Commissioned Sales [RE-wrenches]

[Keith Cronin]

Hello 

 

Do any of you have a commission structure in place or some kind of concept
for compensating a sales person?

 

Lets say it is a 2kW system @ $9watt installed (DC) = $18k. Do you offer a
5% commission on the sale, or after all of the work is done, 10% of the
profit?

 

Do you just consider the materials, OH and profit, and back out the install
costs?

 

Example: modules $4.50/watt; inverter & disco's $1.25/watt, racking,
mounting, conduit & wiring $1.25/watt, labor $1/watt  OH, Profit, Permit
fees $1/watt = $9/watt installed.(these are all raw, round numbers.for
illustrative purposes only..individual results may vary)

 

So, the sales person could get a percentage of the dollar a watt, profit,
and tie it to some performance goals.

 

I realize this is an over generalization of things, but the industry seems
to always sculpt things in cost per watt.

 

Would you consider a small base salary, and a commission on the sale and or
profit of the sale?

 

I am inclined to make the commission a percentage of the profit, to ensure
the steps are followed- i.e., they do a complete site analysis, materials
takeoff, ordering, meeting the install team, coddle the client thru the
install, and pickup the last check.

 

For the larger residential systems- like 5kW, this can be either slid down
on the percentage of commission, or keep it there, so as long as the sales
person does not make more profit than the company.

 

On the commercial side, this formula could also work, but you would need to
get real clear on managing the expectations.

 

There are perhaps a bunch of ways to achieve this, and I imagine some folks
in California have a much better history with this.

 

Lastly, has anyone considered paying for an install, by the watt? Install a
5kW system- give the techs .50/watt to install it, and how ever long it
took, was up to them. It would incentivise them to not stroke the clock, yet
they would be needed to be monitored for quality assurance. This would help
with cost over runs, and allow them more $ if they perform.

 

Thoughts?

 

Thanks

 

 

Keith Cronin

President

Island Energy Solutions Inc.

Electrical Lic. C-25221

270 Kuulei Rd. Suite 106

Kailua, HI 96734

808-262-3268 Tel

808-263-0338 Fax

kcronin at islandenergy.net 

www.islandenergy.net 

 


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