Author Topic: Sales commission---what is reasonable???  (Read 2588 times)

nickdylan

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Sales commission---what is reasonable???
« on: January 30, 2009, 10:35:57 AM »
My question is somewhat confusing, please bear with me.  I brought a unique idea to a large med billing company (60+ billers) and we are entering into contract where I will have exclusivity for all marketing/sales of this "niche" service I propose to prospective clients.  Is there a "industry rate" to expect, or any formula to calculate which I could use as a baseline?  The companies billing from this venture alone will be between $90k-$250k per month out of the gate @ approx. 8%-10%.  They are producing all marketing and support material.  Thank you in advance!   

Michele

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Re: Sales commission---what is reasonable???
« Reply #1 on: January 30, 2009, 05:30:31 PM »
It sounds like you can't be very specific or you risk losing your idea, but I really can't tell what service you are asking me to give you an industry rate or baseline for.  You don't mean for actual billing do you?

Michele
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nickdylan

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Re: Sales commission---what is reasonable???
« Reply #2 on: January 30, 2009, 08:13:44 PM »
I'm sorry for confusing you.  They will be doing the actual billing @ a 8-10% service fee.  I will be representing the company as a sales associate, so I will be compensated a percentage of the 8-10% that they charge for services.  They professed that 2% was the "norm" for this type of arrangement. Maybe the situation is unique to you or anyone for that matter, but I thought I just check before entering into contract. 
I have visited your site since June of '08, and I think you provide people a great service.  I had originally planned to form my own company and build from there, however, the value of a 15 year established company, fully staffed and software systems in place, seemed like the more logic approach at the given time.  Best Regards.

Pay_My_Claims

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Re: Sales commission---what is reasonable???
« Reply #3 on: January 30, 2009, 08:21:25 PM »
Marketing...hummmmmm be careful of the Anti-Kickback law.

nickdylan

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Re: Sales commission---what is reasonable???
« Reply #4 on: January 31, 2009, 01:59:20 AM »
Thank you.  I think Stark is more a worry than Anti Kickback, but not in this case.  Termed contract, stated fee structure, etc., presented to all parties in advance covers most of the problems the way I understand it.  In addition, I will be employed by the billing firm.  Best.

Michele

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Re: Sales commission---what is reasonable???
« Reply #5 on: January 31, 2009, 08:14:44 AM »
Interesting concept.  I don't know of a 'norm fee' for this.  Sounds like you've covered all your bases though.

Good luck
Michele
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