive, PAR Global Resources, Santa Clara, Calif.
Issue 1: Compensation
Grayson: We offer our salespeople a percentage of commission because they work harder that way. If a certain amount of money is guaranteed and salespeople leave the office, you don't know if they are working or not.
Crump: We use a draw against commission, which means we're basically on a commission-only plan. Draw merely means there is a predetermined amount of money the salespeople receive on a regular basis. We designed the draw at about 80 percent or 90 percent of the salespeople's earnings.