Question about commission plans

Hello,

My partner and I have a costume jewelry import
business. Most of our goods are imported from South
America into the USA. For the last several months, we
have employed an individual based in S. America who
handles the export logisitics of the product out of
the country, manages the artists who supply the goods,
and helps to scout for new products. We currently pay
her a flat rate every month for her work, however, we
are entertaining moving her to a more commission based
pay structure.

We're wondering if anyone has experience in paying
commissions based upon margins. We would like to
incent her to negotiate the best prices on new goods.
We've considered paying a flat percentage rate on the
orders we bring in, however, my partner and I are
doing most of the selling directly to the chain
merchant who is our main customer here in the USA...so
it really doesn't make sense to pay her on sales of
the products we already have in distribution. However,
we are of course always searching for the best new
designs and feel that she should be compensated for
helping us meet our margin requirements and those of
our buyer. Any thoughts on how we can go about doing
this? How much information should we feel safe
divulging to her about our margin?

We appreciate any feedback from John and the group.

Thanks,
Marilee

Marilee Bear

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