Best and Worst Roofing Sales Structures : SVG U VS Roofing School
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- Опубліковано 21 чер 2021
- Best and Worst Roofing Sales Commissions Structures
Roofing Sales can be complicated. But if you pay too much you might hurt your business. What is the best sales structure? Like if you found this video helpfull .
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I actually have a base pay employee with 10% of the net profit after 15% is taken out from the top.
I have goal marks. 600k in sales = 4K incentive, 800k = 8k 1Mil= 24 k in incentives.
In between I have inspections and estimates incentives.
Employee will average at the end of the year 10% from the top of total gross sale, and I am looking to have a health benefit program. All I am looking for is 5-10% net on a “self operated company” where people is glad to work everyday.
Did I mentioned this is not in a heavy storm economy?
Great Job Dimitri!
Keep been a pro, you are a PRO!!!, I can play videos all day long in front of my kids without you having bad words, that has a lot of weight!
(By the way, yes numbers do lie if you don’t “read the small fine print”)
Thank you for feedback! Glad you can play them in front of the kids!
You should definitely expand on this topic because each of these pay structures probably come with different expectations (or job description) for the “salesman” and the structure and commission percentage should reward accordingly.
I’d like to hear what you believe the expectations of the business owners and sales teams should be based on these pay structures or whichever one you truly believe is best.
We are making best sales commission structure video for roofing-school.com later this week sharing the best practices
Everything is relative. Some companies offer reps more in terms of support. Leads, project mgmt, supplementing, etc.
Also depends on brand/reputation of the company. An established company that markets well generally means more sales for the rep.
Startups can’t compete and scale offering 10-12% commissions. (They also do not have the overhead costs a larger company does.)
I represent a small company that doesn’t even have a website and does zero marketing. I am on a straight split with no overhead charges.
I generate all my own leads and pay all of my own expenses. So I’m taking risks as well. Not to mention dealing with cash flow issues.
Another key variable is what is expected of the sales rep. Does he have responsibilities other than selling?
I think it’s a stretch for anyone to arbitrarily decide what’s ‘fair’. It’s what the market decides. I’ve seen reps get pencil whipped on their jobs.
I’ve run/owned businesses before. So I understand managing for profit. My personal view is that 1099 sales reps are and should be treated as subcontractors. Just like installers, gutter guys, carpenters etc.
Remember: nothing happens until something is sold.
Thank you Dimitry for sharing so much valuable knowledge.
Classic Storm split has worked with our team for 17+ years. We have a LOT of guys/gals on the team for over 10-15 years and about 10 folks on the team since inception. We average 40,000,000 in annual sales. Average paid sales commission is 10-18%.
No one gets fired. We pay everyone to a fault. Yes there's always turn around in any sales industry so every year some of the rookies don't make it but the ones that do usually stay for 5 to 10+ years. We just pay what we promised to pay.
I've watched companies with all of these plans fail miserably. Thousands of them. It's way more than the commission pay category.
Classic split rarely would work out to 500k or 16%. It usually ends up at 12.5% to 13% in most markets outside of regions in the northeast coast or Florida. I don’t know why you would be fearful of transparency in books, nothing makes me happier then a salesman starting his own business and succeeding, his success-is just legacy testament about me. It seems your favorite is mediocre pay for midland effort as a trade for saleman time and effort, just like all middle class slave jobs. Ill stick with the split - attract and encourage excellence for big pay check to solve big problems
100% agreed. Splits with an honest company is amazing.
Great video! Really makes you think.
Thanks for sponsoring my white board for the video 😂😂😂
I am consistent in my dream works from now, totally focus and concentrate, disciple and all the time motivate 😊
Great,Great Video!!!
Thanks for the visit
We do a smaller percentage and then the salary and use ours sales guy as an employee and I feel we can invest more and also have sales guys do small errands if we have to
Thanks for sharing.
I worked for a large nationwide company that did the 10/50/50 and I know they inflate their material prices for the profit split, to be the average, when I know what they’re paying when buying such a large volume. They ended up suing me and threatening legal action when I left to start my own company. This was all done just to not pay me the Comission that I worked hard for and protect themselves from all their failures that they tried to put on me. Jobs not being fixed after reaching out to them and crew countless times, lawsuits with customers, etc.
You need to make project veritas style roofing videos!
Let’s make one together!
@@RoofingInsights3.0 I would do it.
Sounds like Mid Atlantic construction. They did the same to me and my family.
We at Guardian Home Improvements have been doing a profit split for about a decade, there are many pros and cons. Just prior to covid we had been working on an employee base salary, commission, all expenses paid, 401k , full health benefits program with a sliding scale profit split as the volume was larger for the year. We recently started to advertise for this structure, Hired our first rep and are getting started now..looking to inboard 5 more this year to work retail and insurance work that is in the area! I was really excited to see that you brought that model out as the future and sustainable growth model, Because although I am a risk taker, I have been a little concerned if this is a good idea 💡 !!!!! regardless of my feelings I have been forging the path forward!!! thanks for the content !
