# fair commission rates



## Roof Roof Roof

Hello all,

The company I work for specializing in storm damage, insurance claims. We offer customers full roof replacement for fair market value and/or for the scope of damage. In other words, what the insurance company will pay. Depending on the job, we sometimes can reduce the customer's deductible by offering a sign allowance.

I have now been in the position of project manager for five weeks. I have a few things on my mind. First, my responsibilities include the following:

Cold Calls
Knocking the doors
Securing a contract with the customers, meeting with the adjuster, selecting the shingles and completing the work order for the customer. I then, supervise the crew on the day of the build.

My starting pay is 7% of the gross profit. I have sold 10 roofs during my first five weeks and capped only one. Another to be capped soon.

It has been a steep learning curve, but I feel that I am doing well.

I receive one hundred dollars advance on each signed contract and receive payment of commission upon the receipt of the final check.

I feel based on the number of miles driven and gas expenses that I need a higher commission rate.

A few questions.

Does this sound like a fair starting wage and at what point should I ask for a raise?

I would like to know what is a good sales average for a residential project manager with my duties to sell per month.

Thanks for your response,

Sincerely,

Roof Roof Roof


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## RemStar

I think that you are being overworked and underpaid. I believe being a salesperson is a full time job on its own and it will be hard to hit a level of success if you are having to micro manage crews at the same time.

Do you feel like your making enough money for what your doing?

There are a couple other posts on this forum about salesperson commission, Check them out.


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## Roof Roof Roof

I feel i am under paid and i am in a steep learning curve but i almost have it down! Thanks for the input.

Roof Roof Roof:blink:


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## Roof Roof Roof

I noticed that 10 other members have viewse this thread. Thanks for the interest.
I would like to ask that a senior sale person or owner of a roofing company respond to my questions!!

Thanks in advance for your wise advice.

Regards,

Roof Roof Roof


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## Grumpy

Where are you from?

Storm chasers, and that's who you work for, make money by cheating. They cheat the customer by cutting corners, they cheat the sub contractor by paying peanute, they cheat the sales rep by underpaying as well, and when the storm is all gone they cheat the supplier by stiffing them with a couple months of unpaid bills. That's the racket you are engaged with.

7% is not a-typical from many of the storm chasers around here. No offense to you, but it doesn't really take alot of roofing education to be a storm chaser. I am not sure what your experience is and am making an assumption that you are a skilled salesman but not a roofer. 

I really don't like storm chasers so I am not going to offer any real advice other than to get a real job. Sorry.


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## Grumpy

I'll add that in another thread in this forum about sales commission I gave a rather lengthy explination as to determine the worth of a sales rep and determine a commission structure. You may take a look at that.


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## JWH

You should get atleast 50% of profit.


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## vtroofing

7% of Profit? 

If they are Stormer's and they/ you sell roof alone- no three trades 10/10 there is no Profit and No Overhead. Xactimate numbers are low down South so after the Office gets a cut, then you get a cut of a cut, and you make no mistakes in your Scope you see something- probably not much more than that $100 and how far does that get? Full tank of gas and drive thru breakfast. 

It is a sad scenario. All that sun and warm weather yet no money.


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## vtroofing

RemStar said:


> I think that you are being overworked and underpaid. I believe being a salesperson is a full time job on its own and it will be hard to hit a level of success if you are having to micro manage crews at the same time.
> 
> Do you feel like your making enough money for what your doing?
> 
> There are a couple other posts on this forum about salesperson commission, Check them out.


Yes. And if you are a Salesman- and a Project Manager why not just find a crew and start your own thing?


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## qejustin

*Commission*

From my experience, you are not getting paid anywhere near what is the norm. We do a lot of insurance restoration work but locally; we dont chase storms. Our sales people/project managers have a similar job description as you do. They handle the job from sale to install. We feel that this is best for the customer as they have 1 point of contact through the entire process. 

With that being said we pay our salesman between 40-50% of the profit. I know some roofing companys pay 60% but we give our sales people a lot of leads and they get a lot of office support.

Example:
10,000 Job
-7.5% Office Overhead
= 9,250.00
Material/Labor cost $5,000.00
Profit = 4,250
Rep gets 2,125


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## andy

qejustin said:


> From my experience, you are not getting paid anywhere near what is the norm. We do a lot of insurance restoration work but locally; we dont chase storms. Our sales people/project managers have a similar job description as you do. They handle the job from sale to install. We feel that this is best for the customer as they have 1 point of contact through the entire process.
> 
> With that being said we pay our salesman between 40-50% of the profit. I know some roofing companys pay 60% but we give our sales people a lot of leads and they get a lot of office support.
> 
> Example:
> 10,000 Job
> -7.5% Office Overhead
> = 9,250.00
> Material/Labor cost $5,000.00
> Profit = 4,250
> Rep gets 2,125


I need to give up the installs and start selling them if it's like that.


