I deserve a raise in the new commission-based pay structure.
January 1, 2015 10:45 PM   Subscribe

I earn the store where I work an extra $250,000 over and above the $1,000,000 in gross sales that any other salesperson has previously pulled off. I have accepted a low salary in the past for several different reasons, including shaky health and a related shaky belief in myself, but I have much improved health and much improved self confidence now. And the proof is in the pudding. Even while sick, I have kept business at a high level.

The store has opened a larger location, and we expect business to grow to several times its current level at the larger location. I will be responsible for the exceptional and positive experiences of well over half our customers and the revenue from the resulting sales. We will be hiring another salesperson, but that person will be to some degree inexperienced. There are capabilities that I have due to my abilities or education that this person may never have even if they are quite skilled.

I want to tie my level of expertise, my creativity, my abilities and my skills with people to the pay I get. I want my pay to grow as the business grows and be related to what I create for the business.

Management in the past has plainly taken advantage of the fact of my illness and my lack of confidence to get a really great deal out of me and I am sure that they would like that to continue.

I don't have a great opinion of management, but I can see that I would like this job a lot more if I were actually rewarded for my hard work. I would like to make a bid for higher pay and stay on, for the accessory benefits the job offers.

Management tends to throw tantrums at requests for raises, but actually never fires people. Usually just tries to devalue the work of the individual or lie about how much money is available. Yes, this job does have benefits, and the character of management may be shifting for the better.

I make less than $30,000 now, no benefits. I think I should be making at least $60,000 right now with benefits, or cash equivalent.

If the store is making $2,000,000 gross, I want to be making $110,000.

If the store is making $4,000,000 gross, I want to be making $220,000.

How do these numbers sound? I would like to paid on commission. Product has 50% margin. Requires a lot of formal knowledge and experience for sales. Average sale is about $80.

Can I reasonably request 10-15% commission? Previous management murmurings have been in the 3-5% range.

posted by Pablito to Work & Money (16 answers total) 1 user marked this as a favorite
What kind of packages are the competition offering? How are they structured? What kind of industry are they in? How does HR benchmark you in the industry?

Making the jump from $30k to $60k may be achievable, but $30k to >$100k will likely get laughed at a unrealistic. You will need to work with your management to develop a plan that gets you to where you want to be with clear expectations of the deliverables that very you there.

Is this the same job you've been asking about previously? If so, you will want to be careful about how you approach this. Using the conversation to vent will not be constructive. Do your research and go in with a plan.
posted by arcticseal at 11:01 PM on January 1, 2015 [4 favorites]

I think what's reasonable depends a lot on your local job market, and in particular how much it might cost the company to replace you with someone who performs at a similar level, and how much you could earn working somewhere else. It does sound like you are seriously underpaid, but you will have to work against the inertia of your current contract, which could be tough.

Are you prepared to walk, if they say no? You might have to make that threat in order to be taken seriously, but then they might choose to let you go. I wouldn't start such a conversation without planning for this as a possibility.
posted by PercussivePaul at 12:04 AM on January 2, 2015 [5 favorites]

Don't you have a competitor nearby? Get a job with a commission, and quit waiting for these bozos to reward your hustle.
posted by oceanjesse at 12:16 AM on January 2, 2015 [25 favorites]

I think oceanjesse's right, you'd do better somewhere else. Maybe look at this negotiation as a way of putting another feather in your cap (shooting for the 5% commission / a bump in salary) before making your real move, and spend the time in between researching and networking.
posted by cotton dress sock at 12:59 AM on January 2, 2015 [1 favorite]

See what other companies in the area are offering. If Other Company is offering $60k/yr + benefits, then you can casually mention that to Your Company and see if they offer up the goods. A better way of doing this is to have a job offer in hand so that if you get laughed at, you won't have to suffer working somewhere where they'll laugh at you.
posted by Solomon at 2:15 AM on January 2, 2015 [1 favorite]

I don't know anything about sales work, but boy does your current deal sound unfair. I'd be upset enough if I were you that I'd likely be looking for other work rather than trying to get a little more blood from the stone of your current job.

If you are really solely responsible for generating $1.25 million in sales for the store, 50% of which is pure profit, your income being less than $30k should be effing illegal. This really reinforces my general low opinion of management types and what they feel people who do actual work should earn.

As others have said, aren't there any competitors in the area you could interview with? Or maybe you could go out entirely on your own in some way, using your skills to sell something for which you don't need a brick and mortar store or supporting corporate structure?
posted by mysterious_stranger at 3:32 AM on January 2, 2015

I asked a similar question ages ago, though not commission related, just general salary.

The best advice i got was something to the effect of "The correct answer(of what to ask for, and how to ask for it) is $0. Find a new job somewhere else".

I did ask, and came totally prepared with not only several good arguments but lots of data, examples, and even a couple leads on much-more-fairly compensated jobs they were excited to interview me for(although, not hard offers).

I did it because i liked working there. There wasn't a single coworker i disliked, i loved the flexibility, location, short commute, basically everything but the pay.

They pretty much laughed at me. They offered to pay for some training, but said they couldn't give me even a tiny raise because they couldn't pay me more than a senior manager and blablabla bullshit bullshit bullshit.

