Question

Topic: Strategy

Clothing Sales Prices And Outside Rep Commision.

Posted by Anonymous on 7/21/2006 at 12:07 PM ET 250 Points
have a few questions. We have a clothing line and want to have an agressive startup.
what would we pay an outside rep and what would he typicly sell the apparel for.
this is high end action sports apparel full color prints
on front and back.

t shirts men retail 20-
womens shirts various style 22-
hoddies 49-

what would they sell them for and what would i pay sales rep for agressive start?
Thanks
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  • Posted by Deremiah *CPE on 7/21/2006 at 12:26 PM Member
    Hi steelmotorcross,

    I hope you're having a great day!

    this is a very difficult question to answer given the fact that you have not described who your target customer is and what the price of your merchandise is set to sell at.

    WHAT'S THE TARGET MARKET OF THE BUSINESS...
    For instance if you are a high-end marketer of clothing your price breaks will be set differently that a mid-end or low-end retailer. Of course it's possibly true that your cost of merchandise will be higher as well if you are buying your merch from high end designers versus lower end wholesale outlets. When I was a teen I sold clothing in a low-end clothing store so they paid me by the hour. But I have friends who sell for Neiman Marcus and another who sells for Carson Pirie Scotts. Of course they are paid commission but their rates vary.

    IN SALES COMMISSIONS CAN ALSO VARY BASED ON THE SALE PERSONS EXPERIENCE AND EXPERTISE...
    so please consider the thought...what will I pay a seasoned sales rep versus an entry level sales rep. If this is not considered before you start offering commissions you may be forced to give a higher commission than you anticipated and therefore having a terrible impact on your profit margin.

    ANOTHER QUESTION...*BP
    Have you created a business plan for the business? If you have then figuring out the price range for the sales rep will be based on what you expect your rate of return to be after the merchandise is sold.

    There are plenty of other things to think about as far as this question is concerned but I believe the more information you offer at this point the more information you'll get from the marketing experts here. Thanks & Remember our only real problem in life is our failure to be "MORE Creative" than we’ve ever been. If you “Invent” your opportunity YOU WILL most definitely create your future. Just know that I'm here for you if you need my help. Is there anything else I can do for you?

    Your Servant, Deremiah, *CPE (Customer Passion Evangelist)

    PS
    I first got into sales almost 20 years ago, plus spent 6 years in accounting and I'll tell you figuring out commissions can be very complicated depending on the level of how you look at it and also what is acceptable in the market place.
  • Posted on 7/21/2006 at 12:43 PM Author
    retail shops surf shops, dirtbike shops.

    retail prices are on 1st post
  • Posted by Frank Hurtte on 7/21/2006 at 12:57 PM Accepted
    First of all... I assume by Rep you actually mean commissioned sales agency. This is someone who does the selling but never takes possession of the goods. These people are independent contractors who cover their own expenses ect.

    I suggest a commission program that is based on selling at book price. Negotiated deals, whether they be based on quantity or simply clearing out old product would be at a much lower commission.
    Sales that are not paid within terms should also be paid a lesser commission.

    The standard amount in most industries for this service is 7-15%. Why the fluctuation? Products with high name recognition pay less than products with little or no brand value.

    If you have additional questions about how this works, drop me a separate email.
  • Posted by Deremiah *CPE on 7/21/2006 at 1:47 PM Accepted
    Hi steelmotocross,

    commission levels can vary from 10-15% up to 15-20% for a more seasoned sales rep. You can also do a small hourly rate scale and let the commission serve as a bonus for sells generated. But again you determine the commission based on what you want your company to earn and what you think is fair for your employees to earn.

    Your Servant, Deremiah, *CPE (Customer Passion Evangelist)
  • Posted on 7/22/2006 at 7:37 AM Accepted
    Compensation depends on the type of outside reps you use.

    1. Rep Firms - Rep firms many times are buy/resell. They will purchase the product from you as a manufacturer and resell at their own pricing to their customers. In this scenario, they are in control of their own compensation.

    2. Independent Contract Sales people - These people are paid only on what they sell and are paid a high commission. Generally 20%+. They pay their own taxes and are their own "business"

    3. Salary sales - These people work for you and are paid a salary only. They are given sales goals, which if they exceed they are bonused on.

    4. Salary + commission - Low base plus generally 10-15% commission on sales.

    Hope this helps.

    To Greater Success,
    Alyson
  • Posted on 7/26/2006 at 6:24 PM Author
    Sorry i was away for a little bit i will award after this.

    What is typical price a rep will sell a 20- t shirt to a store for?

    or a 40- hoddie etc

    i want to know if i am correct.

    if a independent sales rep sells my shirt to a store for $12- and retail is $20- and i pay him 20% i give him
    $2.40 do these prices sound correct?
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