Sales Reps

launching my new company next week and have a few people that would like to sell my product. I have no idea what percentage to pay them. My product is selling for $34.95 and my costs are about $5.00. I am donating $3.00 per product to charities . I am paying the reps by a 1099. I want it to be profitable for my company, but want the reps to sell also. do you have any suggestions?

Hi Susan -

The standard for paying reps is no less than 5% and usually not higher than 10% although I know reps that earn as much as 15% for very low cost items that sell for a few dollars. Mark is correct in that the price point that the item sells at can somewhat dictate when you should pay reps but this is also about "supply and demand." If you need help to sell your product since you do not have a brand name and no current distribution you may have to offer a higher percentage (10%) to entice reps to want to sell for you. If you have current sales into retail chains and reps see your are already successful you can offer them less (closer to 5%) so a lot has to do with this. I personally have friends who won't work for less then 10% and I have never worked for less than 5%. 5% is kind of on the low side if the retail price point is less than 100 dollars and if the product sells for more than it is ok to offer a lower percentage. I hope this helps!!!

Jim