Question

B2B problem:

I wanted to tap into your wisdom. We are currently recruiting a B2B account manager. As we noticed with the last one (who left at the end of August) our salary package is not very competitive. We are at the very final steps of our interview process and, based on what we have learned, I have put together the proposal below. I understand that you don't know the market, which is fine; your "common sense" feedback would be highly appreciated.

We would offer a base salary + commission. Based on the candidates we have seen the base salary should be between $80k and $100k per year. The commission structure should enable her/him to earn an additional $30k to $50k per year (if the B2B business grows).

Below is a proposal in terms of commission structure; let me know what you think:

- 5% commission for orders with price discount <10% (strictly lower than 10%)

- 2.5% commission for orders with price discount between 10% and 30%

- 1% commission for orders with price discount >30% (strictly higher than 30%) - Maximum price discount is 40% (unless exceptions approved by management)

Price discount takes into account free products. Commissions are earned on all accounts (including the existing accounts that re-order and including corporate accounts), with the exception of accounts not handled by the B2B account manager (e.g. Holland America). The commission is the same for new and existing accounts (the reason is: money is money); the commission is the same for wholesale and corporate accounts: the % commission is not based on the type of account but on the % discount vs. retail prices.

My assumption is that the annual commission would amount to $12k to $16k, based on 2017 numbers. In other words: the B2B account manager will have to work hard to get to the $30 to $50k in additional commission that they told me they wanted to reach.

Below are the 2017 B2B numbers; based on what I have seen it looks like the B2B business has been down at least since 2016 (I don't have B2B sales numbers before 2016):

	Total 2017	Q1 2017	Q2 2017	Q3 2017	Q4 2017
Corporate sales 2017 (price discount is typically between 0% and 10%; can go up to 15%)	176,127	10,075	8,079	2,515	155,458
Wholesale sales 2017 (excluding Edible Arrangements) (price discount has typically been 40%, but should be 30% for smaller clients)	293,153	64,403	45,394	66,065	117,291
Total B2B sales	469,281	74,478	53,474	68,580	272,749

Your feedback would be highly appreciated.

Answer 1

The salary to be offered is definitely the decision of the management, Here I am just giving my recommendaton.

It appears that the company is willing to pay $110 K to $150 K per annum to the manager.

Th commission rates look very reasonable, although based on the figures of 2017, It will just give an earning of upto $ 15K as pointed by you.

I can give you a couple of suggestions:

1. If you want to make the B2B business grow at a fast pace, it will be reasonable to make the job more competitive. I mean you can consider paying $60 to $ 80K as fixed salary and increasing the commission rate applicable, so that the manager will have to put in extra efforts to get the desired earnings. This will also boost the moralle of the managers.

2. Secondly, you mentioned the commission is same for the new and existing clients. Here I think that a person who is attracting new business towards the company should be rewarded.

For example: You can offer a higher commission to managers if they bring new clients or the clients who have not purchased for the past 3 years (say).

The initial commission (i.e. the higher commission) should be paid for the first year only. Afterwards, the commission rate as stated above should apply. This will perhaps help in bringing new business.