I really regret asking, i wish i just had freaking left. A raise is something you're given, or something you ask for if you're already making around the reasonable middle line for what you're doing and think you're performing good enough(or now have some seniority) to merit it. If your compensation is really that out of line with what the job should be paying, then they're obviously ok with fucking you and think you just don't know any better.

No place like that will ever give you a real raise. They either deserve to realize they're fucked and pay the next person what they deserve, or can keep trying to wrangle in suckers or desperate people who will spear fish the chum bucket for scraps.

Just move on.
posted by emptythought at 4:06 AM on January 2, 2015 [17 favorites]

Sales skills are transferable. If you can sell cars, you can sell software, or gazingus-pins, or widgets.

Start looking at sales jobs with significant training. Something like AT&T's Business Leadership Development Program.

Get into real estate or selling cars which is commission driven.

There's no way you're going to get a raise from $30,000 to $110,000. None. You can request that the pay structure change, in such a way that you're getting a commission on your sales, but as great as you are at your job, they'd rather hire two schmoes at $30K and hope for the best, than pay you $110,000 for a sure thing.

If they undervalue you this much, that enterprise is hopeless.

So rather than ask for more dough there, find out where else you can make good dough and get a job doing that.
posted by Ruthless Bunny at 6:01 AM on January 2, 2015 [12 favorites]

Get a job offer at a competitor that offers 60 grand. Give two weeks notice. Companies don't give raises unless they absolutely must, and most managers will assume they can replace all but the very best of the top performers, and get away with paying the replacements even less.

At least, that's how it works in my trade.
posted by starbreaker at 6:38 AM on January 2, 2015 [2 favorites]

You are the product. You can sell yourself at market value (or above!) to someone, although probably not this customer.
posted by IAmBroom at 6:43 AM on January 2, 2015

At your level of retail, management is rewarded for having low expenses, and the higher sales are either expected as a given or regarded as transitory while they shore up in preparation for lean times. Even more, management probably believes that increasing sales are due to something they did, not something you did. Plus, paying you more money would raise a heckuva lot more red flags to their own upper management than any declining or stagnant sales caused by your departure.
posted by deanc at 6:48 AM on January 2, 2015 [3 favorites]

It appears as if management thinks the product sells itself. They own the product. You are there in their minds and being paid as if you are just needed to do the paperwork on the sale.

If all the sales force is making around what you do and are booking a $1 million in sales and you have increased your book by 25% to $1.25 million, even if they paid you 10% commission on all business above the average $1 million, you would get $55,000. They are better off hiring two sales folks at $30k and get $2 million in sales than pay you $55k for $1.25 million. Sounds to me as if they view sales as not something the seller (you) are doing, but as a function of time and capacity.

If it were me, I would look for a different job at a company that pays a commission or in another industry that does.

If you want to stick around this company, I would ask for benefits to supplement my salary and/or a commission on everything sold above $1 million. Have a plan in case (when) they say no.
posted by 724A at 7:28 AM on January 2, 2015 [3 favorites]

I can't speak to your industry but I can speak to mine and a bit about commissions in general.

Are you sure that that 50% margin is correct or is that just the Contribution Margin? In other words of that $80 sale is the $40 cost just the cost of the product or does it include all other fixed costs of the business (salary, rent, insurance etc)

The reason I ask is this my business runs at about a 25% margin all in. When I get a sales person asking for 10-15% of gross commission this means they're essentially asking for half the profits of the business its a non-starter (3-5% margin is about industry standard for us). If you're running at a true 50% margin then a 10% commission may make more sense.

Second one part of your statement rings a bit optimistic. If the store goes from $2M in sales to $4M in sales its unlikely that your particular role in sales has doubled in scope (you are not closing twice as many sales). It doesn't make sense to tie your commission to the overall single store sales unless you're managing the whole store - however in these cases you're generally not closing sales directly. I'd get away from trying to tie your commission to whole store sales. This doesn't make sense.

I'm also assuming these are inbound sales (customers come to you, you don't have to go get customers). Inbound sales commissions generally run under outbound sales commissions. If you're just closing sales you're more replaceable.
posted by bitdamaged at 9:49 AM on January 2, 2015 [1 favorite]

Nthing everyone else. Find a new job. And while you're at it, start selling less (they think you're just there to tie up loose ends, not actively selling their products/services, so they can't blame you for lack of sales).
posted by Brian Puccio at 11:45 AM on January 2, 2015 [1 favorite]

As prelude to finding new job, find out what competition is paying. This could be as easy as swinging by a competitor's store and asking. You can always say you just had a terrific quarter of sales and were doing a little personal survey to see how people are typically comped. Don't badmouth your employer of course, if anyone asks say how much you love working there, product is great, business is great, and bring it back around to how much you sold.
posted by fingersandtoes at 2:43 PM on January 2, 2015

Yeah. Get out.

Comp plans for sales people motivate behavior. If they aren't going to motivate you to make as much damned money as you can, they clearly don't understand the value of good sales people.

Make more money elsewhere.
posted by Thistledown at 7:03 AM on January 3, 2015

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