Question about Sales?

[jungeon]

For those of you in sales jobs with commission from sales on the high end I have a question. What happens if you sign a major contract with a company, and that company has an agreement to pay lets say 1 million for whatever you just sold but then they end up not paying (say they went broke or something). Do you still get your commission or does the company ask for it back, or do you not get it in the first place?

Because I remember that my ca friend was telling me that many companies recognize sales from when the other company agrees to pay not when they get the cash.

[TodayHello]

For those of you in sales jobs with commission from sales on the high end I have a question. What happens if you sign a major contract with a company, and that company has an agreement to pay lets say 1 million for whatever you just sold but then they end up not paying (say they went broke or something). Do you still get your commission or does the company ask for it back, or do you not get it in the first place?

Because I remember that my ca friend was telling me that many companies recognize sales from when the other company agrees to pay not when they get the cash.

The product of a self-proclaimed top-tier business school.

[jungeon]

The product of a self-proclaimed top-tier business school.

Thanks you for answering the question.

[TodayHello]

Thanks you for answering the question.

Don't thank me, thank your overpriced nonexistent top-tier education and fictional employers who have failed to impart upon you a basic understanding of commission sales or the complexities of using Google.

[CatDog]

The commission may be only paid out on delivery of product/service.

I'm sure things are different at each company, but I doubt it would be as easy to enter in a million dollar contract, get a 100k bonus, and then have the deal fall through. People would make illegitimate deals over and over until the company is bankrupt.

[jungeon]

Don't thank me, thank your overpriced nonexistent top-tier education and fictional employers who have failed to impart upon you a basic understanding of commission sales or the complexities of using Google.

Never having done I sales job how would one possibly know? I don't know sales people, this information is not on the net or in the textbooks, almost no one from schulich goes into sales careers and they are generallly looked down upon for low pay and job insecurity. I don't even think there is a course in sales at the undergrad level or grad level.

[jungeon]

The commission may be only paid out on delivery of product/service.

I'm sure things are different at each company, but I doubt it would be as easy to enter in a million dollar contract, get a 100k bonus, and then have the deal fall through. People would make illegitimate deals over and over until the company is bankrupt.

But what if its not the salesman fault, isn't it punishing him for something beyond his control.

[nalababe]

Many companies will bonus based on shipment, but:

1) unless there is a credit approval (based on what you are saying they likely wouldn't have) payment would have to be made
2) if the deal goes sour, product is returned, they cannot pay, 99% of the time you will have to return the bonus...this happens all the time.
The rep's job is not done until signoff on both sides of the agreement (even if commission occurs earlier).

We have multimillion dollar deals that fall through (could be that performance did not meet the specification), they return it and yes, the rep pays back the bonus/commission. Plus and impact of that sale on other commissions is owed too (this could be a kicker based on capital or supplies targets, i.e. once over 100% of the plan all subsequent commissions are get a 25% bonus).

[DaFonz]

Never having done I sales job how would one possibly know? I don't know sales people, this information is not on the net or in the textbooks, almost no one from schulich goes into sales careers and they are generallly looked down upon for low pay and job insecurity. I don't even think there is a course in sales at the undergrad level or grad level.

I thought you were a FT S&T analyst at a bank?

Oh wait.

[Abel4Life]

Never having done I sales job how would one possibly know? I don't know sales people, this information is not on the net or in the textbooks, almost no one from schulich goes into sales careers and they are generallly looked down upon for low pay and job insecurity. I don't even think there is a course in sales at the undergrad level or grad level.

Low pay? What kind of sales are you referring to? Junior roles maybe yes in terms of low pay and job insecurity.

In the IT industry or Consulting industry sales in a business development capacity (non junior) will generate income like anything. I know sales people in Oracle making 150k+ through recurring revenue sales and comissions from software licensing/support/consulting. They have to participate in Bids, Proposals, and the full life-cycle for sales.

Look at all these web/seo/marketing companies. Tons of competition. The ones with the best sales teams will land more clients.

Companies need good sales people/account managers to bring in new clients and increase revenue from existing. Problem is they are tough to find and its not like you can go to school for it.

[tednolan]

For those of you in sales jobs with commission from sales on the high end I have a question. What happens if you sign a major contract with a company, and that company has an agreement to pay lets say 1 million for whatever you just sold but then they end up not paying (say they went broke or something). Do you still get your commission or does the company ask for it back, or do you not get it in the first place?

Because I remember that my ca friend was telling me that many companies recognize sales from when the other company agrees to pay not when they get the cash.

Where I work, commission is not paid out when you make the sale. It is paid out quarterly - your commission is based on the revenue you generated that quarter. Revenue not received = no commission.