A couple of questions regarding Rep firms and how they operate , in general what % commission do they make , when are they paid i.e when the manufacture ships etc and do they manage both direct and distribution channels ?
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How Are Manufacturer Rep Firms Paid?
U
Undisclosed #2
Mar 26, 2015Commissions usually vary from 4% to 10%, depending on volume of business. They are usually paid in the month following the order, since most stuff in this industry ships upon receipt of PO.
The normal arrangement is for them to get a flat commission on ALL sales into their territory. Direct, distribution, doesn't matter. There are some trends towards only paying on registered deals or things that the rep firm showed actual involvement on.
UI
Undisclosed Integrator #3
Mar 27, 2015Undisclosed A....the answer is all of the above and many more factors.
I won't discuss actual percentages of compensation, but more the items that have an effect on how much they get paid and when.
Every rep agreement is different based on the requirements and goals of the products and manufacturer. Some are paid a flat percentage commission and are responsible for any sales that happen in their geographic region. Whether they develop the sale or jut happen to be slotted for that territory. That's the simplisitic way and the only caveat is if they get paid upon boooking / receipt of order or payment from vendor.
From there, you have variations of:
1. Did the sale originate from a Distribution Partner or Direct Customer (if supported)
2. Was the sale forecast, or did it just appear?
3. Did the lead come from a Program or "sale" that required discounts?
4. Was the sale at margin or did it get discounted?
5. Are you breaking ground or growing an existing territory? (Mining or Exploring)
Then we start talking about bonuses:
1. On target for quota?
2. Exceeding goals set for a "kicker"
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