Comments on: Sales rep problem

By: EvelynC547

EvelynC547 — Wed, 26 Sep 2007 19:38:40 +0000

A few months ago I found a site that sold industrial sewing machines that also sold them by showing examples of what you would need. For instance, they had a set up on the page, bottom left I believe, that showed what machinery was required to sew lingerie, then another set up to sew let’s say dresses and skirts maybe, then a set up to sew something else. They also sold these machines as a set offering a slight discount for purchasing them all. Do you have any idea where I saw this? I have been searching for three days now “google” and haven’t found it. I know I saw it because I wished that I’d have seen it before I bought the machines I did buy. I don’t know why I didn’t save it in my favorites but I don’t think I did for some reason.

Thanks,
Evelyn

By: Georgina

Georgina — Mon, 24 Sep 2007 14:55:52 +0000

Things like that are just the price of doing business. You have to budget for those occurances.

By: Marie-Christine

Marie-Christine — Mon, 24 Sep 2007 11:36:28 +0000

It’d be best to keep in mind that just because you’re not at fault someone won’t be going around bad-mouthing you . So don’t expect the rep to go singing your praises just because you behave correctly. In fact, they may badmouth you -more- because of a bad conscience.

That said, I tend to agree with Kathleen, if you have any doubt it’s best to behave the best way you know how and leave it at that. It’s good practice .. even if you don’t see an immediate return. You won’t have any potential legal worries, you can just let it slip right out of your mind, and that’s priceless.

By: katie

katie — Sun, 23 Sep 2007 09:30:17 +0000

hi,

We’ve had this problem too and it certainly is frustrating. On the flip side, though, most reps won’t hold you accountable for goods you cancel (ie, dropped styles)…do you have to compensate for styles you’ve cancelled? I wouldn’t want that.

By: Ann Krier

Ann Krier — Sun, 23 Sep 2007 01:25:39 +0000

As a form VP of Sales my little laws were:

1. ALWAYS confirm your orders whether rec’d from rep or directly from store with a written acknowledgement. (Even if it is stock stuff).

2. Require PO’s OR written acceptance of acknowledgements.

3. The Rep’s main job is supposed to find sales and find more sales. The factory/ manufacturer is supposed to make the product and do the paperwork.

4. All sales people stink at paper work. See 3.

5. see 1. and repeat.

By: Alison Cummins

Alison Cummins — Sat, 22 Sep 2007 14:23:55 +0000

If you were to make your rep pay for the goods, then he would have bought them and you’d need to give them to him.

Do you want that?

By: a

Sat, 22 Sep 2007 03:20:50 +0000

The first thought that popped into my head in reading your story is why you never made contact with the store shortly after the orders were placed to confirm it? Some store owners and some reps are shady. Many reps will write paper even when its not good. And some store owners are not honest people, see Retail Beef. My rule is to always, always confirm all orders right before things go into production, whether I wrote the order or my rep.

Ok to answer your question, I don’t feel you should deduct from the rep’s commission except for commissions not earned.

By: Rocio

Rocio — Fri, 21 Sep 2007 22:53:43 +0000

In general when it comes to “fuzzy areas” I think it’s best if you don’t give the other party any opportunities to bad mouth you… Not to say that you should tolerate those who blatantly try to take advantage, but if it’s not big enough to go to court, I think your reputation is more valuable.
Like Kathleen says, in this business is all about word of mouth…

We are in CA and used a great book: “Small Business Kit for Dummies”…
It was written by a California Business Lawyer, and it comes with a lot of templates…
When it came time to hire a lawyer to review and update our contracts, the book saved us a lot of money because there wasn’t too much for him to change

Best of luck and don’t sweat the small stuff!

By: MW

MW — Fri, 21 Sep 2007 21:34:32 +0000

can deduct the direct costs of the unnecessary excess production from the owed commissions and most likely, the rep isn’t going to fight it in any substantive way because it doesn’t amount to enough money to fight over in court [dollar figures were discussed privately]

Good issue! I would say play fair and square, if the contract doesn’t call for this type of deduction from commissions, don’t do it. I would also say being from a state with strict employment laws (California), if the rep wanted to do anything about it, it wouldn’t necessarily need to go to court to be litigated. In the state of California (not knowing where this person is but speaking of where I am), a simple call to the labor commissioner would cost the company more headache than they would want to deal with. This type of action is usually a violation of labor law in California, and could possibly be illegal in the state where the person does business. Additionally, if the rep is in a different state than the company, there is the potential added complexity of dual state laws.

I took the liberty of googling such info just to back up my point:

What are permissible deductions against commissions?

As stated above, commissions arise out of contract between the employer and the employee. The commission may be based on either gross sales figures or net sales figures.

However, under California law, the employer’s cost of doing business cannot be deducted from commissions or any other pay plan. For example, one California case holds that an employer cannot deduct damages to goods caused by the customer or returns of products that were credited to other employees. As with all other wages, California law prohibits deduction from commission for cash shortages, breakage, loss of equipment, and other business losses that may result from the employee’s negligence.

http://www.harriskaufman.com/californiacommissionswages.htm

(just a side rant– I find it necessary for most small businesses to either take a short course in basic employment or labor law or just get some type of education on the issue. Small businesses are likely to voilate many employment laws and get themselves into trouble through fines and other such penalties. I’m sure most people don’t think “does this voilate employment laws” when debating such issues. Even though sales reps are not necessarily “employees” they are, in most states, covered under employment/labor laws).

For the inventory, I would PROactively market it to existing accounts instead of REactively waiting for reorders. Companies would get rid of a lot of excess stock if they would just TRY to sell instead of just waiting for orders to trickle in.