Salary Negotiations

I just got offered a sales position with a local company. The current offer at hand is:

Base: 25k plus 5% commission
Benefits: Partially paid by company (I would be paying around $100 a month). Other benefits volunary
Gas: Paid ($40 a month)
Cell Phone: $32.50 a month

10 days paid vacation
5 sick days

Now, at this point, my current job pays more, but its a dead end job and I don't know how many more years the company will be in business.

I would like to negotiate for a higher salary, higher commission rater, and more vacation time. Are there any HR professionals on the forum that would have any advice as to how to go about doing this? Keep in mind that the company doing the hiring is not the company that I will be working for, but their parent company.

 

I am not in H.R., but a manger none the less. If it were me I would negotiate a higher commission %. From a business standpoint, the company has nothing to lose and everything to gain by you having more incentive to sell more.

 

I was actually at work when they called with the offer, so I couldn't talk too much. I plan on calling back and having them send me the terms of the hiring in writing, and take the negotiations from there. What is a reasonable commission rate to ask for in sales?

 

What newbtacoma said, and at least aim for parity with your current pay.

 

So when they send me the position terms in writing, should I counter with my terms in writing, or call them? I would rather set up a meeting but being that the parent company is doing the hiring, they aren't located in the same state.

 

As a manager I can tell you this. You only get one shot to negotiate. After that you are locked in and are stuck with cost of living or whatever the company does for incentive raises each year. I do not know a lot about sales but 25K seems like a really low base for a career based position. Also, the economy is still not to great right now so sales are probably still low across most industries so if your sales are low then it does not matter if you get 5 or 10% because 5 or 10% of 0 is still 0. If I were you then I would suggest getting a higher base unless it is sales for porn (economy agnostic seller).

 

I am not sure what your selling. But let me give you some of my thoughts. Background, I run a sales staff of 40 people that sell about 60 Mil a year. So I do a lot of hiring and firing, and designing of comp plans.

25K base and 5% commish. 5% on what profit? Revenue? If it is on revenue what is average sale $? If it is $100 sale, you get $5 everytime you sell something. Not that great in my opinion unless you are selling something that sells very easily. If it is a $100,000 product and you get 5% of that revenue, that changes things because you would be looking at $5000.

If you were being offered 25K base to sell $100,000 products, no offense but they are on the way cheap to find good talent. Good salesmen that are capable of selling 100K products or services are in high demand and will fetch a base of twice to 4 x that amount.

Benefits are pretty standard.
Gas: $40, that doesnt fill a tank, I dont get what the gas money is for. Most company pay on miles, or just give you a gas card with limits.
Cell phone: $32.50 a month, does that pay even a pay as you go cell plan? Not sure if this is just a partial payment for your current phone or what?

Vacations are usually not negotiable. Most companies are set in stone on vacation days, and unless you gain tenure are not negotiable. Remember in sales if you are not there then you are making no money. The one downside to lower level sales is time off costs you money.

Hope this helps some, by knowing what your selling I could be a little more detailed to what I think of the comp plan.

 

I will be selling ad space in a local "high society" newspaper. Its a subscription only paper, with a readership of approx 8,000. Not sure of monthly sales goals, but there are incentives to reach $20k in sales each month. Commission will be paid on total ad dollars.

I agree that the gas and cell reimbursement seems low. You're right, I only have one shot to negotiate. I feel the current offer is really underselling my ability, but I want to counter without over-doing it and having the offer pulled completely. I feel I might have the upper hand in the negotiating process as of now, simply by how well my interviews went, as well as the fact that I'm unsure of how many able personnel applied for the position.

 

Wow, only 8000 readers. That is a small population to try and sell ads for. If you are the only sales guy which I figure you will not be then if you outstanding at your job and hit your mark you are looking at $1,000 more a month in your pocket or $12,000 more a year. That is $37,000 annually and honestly..... how can you even live on that?

 

Take current job pay + 8-10% for new job..plus opportunities.

Tell them your at ### and would like #= (10-12% more) ..all in. then settle for that 8% more for the win.

Where is the incentive to leave your old job. They must like you to give you and offer..go really high or find out the range offered.

37k at your age in a little KY town is probably pretty good.

Now CA towns different story...let them reap their 10%+ unemployement cause of the job and housing crisis they created..you should like your in a stable local economy.

