What should I expect from a commission only sales rep?
We have a commission only outside sales rep for contract manufacturing that has not brought in any new RFQ's in 5 or more years and has had little to no communication with customers in her area. She is the sales rep for our largest customer and after a sales meeting with that customer, they asked who she was, said they have never talked to her and that anything they need is taken care of by our internal staff. This rep is living very comfortably on repeat orders from these large customers and is paid 5% for ALL purchase orders coming from these customers with no limit or reduction in commission percentage at any point. Repeat orders are given to us because of our quality and customer service and this sales rep has no interaction with the customer when an order is placed.
Is this common? It doesn't seem there's anything to motivate the person with the current deal we have with her. As long as our employees are building good parts and giving good customer service, we will continue to receive orders from the customer and the sales rep does not have to do anything to continue collecting 5% commissions. Any PO that comes from the sales reps region is automatically given to the sales rep even though they may have had nothing to do with us landing the order. This rep does not do any customer service and can not do a sales meeting without one of our onsite sales guys because she doesn't know enough about our capabilities'.
I'm not really sure how this is generating MORE sales for our company? Seems like a great deal for her and a not so good, very expensive deal for us. Any advice from people who have bene in similar situations?
The problem with 1099 commission only is that there is no obligation, none at all. and yes, this is very, very common.
You set this deal up this way, so she's just rolling with it, and why not?
I would recommend either 1099 with a draw, that way you can set # of sales metrics to keep the contract (you cannot require anything else from a 1099), or hiring a W2 employee. That way, you gain control and can set full expectations.
Employment is reciprocal. If you show investment and engagement, so will they.
Feel free to reach out to me for a consultation. This is my wheel house!