by Chase Reed on November 27th, 2008

Chase Reed

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My question is: if I pay a salesman 70,000 per year, how much must he sell to justify the salary? Thank you in advance to anyone who can help me!

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Answers. 6 helpful answers below.

  • by ConservativelyLiberal on November 27th, 2008

    ConservativelyLiberal

    My theory would be $100,000. Seeing as how healthcare, and insurance, and the rest of your employee related bills would go up.

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  • by gregspecs on September 28th, 2009

    gregspecs

    I am a salesman for 14 years, and I like to think at least a significant percentage i.e. 50% be entirely based on performance - thus commission.
    As you asked, to justify the salary means effective performance from the salesman.
    Then again depends on what is the product/ service, the market competition, etc to ensure sales performance sustainability.

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  • by Mendtos on November 27th, 2008

    Mendtos

    It all depends on the kind of margins you want.

    You also have to take into consideration benefits, retirement packages, etc

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  • by krsnaknows on November 27th, 2008

    krsnaknows

    It has to depend on the contribution of the salary to the company's cash flow. Suppose his salary should be 2% to sales then he should be doing a sale of about 3.5 mil. So calculate according to the contribution to the company's bottom lines.

  • by Greekgod on November 27th, 2008

    Greekgod

    Well to put it into perspective. I sell industrial instrumentation(flow meters etc).
    I will get paid the equivalent of about $70,000.
    My target was in dollars was $1.2 million. By September I reached that target and to date I am on $1.79 million

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  • by tammie on November 27th, 2008

    tammie

    How much does the product that he's selling cost you? How much more are you paying for his benefits and insurance? How much time are you investing in training him during the day? I'm sure I can think of a few more questions.

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