Question about commission plans

Re: [spiers] Question about commission plans

Marilee,

How about you simply pay her a buyers commission of say 6% of all you buy
through her, and let
her realize the better the prices, the more you buy, the more she makes. No
need to give her
internal data.

Also, the better the product matches USA specs, the more it sells, which incents
her to work hard
on this important aspect.

Finally, a buyer's commission is not dutiable, but a sellers commission is... it
sounds like this
arrangement meets the non-dutiable test, but you may want to run it past your
customsbroker for
confirmation.

John
On Tue, 23 May 2006 14:27:26 -0700 (PDT), Marilee Bear Rhodes

wrote :

> 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

Bookmark this post --- Email this post