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Sales: What type & percentage commission to pay this "unique" salesman for a upstart digital ads agency?
AB
AB
Assaf Ben-David, Mentor, Entrepreneur, Lawyer, Public Speaker answered:

Well explained question.
I have a lot of experience with affiliate marketing (which is very similar to the situation you’re describing). The commission range varies widely depending on the industry, and can be anything between 2%-30% of the sale - depending on how high the sale is (usually, the higher the sale value the lower the percentage).
In your case, and assuming that you charge your clients a monthly fee, then the best 2 options would be:
1. A one time fee which would be a percentage (10-20%) of the first months payment from the new client.
2. A smaller percentage (5%) of the monthly fee that the new client is paying you, over a 2-3 month period.
Each option has as a stages and disadvantages.
* the above is assuming you only pay the commission for actual sales (a new client who actually pays you) and not just a lead.

There are numerous other payment options, but here is what is important:
1. Offer the salesmen at least 2 options, after you’ve calculated both and are sure that you’re happy with both. This is important because it shows him that you are letting HIM choose (gives a feeling of respect, cooperation etc.).
2. Offer him a fair percentage because at the end of the day, he is bringing you new business.
3. Taking point #2 into account, if you want to offer him 15%, start by offering 12%. At the end of the day this is a business negotiation, so chances are he will ask to raise the percentages a bit, and if you start a bit lower, you will have the flexibility to agree to his higher percentage request (which again shows your flexibility, fairness and willing to compromise- which will make him feel better).
I’ve successfully helped over 300 startups and businesses and would be happy to help you.
Good luck

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