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## Grumpy

vtroofing said:


> Yes. And if you are a Salesman- and a Project Manager why not just find a crew and start your own thing?


 Oh Man! I can tell you ALOT of reasons why not. 

There is soooo much more that goes into running "your own thing" other than just production and sales. There is the administrative, human resources, legal, and financial aspects to running a business. 

It's very hard, for me anyways, to be all things and keep the wheels running on the machine, and not work 80 hour weeks, and not have customer service suffer. Something's gotta give when you wear too many hats, and the family is usually that thing.


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## Aaron

Ain't that the truth, Grumpy. In your mind you're working for your family, but in the end you feel like you never get to spend time with them.

It's one thing to run a business. It's another to run it right, run it well, and have a life left over afterwards.

Aaron

www.american-roofing.biz


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## vtroofing

Ok Grump let me restate my comment. 

If OP finds work, meets adjuster, material selection with HO, orders materials AND Supers the job, AND collects he IS running the business. So aside from paying the bills and scheduling what am I missing?

A Salesman should sell. Before the Contract is signed and following through collecting and that shouldn't be a requirement- good move to obtain referrals just like being there at start up to show face. 

Project Manager- on staff- should be scheduling, ordering materials and overseeing install. 

My personal issue is not finding work but finding time to do it all. Don't get me wrong it is better than scrambling for work. 

Organized Companies grow. Organization within a company by overworking and drastically underpaying just won't work.


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## Grumpy

No he is NOT running the business BT, he is simply running the operations. 

Let's see, you are missing the bonding, the licensing, colelcting subs insurances, the court appearances, the meetings with the lawyers, the meetings with the accountants, the meetings with the suppliers, manufacturers reps, manufacturer certifications, vehicle maintenance, equipment maintenance, putting out fires, hiring, firing, training.... and on and on and on. 

I agree with almost everything that you are saying over all. I just disagree that managing sales and managing production is the sole sum of running a business. 

My sales reps collecting was a requirement but not strictly enforced as they would get help from my administrative office. However since they didn't get paid until the company got paid, it was something they didn't often slack on. My written policy is that the customer has 60 days to pay an invoice before it gets referred to colelctions. Once an invoice gets referred to collections ALL commissions revert to the company to pay legal collection fees. 99% of our customers pay well before 30 days.


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## 1985gt

@grumpy

How often do you met with lawyers and have to go to court! I guess if your putting out a lot of fires then I can see it. :laughing:


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## chb70

10% Office Expense
50/50 split on profit

Make sure you know what subs are making and how much material is costing and you will do very good in this business.


Complete Roof


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## Grumpy

1985gt said:


> @grumpy
> 
> How often do you met with lawyers and have to go to court! I guess if your putting out a lot of fires then I can see it. :laughing:


 I meet with my lawyer at least once per year no matter what. I also meet with my account once a year no matter what. Actually I should be meeting my lawyer quarterly to do the corporate minutes! Yes if you are a corporation you are supposed to have quarterly meetings of the share holders and record these meetings even if there is only one share holder.

From time to time I need to meet more often. I sued someone last year and have had to file two liens in the past 6 years.


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## 1985gt

I'm glad I don't have to deal with all that. Amazingly we rarely have problems with people paying.


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## Grumpy

1985gt said:


> I'm glad I don't have to deal with all that. Amazingly we rarely have problems with people paying.


 I think 1 collection problem per year isn't so bad. I try real hard to please the customer but figure every year we pick up one bad egg.


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## 1985gt

Grumpy said:


> I think 1 collection problem per year isn't so bad. I try real hard to please the customer but figure every year we pick up one bad egg.


No I would say that is pretty darn good. Even if you only do 5 jobs a year and one person doesn't pay on time you still have a better percentage then a number of roofers I'm sure. Hopefully your doing more then 5 jobs a year too. :laughing:

I just hope the weather holds out for us. We could use the break after the lack luster summer, now all the work is piling up. We could honestly work all though winter if the conditions allow it. Its been a couple of years since we have had this problem. Still playing catch up though.


