Forum Discussion
One way you could do it is give them a percentage of gross profits over a certain theshold - that way you make sure the jobs they are selling are profitable. For example:
1) Gross Profit Bonus
- Measured quarterly using QuickBooks financials.
- Tiers:
* 50%–52% GP: 0.25% of Gross Profit
* 52%–55% GP: 0.50% of Gross Profit
* 55%–57% GP: 0.75% of Gross Profit
* 57%+ GP: 1.00% of Gross Profit
This was for an ops manager position. Basically had a base salary then there is no cap on the amount they can make using these calculations. I don't know how sales reps would like that but it could be a hybrid model.
I actually like this approach because it rewards profitable sales, not just more sales. That’s a big difference. A rep could bring in a ton of revenue but still hurt the business if they’re discounting too much or selling low-margin work. Tying part of the compensation to gross profit gives them a reason to sell smart and protect the company’s margins. The hybrid model could definitely be interesting for sales reps