Thanks for sharing! Let us know how it goes!
Nice !!
Great video Dimitri. I agree on the splits and I didn't always but here is why. Illsell 2 million this year in GA door knocking and I'm a 10/50/50 guy. Other other reps sales are way below what they should be however because of the pay scale to them I think it hurts the incentives I should be getting paid. Don't get me wrong I'm grateful nobody should be mad 50/50 on 2 million . However I see a lot of flaws within our structures and systems as well.
Thanks for feedback. Those who can sell big volume want splits. Problem is: it’s not always sustainable for the business. Business have to be profitable too
Great video! Very informative! I've tried a couple different pay structure worst is the split (40%-50% profit) I was totally transparent however sales guys start questioning pricing on everything! We inventory everything except shingles....and they want my cost on everything we inventory in house....just get tired of it. Great video! As for SVG UNIVERSITY...I got involved and regret ever penny I spent...just a bunch of blowhards 👎
What would you recommend be the base pay and structure for incentives and benefits? My company sells about $1 million per year right now and we are really focusing on growth, but I can’t afford tons of benefits right now. How could I set up the base pay and bonuses based on sales?
I can see the good in both but in a matching state 10% is the best in my feeling. This is how to get sales guys to indemnify the home owner to prestorm condition. Also 10% as an employee not 1099.
I started March 03 2023 brand new to the Industry Wichita ks in 3 weeks I had an 80-90% close rate and averaged 1 sale every 10-15 doors knocked without having a hail storm and using a year old date of loss, the month of April I did 300k for the business I am owed 50k and was terminated without having been payed a single commission with all the inspection and contingency money being taken out of commission I have not even seen, this business is doing the exact same thing you just spoke about, my man my jaw dropped as I was writing this but this is spot on and KDOL is getting an AI wrote claim wage tomorrow
Can you make a video explaining how exactly to do the Employee system?
If you hire an independent salesman what kind of insurance is it required for him to carry in MN? Or does he/she need to open an LLC if you tax them as 1099? Thanks
Been doing 30-40k a month commissions with the split method here in Florida at just 22 years old. It’s honestly great because I am good friends with the owner and everyone is making good money in the office! We focus mainly on profitability. The way it works:
20% lead cost taken from sale, then split profit 50/50
20% lead cost taken from the sale?? If you are making $30-40k per month after that you must be selling $5MM a year! Tell me more
@@RoofingInsights3.0 yes lol! doing about 300-400k a month in revenue average. Definitely along that ballpark. I don’t mind doing the 20% lead cost. Could it be less somewhere else? maybe. But I don’t find my leads we do massive online marketing, great culture and only work like 15 hours a week going on 1-3 appts a day.
Damn, what company? 👍😆
Im in commission only but i can see all my companies profits... yea i want to start my own business...
What kind of a base pay ate they paying to start?
I have a question that is off topic!
I'm working a storm in Iowa and having trouble with the adjusters. 1st off the home is valued around $350,000 to $400,000 they live on a culdesac all 5 homes around them have had roof and siding replacement, this customer had the roof replaced but they will not buy the siding that has damage. The damage is one wall on the north side and a few pieces on the back of the home. after the 2nd adjuster came out he said he would replace the 1 wall and 3 pieces, the home owner refused because of bleaching on the current siding, according to Iowa it does not have to match because they claim that as long as it's uniform that's all they need to replace. After the 3rd adjuster came out he denied the other adjusters assessment of the damage and refused to replace anything. Time has run out according the the adjusters and this case is closed! Does the home owner have any other options?
what city is it?
@@michaelmesicek2235
Cedar Rapids
Numbers don’t lie. Answers is in net profit margins. industry average is 8-12%. Storm chasers with split profit structure have the lowest, more like 5%, so they are forced to screw their sales guys to support their lifestyle. Best of the best will have 20% plus net. And usually will have sales guys as employees.
I have 2 roofing offers, one company offers 10% commision on sales and the other is the classic 50/50 storm split. As an employee what job should i take?
10% will be better for jobs up to $20k, market depending. After that, split is better
Old Tin Men used a Par System....Salespeople got 10% at Par & split 50-50 anything over Par....good system because Profit isn't a Dirty Word.
Profit isn’t a dirty word. But business should be more profitable than sales guys 🤷♂️
The core problem is greed. And there’s plenty of blame to go around.
Insurance carriers are greedy. Contracting company owners can be greedy. Sales guys can be greedy.
And let’s not forget greedy homeowners. Many want their deductibles waived. And even expect to profit from their claims.
All that said, in an industry with 30-40 percent gross margins, achieving a 10 net profit is doing very well.
Plenty of industries carry much lower net profit margins.
Hey kind of off topic but what is the minimum a company should charge for a small repair?
$250
@@BuddyQualityFirst thank you
At the end of your presentation regarding commission base sales you said companies tend to get in trouble because they 1099 their sales guys. Why would a company get in trouble for that?
