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Thread: Commission-based sales question

  1. #1
    Join Date
    Dec 2003
    Location
    San Francisco
    Posts
    11

    Question Commission-based sales question

    ProBrewer community,

    I have heard from several brewers that they have paid sales people on a success-based commission-only basis.

    If anyone has insight on this - particularly how the payment is structured - I would appreciate it. (ie, Is it a fixed fee per store/club/bar? What $ amount is paid for a successful introduction? What problems, disputes, etc. may arise from this type of sales?)

    Separately, I would be interested to know if there are many people with beer sales experience out there, or are such people a scarce commodity?

    Thank you.
    Jim

  2. #2
    Join Date
    Jul 2004
    Posts
    1
    the way our commission is set is simple. you get paid a percentage of the gross dollars you generate through sales. minus promotional discounts , breakage , and out-of-date product.

  3. #3
    Join Date
    Mar 2003
    Location
    Gorham, Maine
    Posts
    69

    Sales Reps

    We have a unique situation and a unique salesman. We are a small brewpub chain and only sell beer off premise in 1/2 and 1/6 bbls. The market is very competative being as micros only enjoy about 3.5% market share. Our sales rep started at $200/ wk for 2-8 hour days + mileage and is now at $250. The comission was based on $5 per new account -$5 for lost accounts and $5 per 1/2 bbl. equivilant over the previous year for that month. He gets a small merchandise budget @ $500/ QTR. and glasses and coasters.

    Result: 20% growth for 4 years. 15 to now 70 draft accounts. We are growing the brewery and will have bottled product. He will go to 4 days and work on $1 per 1/2 bbl. and $.35/ case shipped. He will get insurance as well. Kind of spendy but we are investing a lot on the new facility and I can only swing a couple days of sales every few weeks while managing the business, restaurants and brewery.

    Any feedback would be great. I'd like to hear other brewers situations.

  4. #4
    Join Date
    Oct 2003
    Location
    Pittsburgh, PA
    Posts
    407

    Sales compensation

    This is really useful to me, as I have only as rough idea how I'd like to structure it for my micro startup.

    My thought was to have it be 100% commision, with a one-time cash payment for the initial tap placement, and then a percentage of each keg that moved through this account. I hadn't thought through the merch. allotment or other allowances, but I did put some general funding in the budget for it.

    I'm assuming the examples cited here are for self-distributed products?

    Thanks,
    S

  5. #5
    Join Date
    Mar 2003
    Location
    Gorham, Maine
    Posts
    69

    Sales Reps

    We use a distributor locally and will pick one up for the rest of the state this Fall. A sales rep job is managing the the distributor's salemforce and keeping them abreast of new accounts and possible new handles. They still are just a delivery service but I can't deliver beer in my pick up anymore. That ended in 1999. To attract a good rep you have to pay and you need to set measurable sales goals in $$$ and barrels. Commission only is tough becase some months are better than others in a seasonal market. You also need to make sure that your rep knows the extent of your sales budget and that they realize where they fit into the whole picture. We do 5 Million in sales and only $65,000 of that are through distribution. So what gets the attention?! if I pay him $22,000 in salary that profit gets eaten up fast. We feel that our beer in the market helps promote our restaurants!

  6. #6
    Join Date
    Jan 2010
    Location
    Astoria, NY
    Posts
    174
    Here's a question: Do you guys pay commission on invoices created or invoices paid?

    We're finding we are laying out a large amount of money since we operate on paying commission on invoices created since many times accounts will pay over the 30 days period - it becomes especially painful when accounts close, are deadbeats etc.

    So we're considering moving to commission paid on invoices closed/paid. It will have the pitchforks and torches coming out from the sales guys but I don't know that the current situation is working especially when you consider A/R...

    What do you guys think?

  7. #7
    Join Date
    Mar 2003
    Location
    Gorham, Maine
    Posts
    69

    Old Data

    Hey There,

    Reviewing this thread, it is over 11 years old. Interestingly enough things have changed significantly over that amount of time.

    We are currently in 6 states with 2 reps and soon 3.

    We have adopted a new formula that we got from the Craft Brewers HR forum.

    Sales Commission Structure
    We establish monthly sales goals for each sales person at the beginning of the year. Each person is eligible for 5% of their quarterly base earning if the hit these qualifiers – 1) meet or exceed the quarterly sales target 2) stay on budget 3) can’t be on a disciplinary action at any time during the quarter. For Quarter’s 2, 3 & 4 if the person hits the qualifiers for the quarter and is ahead of sales targets ytd, then Q2 pays 7%, Q3 pays 9% and Q4 pays 11%. This way, if someone misses, say Q2 sales targets, they wouldn’t get a bonus for the quarter, but the still have a chance to make up the loses in future quarters and get a little something extra. If someone hits all quarters it averages 8% for the year.

    Hope that helps.
    Kai Adams
    Sebago Brewing Company
    www.sebagobrewing.com

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