12 replies to this topic

[Jillkey]

I have a rep who hasn't worked actively in several months while she pursues selling real estate. She does not have a contract with me.
One of her customers contacted me today to provide items for an annual event. The last two years I did almost all of the communication, research, quoting, etc, and agreed with my rep to lessen her commission on that job.
What is an appropriate percent to offer her for this year, since this was her customer and I would not have the job without her?

In a similar situation, a school was her customer and one of the parents contacted me for a personal job. They got the company info (we work out of separate locations) from the PTA president. My rep asked for a "finders fee," which I was going to give her anyway even though she was not at all involved. What is the typical or appropriate amount in that situation?

[epicemb]

Jill - If it was your understanding that any customer that she cultivated was hers I think that you need to bite the bullet and pay her. This is one of those instances where your reputation could be sullied - all you need is for this rep to say to others that you stiffed her on a commission.

You should also take this as an opportunity to get this straightened out with her.

[djoctagone]

If you're going to pay her, make sure you dictate that she only gets paid after the customer pays in full. And then put it in writing.

Have you asked her how much she wants?

[Cyncor]

I absolutely agree with Steve. Pay her on this one order and take the time to carve out the agreement.

She does not deserve payment on this order in my opinion but your reputation is at stake so I would pay this one......and clarify the agreement immediately.

As for the parent who contacted you for another order....ahhh no she doesnt deserve a roll-over finders fee.

Geezz does this mean anyone that she ever gave a business card to - who then turns and gives the card to someone else who then contacts you, she gets a cut of?

Crazy. Fix this.

Cynthia

[Jillkey]

Thanks for your imput so far! Yes I asked her and she said she'll think about it. I ended up giving her a flat $75 for that parent job, and I agree that this should not (but can) go on forever.

What percent of the profit do you think is fair in this current situation?

Jill

[epicemb]

Jill - What % is your agreement for? I think that you should start there and then reduce it based on the fact that she is not actively involved in the order - my gut says to cut it in at least half. The other thing to factor in is the time that you are going to spend dealing with this - the smaller this order is, the smaller the potential commission $'s are - you do not want to spend a bunch of time and energy on something small.

Jillkey said:

What percent of the profit do you think is fair in this current situation?

Jill

[AdmanGR]

Jillkey said:

What percent of the profit do you think is fair in this current situation?

Jill

50% profit split, or again, your reputation could be tarnished. I have personally seen this scenario and it can get ugly and the the distributor typically winds up getting the worse black eye.

As Cynthia wrote, straighten out the agreement going forward, but pay until you come to a mutual agreement.

[Promotions Division]

Ask if she plans to sell any more or pursue real estate. She needs to pursue what she wants, decide & move on. Otherwise, this situation will go on forever and be a thorn in your side. Pay her what is fair for the couple orders that have come in although she was not involved, cut losses & encourage her to move on. You don't have the time to deal with stuff like this but, of course, want to be fair. Although commission or finders fee, does or should a reasonable person expect something for nothing. Overall, this is really something that should have been worked out when she first started rather than after it becomes / became a problem. Hind sight is always 20/20 but you need to nip this in the bud

[Cyncor]

In situations like this, we have always had it spelt out in the contract that 6 months past last order with us is as far as we go with paying commission for work not done. After that, it becomes a house account, we solicite direct and no commissions are paid out.

I hope this helps. Please keep us informed on your decision.

Cynthia

[Jillkey]

Cynthia, I like your concrete suggestion of her customers becoming house accounts after 6 months. Everyone keeps commenting on my reputation, but this is more about keeping peace with her (we have a relationship outside of work) and doing the right thing, morally. She lives in a different state and many of her customers were from her personal network. Many of them probably thought she was making a minimal amount of money from their orders because of their relationship with her.
She got 60% in most instances, so offering her half of that, or 30% seems to be appropriate on jobs like this one where she is not doing any work. Yesterday she told me that she is not pursuing looking for orders but if she gets a call from a customer then she will want to place that order to make that money.

[3Koi Maui]

Hi Jill,

It sounds like you've got a good plan in mind. In the discussion, it might be helpful to point out to your rep that at this point you are taking on all the risk of the projects. That is, if the order goes off track, it will be your costs to rectify or absorb. Also, on continued projects with a client, it was certainly the rep who made the initial contact, but it is your good work and communication that is keeping them coming back. Your rep could have brought in a client, but if they were unhappy with the result they would not re-order from you. Therefore you are now adding value to the relationship, and it's not entirely based on your rep.

As for associated clients - the parent who found out about you via the school - perhaps just the flat finders fee. After all, your rep did not make any efforts directly with the parent, in selling your company or services. The parent took the initiative to contact the school to find out who to use, and the school recommended you. In that instance, it's actually the school contact who brought you the parent as a client, and I'd be sure to send that person a gift.

[epicemb]

On these future orders where she wants to make the commission you should be sure that she knows what expectations you have of her - for a 50 or 60% split she should be actively involved in all aspects of the order - all you really should be doing is the "back office" functions. If she is not doing the bulk of this she is not really doing what is required of a commissioned sales person - in this case it would be more of a finders fee situation.

Jillkey said:

She got 60% in most instances, so offering her half of that, or 30% seems to be appropriate on jobs like this one where she is not doing any work. Yesterday she told me that she is not pursuing looking for orders but if she gets a call from a customer then she will want to place that order to make that money.

[LogoSteve]

Finders fee 5% to 10% of gross.

Steve