My bro in-law's new company sets up and/or hosts networks for companies and that kind of thing. They're starting to expand the operation, so he's got someone lined up to sell his product and the person is offering 15% commission as his entire compensation. This person would also be working out of his own office. Is this a good proposition for his company? Gracias.
It all depends on the scale of the project... 15% on a 10K install is completely different then 15% on a 500k install, and when the commission is delivered that plays a big role too. If he's doing it on full commission that can be a blessing for small companies, because theoretically that is no upfront our out of pocket expense... and it also encourages the salesmen to strive for more/better sales. However, he should speak to a lawyer before signing over 15% of anything to a salesman.
15% of what? Revenues or "profits"? Big difference. If it's 15% of profits you better make sure that the business's profit margin is >15%, LOL. Also you'd want to pin down exactly how you measure profit, or net income. That number can be manipulated like no other.
I'm guessing since it's for sales, it's simply for the sale this person makes. For example, if he lands an account for the company that the client will pay $1000 for their services, then he would receive a check for ~$150. I don't think the company's profits or revenues would have anything to do with a salesperson's commission, in this case