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## IHAS_LLC

*Commissions*

*1. Plan One – Training*
Ø Salesman must call in no later than 7:00 am and must call in prior to heading home in the evening. 
Ø Salesmen will help with house accounts as necessary.
Ø Senior Sales Staff will assist you with
Ø Appointment/sales call
Ø Measuring roofs and filling field sheets
Ø Building sales folders
Ø Teaching & verifying material orders/calculations
Ø Teach billing & supplements overview. You will not be responsible for billing or supplements however you need a good working knowledge on how they work.
Ø Properly verifying proper agency for Permit Applications 
Ø Meet crews at job start introducing them to customer and be available if crew needs additional materials to complete jobs. Check on active jobs throughout the day to ensure quality.
Ø Deliver close out documents and collect final checks.
Ø Commission to be paid on all jobs sold and collected at $250.00 or 20% of company profits. The larger value will be paid.
Ø $ 300.00 draw will be available upon collecting ACV Check.
Ø Balance upon final check
Ø Maximum time for a salesman to be on this plan before moving to plan two is 3 months.


*2. Plan Two – Junior Project Manager*
Ø Salesman must call in no later than 7:00 am and must call in prior to heading home in the evening. 
Ø Salesmen will help with house accounts as necessary. 
Ø Commission to be paid on all jobs sold and collected at $500.00 or 30% of company profits. The larger value will be paid. 
Ø $ 300.00 draw will be available upon collecting ACV Check. 
Ø Six months after moving to Plan Two, or by request, the salesman will be moved to Plan Three. 


*3. Plan Three – Senior Project Manager*
Ø Salesman must call in no later than 7:00 am and must call in prior to heading home in the evening. 
Ø Salesmen will help with house accounts as necessary.
Ø Commission to be paid on all jobs sold and collected at $500.00 or 40% of company profits. The larger value will be paid. 
Ø $ 300.00 draw will be available upon collecting first check.





Roof Roof Roof said:


> Hello all,
> 
> The company I work for specializing in storm damage, insurance claims. We offer customers full roof replacement for fair market value and/or for the scope of damage. In other words, what the insurance company will pay. Depending on the job, we sometimes can reduce the customer's deductible by offering a sign allowance.
> 
> I have now been in the position of project manager for five weeks. I have a few things on my mind. First, my responsibilities include the following:
> 
> Cold Calls
> Knocking the doors
> Securing a contract with the customers, meeting with the adjuster, selecting the shingles and completing the work order for the customer. I then, supervise the crew on the day of the build.
> 
> My starting pay is 7% of the gross profit. I have sold 10 roofs during my first five weeks and capped only one. Another to be capped soon.
> 
> It has been a steep learning curve, but I feel that I am doing well.
> 
> I receive one hundred dollars advance on each signed contract and receive payment of commission upon the receipt of the final check.
> 
> I feel based on the number of miles driven and gas expenses that I need a higher commission rate.
> 
> A few questions.
> 
> Does this sound like a fair starting wage and at what point should I ask for a raise?
> 
> I would like to know what is a good sales average for a residential project manager with my duties to sell per month.
> 
> Thanks for your response,
> 
> Sincerely,
> 
> Roof Roof Roof


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## IHAS_LLC

*Comission*

I work and cost jobs for quite a few roofing contractors and I can tell you that there are MANY ways to calculate the commission structure.
I have seen guys being offered 10% of the contract price. This is a problem for the contractor unless you have a minimum profit contingency built in.
I see 30% of profit all the time. That is calculated on Material+permit+Labor as the cost (NO O&P) for a general salesman that is really just selling and not working the production end. 
I see guys saying 50% but that’s calculated on Material+permit+Labor*+O&P* which works out to be about 30%, THE SAME AS ABOVE NET.
THE most common I see and recommend to my customers is the following
1. 20% to a new guy with a mentor that is door knocking and handing in paperwork to production and all they are really doing is getting a claim, contract, and turning it over.
2. 30% to a guy that is self sufficient but still not a the point of generating paperwork including material orders and other crucial components of being self sufficient. 
3. 40% they sell, order materials, schedule the crew, fill out the entire close out docs but don’t deal with the insurance company on billing.
4. 50% is the guy that does everything the 30% guy does but they also invoice the insurance company, are Xactimate certified, been to Haag, and the bottom line is they are completely self sufficient and they are USING the contractor for a license, providing a crew, licensing, financing, and most of all reputation.
You can say higher percentages and then include O&P to MAKE IT SOIUND like your taking better care of the sales reps but all in all is seems (and I have many companies paperwork to prove it) the general rule of thumb is that a salesman should look for around 10% of what the contract is for (as a rule of thumb)
Our company consistently gets 2-5K more per job from the insurance companies so the salesmen do much better but that’s another story…
Good Luck! 

PS, I'M ALWAYS looking for good salesman!
Our Salesman make between 100-200K annually March-October
http://www.ihasllc.com/


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## Northridge

We pay our guys 40% of the net profit.


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