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Discussion in 'Bidding & Estimating' started by pabaker66, Jan 17, 2012.

  1. pabaker66

    pabaker66 Senior Member
    Messages: 117

    untill now I have done all of our Snow removal bids myself. I am looking to take the company to the next level. My question is how many of you trust a salesperson to do your quotes? Do you trust them with the pricing? How many of you use a salesperson to go out and get new bussiness? How do you pay them?

    Thank you in advance for your help.
  2. White Gardens

    White Gardens 2000 Club Member
    Messages: 2,665

    Subscribed. Would like to hear some results also.

  3. MatthewG

    MatthewG PlowSite.com Addict
    Messages: 1,400

    I cant speak for plowing, but I am the manager, salesman, warehouse worker, etc of a mid size carpet company (this is my real job). I am salary, company truck, benefits, plus commission.

    When we mark up the products and labor we have no set markup, but generally like to remain between 25-35%. I know that as the salesman/manager if I have a $100,000 flooring order, I can afford to let it go at 15% margin.

    Right now we also need to hire another salesperson to help me, and I am fearful. Can they be trusted with bids, yes, but they will make mistakes, especially if they are not from the industry. I have made many mistakes bidding in my first 2 years and I still do, most recently I was short 50 feet on a hardwood job.

    Our plan to pay them is on a margin/commission basis.

    Lets say they sell a job for 35% margin, they then get 10% commission of total sale
    30% margin is 8 % commission
    25% margin is 5%
    20% is 4%
    Anything less than 20% then maybe 3%

    Flooring is nothing like snow, I realize that, but I understand your concerns and fears about growing with a new salesperson. My plowing business works on much bigger margins, on salt im at 240%, plowing itself I'm at 50-75%. The salesperson needs to understand costs to keep you productive
    Last edited: Jan 17, 2012
  4. pabaker66

    pabaker66 Senior Member
    Messages: 117

    In my real job I am the General Manager of a RV dealership. Our markup on RV's and parts very so much as well.

    My fear with the trust issue is a salesperson at the bar running his/her mouth about what we get for a lot. This is why salespeople at the dealership have no idea what cost is on any item.

    Maybe I am just being overly causious.
  5. oneoldsap

    oneoldsap Senior Member
    Messages: 188

    You will have to educate that person about the industry , for them to have any success at all ! Take a look at moving up one of the employees you have already that knows the physical and logistic aspects of the business already ! Green help is green help , then you have to deal with the whole learning curve . The only upside of that is you can train them to do things your way .
  6. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Also you need to be careful just to paying him commission because they will sign up stuff just to make money.Put in your contract that they will use,"subject to management approval" before anything is signed .
  7. pabaker66

    pabaker66 Senior Member
    Messages: 117

    So on the as you can tell I am not good at putting my thoughts on the keyboard. What I was hopping to do was hire a sales person to go out and put the company in front of potetial customers. Get me the information i.e. contact, lot sizes, ect. work up the cost and have the person take info back and sell the job. If we get the job then pay the commission after it is signed. The comission i was considering was 10% of the plowing contract. So if they sell a job at 1000.00 per month x5 they would be paid 500.00 gross.
    Does this make any more sence?
  8. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    So he would be the face of your company? Would you sit down and go over the numbers before they are presented? Also are you big enough to handle what could be sold? If you good for only a few places then it's not worth have one.
  9. pabaker66

    pabaker66 Senior Member
    Messages: 117

    After think about what you said earlier, I think it is a must to go over the numbers before they are presented. As for new bussiness if they sell enough we can handle growth at this point x3.
  10. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Well try it out a little this year and don't go crazy. Make up a business plan as to how much you want to grow over the next 3 years.This way this person will know . Are you only going to pay him for new work ? Just make sure you work out want to do at renewal time for each contract he singed up for you. Also are you going to pay royalties to him each year?
  11. pabaker66

    pabaker66 Senior Member
    Messages: 117

    I don't know yet. This is why I have asked the questions on here. Looking for advice and ideas how others do it. So far alot of good thoughts. THANKS