 

I agree on a revenue based goal it is going to be hard to make real commission money. $20,000 a month in ad sales is quite a bit, and will take you a while to generate unless you are given a somewhat stable client base already. Actually that is a good question to ask them if you are going to be given any accounts or if you have to start from scratch.

I see you live outside Louisville so there should be a good target list of prospects which is encouraging.

Do you have sales experience? If you do have successful sales experience I think you can do better. If you don't this might be a good steeping stone. To get a better sales job you have to have success in your previous one. Success in ad based sales looks real good for future employers. Mainly because it is tough, and the economy has not helped lately. I have interviewed numerous ad sales people from both print and electronic media lately, and all of them tell me how tough the market is, and Kansas City has not been hit nearly as hard as a lot of other areas of the country.

 

Living expenses in Louisville aren't nearly as astronomical as those in California. Being a recent college grad, I would happily take a $37k a year job.

I'm not so sure that the readership of the magazine would be a hard sell, as companies in Louisville would love to have the readers of this paper as their customer, simply because as I said before they are the high society type who have money.

 

Good point, I will ask if any accounts or leads will be given. I do know that the lady that interviewed me on my 2nd interview was literally retiring that day. She told me herself that she had 200 active accounts, so I wonder how her accounts will be divied up.

I did request they send me the terms of the position in writing. Below is what they sent.

"In summary, the base pay starts at $25,000 per year for the 1st 90 days. Payroll is done on a biweekly schedule and along with the base salary, you would receive commission on any of the ads that you sold that ran in the 2 publications within that pay period. Also, included in your net pay would be $40 per week as a gas allowance and if you submit your cell phone bill, the company will reimburse $32.50 per month towards that. You would be eligible to participate in the health benefits 90 days from your date of hire (the employer pays a portion of this along with an employee contribution) and all other voluntary benefits (dental, GTL, LTD, STD, Accident and Cancer) the 1st of the month following 90 days (only the employee pays for these). There is a 401(k) plan you can participate in effective on your date of hire. Currently there is not an employer match but there may be a discretionary contribution. You get 10 days vacation time per year and 5 sick days per year."

 

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FWIW ... the chance of you retiring from either your present position or this position is probably nil from what you have explained.

If you show excellent work ethic and are an excellent worker ... take the job (probably the new one) that will put your face in front of as many people and companies as possible to show your skills and dedication.

Work your azz off and be honest and another person and/or company will notice and grab you from this job exposure.

If you can afford it ... do NOT try to get rich in this job ... but try to position yourself for the next step in your real career.

PS .. Don't quibble with them on vacation days ... work some of your days off and show them your dedication.

PPS .. I grew up in a small town not too far from you and after the military I worked my way out and did very well for myself.
I was single then and it was easy for me to relocate.

.

 

yikes 25K base... time to move out of kentucky

 

I like this approach. However, I still wouldn't accept the position without negotiating base pay and commission. Just not sure where to start. I have sales experience, but not commission based experience. If it makes a difference I have a bachelors in marketing and management.

 

You should negotiate for what you think you are worth. There's no sense in leaving a job (even a dead end job) for another one that's going to pay you the same or less. There's no guarantee the new job will be around for ever, so you might end up going over there, finding out you don't like it and be in the same situation.

 

Agree 100%. Great advice.

With your education you are worth more than 25 base and 5%. Not sure where this company has the limit set at, but I would suspect in Louisville area there are better paying sales jobs, lots of them. I looked on Monster under sales in your area and there were 138 jobs. I would keep looking. Look into freight brokerage sales, if you are aggressive and truly want to get into sales, you can make a lot of money and start a great career. If you need more info on freight brokerage feel free to pm me I can send you in the right direction.

 

Thanks, I'll look into that.

I think I'll counter with a base range. I'm thinking 31k-35k for base, plus 8.5% commission. Is that unreasonable? If they match my salary now, the added commission would be the incentive to leave my current employer.

 

31 is about a 25% increase, and 35 is almost 40%, I don't see them doing either with an original offer of 25k.

Also in negotiating the commission you don't know what it is based off of, or did I miss that part? In the post where they outlined the compensation structure they just mentioned commissions being paid not how it is structures, get this in writing.