Because in some states , Texas for example, once you give salesman shirts, business cards, hold meetings, etc...
They are classified as W2 employees according to Texas Workforce Commision. They way you get audited is if a salesman files for unemployment or reports you. Then they fine you and make you pay back taxes on salesman thay are not taken out as 1099.
unemployment tax and social security tax.
After thay they have you pay a quaterly employess taxes. Then the fun really begins when they report you to the IRS.
@@joecavazos2885 Same in NY. They still have to be guaranteed min wage even if they don't sell.
@@joecavazos2885 That is correct Joe. Plus, the W2 and a 1099 are IRS forms that are subject to different taxation rates. In order for a business to 1099 someone, that person/s being 1099'ed must legally operate as an independent contractor having a DBA or an incorporated business. So, Dmitry and you are right that a company can get in trouble for 1099'ing anyone doing work and generating revenue for a company when that person generating revenue (i.e.: sales person) is not a truly independent contractor.
15 percent is crazy!!! I should close my business and become a sales guy. I think 7-10 is fair.
Splitting profit 50|50 is crazy!
@@RoofingInsights3.0 agreed but 15 percent is way to high!
I don't like your #1 pick. It doesn't work I it is a small business. I can't stand that we live in a world that everyone gets a trophy! If you are a sales guy you need to sell to survive. The idea of paying someone to perhaps not be a good salesman is crazy! Model 1 is the only way to go in my opinion.
Great Video!
@@shaneMcguire1981 well, 15% is fair for self generating leads, you save 5% on marketing cost.
As business owners we also have to think about people who work for us. Small salary and tons of incentives is my #1 pick. Sales reps have bills too. But if they have ambitions goals they have to sell a lot to earn really good living
I like your shirt
I like your channel. Let’s collaborate. Text me 612-558-4881, Dmitry
@@RoofingInsights3.0 I'd love to collaborate! Its kind of my thing.
I was just a part of a roofing company who offered a profit split where they offered me 35% of the job, comparing it to a 12% of total job sales position. They then refused to give me access to the breakdowns for the job, closed my email account while owing me a lot of money, and stopped all communication. This is a SCAM.
Welcome to the roofing industry! Exactly what we talked about!
Imo I would document every sale and transaction you make and save enough money to sue them.
You can also have them audited in a lawsuit if you don't have exact numbers.
So what happens when your sales guy bring. You a bad job and you can’t even cover their commission? Or something like that
Mistakes will happen. Train them so they don’t make those mistakes. You control the prices, training etc. how many mistakes can one rep take before he learns? Real question not in their mistakes but can we train them to measure, estimate, and make them accountable?
We audit every contract that comes in. Some are approved some are not. Create the culture that salesman know jobs that are not profitable will be denied.
D cuff
Learn from the best, not from the loudest. Look at not what they teach, look at their track record.
Best and Worst Roofing Sales Structures : Profit splits, Commissions, Salary
Splits are the worst sales structure for the roofing industry. If you don’t believe me, look at track record of companies who pays on split profit base, don’t listen to the gurus who are teaching them, look at what it has done to them and their businesses in the past.
Many don’t have businesses anymore, because among other things it has created absolute mess, but today it is still very popular despite all the disputes associated with split profit systems.
The best and the most profitable companies we have visited this year are using different sales structure, employing and taking care of their sales reps in a completely different ways!
Learn from the best, not from the loudest.
We have a different compensation plan then all of those. And all our employees are w2
Sorry im not generating $1’000’000 profit to someone for $100k. Being a sales person is a business in itself when you have a sales team you manage and develop. The books for you brick house business should be different then whats generated by a sales team because thats business you did absolutely nothing to receive. I’m tired of business owners that feel slaving your life away is fine for 100k, like if you being a millionaire through the relationship is some kind of problem. Dont use your sales reps to cover your brick house failure.
Im in the hvac and security industry, hvac business owner gets 8% of anything in the profit margin. He provides the techs and equipment and its more money then he’s ever seen in his life. Security gets paid by multiples depending on credit qualifications of client and monthly recurring fee. For example 725 credit 63.99 monthly, 63.99 monthly x 29(the highest multiple)= $1855 minus the equipment gifted to the client minus a 10% reserve generally resulting in $1-1200 up front pay from one client. And trust security is much easier to sell then a roof. You cant expect your business to be carried by sales reps, make your brand and put yourself in a position where sales reps is supplemental to your business, not your business.
You will not generate $1M profit for $100k
If you generate $1M in sales in roofing business, they will make $100k in net profit. You will make $100k in commissions. If you take more, or promised more something is off.
abc rules
3 million in revenue for a 150k salary!? How is that fair? That’s straight robbery. How about you take 150k as a salary and donate the rest to charity because like you said it’s “good” money. Business owners double dip, they earn equity on the business growing plus the salary they make. Sales should be a meritocracy; you earn based on the value you bring to the business.