"I Just Get Paid Commission"

At that price, it probably has its own car seat.

Yes, very pertinent.

I put up with similar complaints for 35 years from my reps.

When I sold vacuum cleaners, one rep found out what I paid for the vacuums we sold. He brought it up in a sales meeting, with all 8 reps there.

Him; "I found an invoice that says you only pay $450 for a machine we sell for $1,589. And you only pay us $400 commission. Is that fair? You should pay us more. And if you don't pay us more, I'm leaving".

I knew the whole group was now ruined. Not because I couldn't sell the idea of why we paid what we paid. But because, to the group, they were now selling a $450 vacuum cleaner for $1,600...not a $1,600 vacuum cleaner. That's a huge difference in perception.

But, I said "Yup. That's what we pay. And in our industry, that's about average. And what we charge is about average. And what we pay you is slightly above average. But now you (his name was Steve) leave me in a precarious position. You have decided to try to extort more money out of me, and you are doing it in front of everyone. You will never have to worry about me profiting from you again, because you no longer work here. Goodbye"

And to the rest of the group (after a few minutes of Steve stomping around yelling obscenities, and walking out) I explained the breakdown of overhead, cost of goods, gift costs, finance fees, overhead, support employees costs.....they got it.

I even explained that the actual cost of manufacturing was about $150. But that was also about normal for manufacturing, and it never bothered me. Although it did bother a few other distributors who also had an employees mentality.

And the trick was, I let them do the math. I refused to position it as anything other than "Normal for our business".

Employees see it as "They are paying you" rather than "You are paying them".
And to them, and money you make is their money, that they have to give up.

A side story about Steve; At the time he was a good rep. There were actually weeks, where he made more money than I did. With bonuses, he might make $2,000 or more for a week. If he made most of the sales (it happened occasionally), after overhead, I might not make anything except on my own sales. Steve was actually getting paid far more than most of the other guys, because his production was so high. But I still couldn't keep him, he had poisoned the well.

Months later, he came back .....apologized...became a distributor for me, and did quite well for several years. I was really proud of him.

But for the entire 35 years with a crew of salespeople, they were constantly complaining about not getting paid on sales to people they knew, or getting paid on credit turn downs, or if two of them went on a presentation, who made more.......

How much trade-in were worth was a real problem for some.

I learned to tell l them ahead of time what they would get, and give them the option to not accept it.

Eventually, most learned that I was going to treat them as fairly as I could. Any question they had would be brought up at the sales meeting, by me, and answered in full.

For a short time, I worked out of an office in Pennsylvania. They had a secretary that was very anti-sales. They were actually afraid of firing her.

One day, an appointment I had cancelled. So, in front of the distributor and the secretary, I said, "That appointment didn't work out. But I was willing to go on the appointment, and I know they would have bought from me. So, I think I should get paid for the sale anyway".

It was a joke. My friend (the distributor) laughed. The secretary said, in completely seriousness.."Absolutely, he should get paid!".

And then I had to spend the next few minutes, trying to explain to her that that's not really how it works. It was a stupid joke on my part. And it could have caused a major problem for my friend. But it sure made for laughs when we met with other distributors.

To me, "fairness" never enters into it. I remember having to borrow money to make payroll..many times. Thank goodness this is a few decades ago. To me, my deal with my people was sacred. No matter how much, or how little I made, they got what was promised.

And I had a pretty open door policy about it. If they had a question about a check, I would explain it, and be fair. And if their was a gray area, I always went with what benefited them the most, and then made it part of the program.

But asking for more money that I agreed to pay? No.

And occasionally, someone would bring up the idea that they should get more, or that I somehow cheated them. I couldn't tolerate that. If it was a gray area (meaning it could go either way), I'd just pay them....because it was my fault that I wasn't clear.

But suggesting that I cheated them? They had to go. There was no saving that rep.

At one meeting , I said something like "I'll tell you anything you want to know. And I'll never lie to you. But it will not ever change the deal I have with you. If it helps your understanding of the business, great, but it's not a negotiation, ever."

And I told them that I was one of them, That I was a salesperson first. I knew how they thought. And I knew how to treat them well. But I also knew that reps can get greedy, if they know that a dollar goes to someone else.

Most of the time, maybe 25 years, that I had reps, I was one of maybe 30 distributors in the US. Honestly, I made between $200,000-300,000 a year. But the average distributor made much more.

The factory rep would say, "Claude, you could have a million dollars a year. I know you could" And he was right, of course. But it would have been a different business.

My wife was the book keeper, I had a sales manager, a telemarketer/appointment setter, and I did the hiring, training, field training, financing, and also sold in the field. And we always had between 6-8 reps. A perfect fit for my business.

I wanted to make sure the reps that had the aptitude made a really good living. So, I gave them lots of attention. And it was fun, even the bad parts. I was comfortable.
A business making three times the sales would have been very possible, but not as much fun. And at my core, I'm a salesman, not a business manager.

A close personal friend of mine was in the exact same situation - we were bringing in millions per month to his company. They were stingy. He left, taking the millions with him LOL.

It does. And it doesn't. It's how you deal with it.

It's a not an unreasonable request, in that situation... You, the super star loan officer always deal with one person, so things (information exchange) happens faster, you end up closing more loans...

And, you definitely have to pay extra attention to one like the one I'm talking about. Not only did he take himself and his $135k gross monthly, he opened his own outfit, a few blocks away, and took away from their business.

And, as I said, instead of distributing loan applications to the 4 or 5 processors they had on staff, they could just have sent them to one of them, loan officer would have been satisfied (for a few months or year).

They did not try anything.

Once upon a time, I used to work for a regional bank... They were not keen on paying people more... but had no issue on calling people assistant vice president and vice president... Kept people working for them for less than they'd get if they moved across the street for years... sometimes for years and years and years.

Also, this was a family-owned brokerage... Daddy was the president, Mommy the SR Vice President, Oldest Son the CEO, Younger Son CFO, daughter was Marketing and Business Development Department.

They're still in business, doing about 40% of what they used to do. The loan officer still has his own company, doing about 60% of what he used to do and he's got a handful of loan officers working for him...

It worked out better for him than for them... and it could have worked better for them with a bit of flexibility in thinking...

Hey, they could have said, nyet to the assistant but offered him something else his ego craved... They didn't bother.

I'd have at least tried to change his title to Sr. Loan Officer.

Anyway, you're right about the Pandora Box opening, but there were better ways then losing your star loan officer within 1 week of him requesting something.