NAGASA - The Compass - Summer 1998

• President’s Column
• Are You Ready for the Year 2000 Bug?
• Past, Present, Future
• Study Focus
• Trade Show Committee Making Shows More Valuable to Members
• Equipment and Supplies Network Organized
• Calendar of Events

Study Focus
How Dealers and Resellers Compensate Their Sales Personnel

Sales commissions and salaries account for the single largest cost of sales items that management has control of. The challenge to dealers with establishing compensation for sales staff is to find a mutually satisfactory middle ground -- maintaining a balance between compensation so low that good performers move to competitors, and letting compensation get so high that personnel become lazy or fail to seek new business. Manufacturers need to understand the dealer compensation practices of peers so that the ideal sales programs can be made most effective.

Of the 69 dealers who participated in the 1998 NAGASA Sales Compensation Survey, 44 sell
primarily consumable graphic arts supplies. The remaining 25 sell primarily equipment and service. Some 38 of the responding dealers reported operating only one outlet, while 22 operate from two to five outlets and nine operate six or more outlets.

Typical of the information in the final survey report are details of the fringe benefits offered by dealers to their sales personnel. The chart below shows the percentage of all 69 dealers offering various fringe benefits. The actual final report shows how these offerings vary according to dealer size and sales mix.

Of particular interest to manufacturers is a wealth of information detailing the use of sales specialists by dealers and how these digital age personnel are compensated. The 1998 survey,
for example, showed that more dealers are involving their entire sales staff in complex sales, and not relying solely upon sales specialists. Most dealers now pay commissions to both territory sales personnel and to sales specialists when complex equipment sales are at stake. Of the dealers that responded, 87 percent of them pay commissions to territory sales representatives, and 85 percent pay commission to sales specialists.

The 1998 NAGASA Sales Compensation Survey is a fact-filled 52-page report with extensive analysis and comparisons to similar surveys conducted in 1994 and 1996. The report helps explain trends in the industry as well as benchmark current operations.

The cost of the survey is $95 for members and $155 for non-members, including postage and handling (special shipping and handling for overnight and foreign service). The report is free to participants. Call NAGASA at 202-328-8441 or order via the web site at www.nagasa.org.

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