What's a decent manager commission?

Maybe this topic’s already been covered, but whatever...
hoping I can grab some insight here.

I'm trying to figure out what a standard commission looks like for a manager when they close a deal... specifically within a design studio setting.

1. Is it better to put them on payroll or just go with a contract basis?
2. If they're on the payroll, should we be looking at a fixed salary or a percentage?
3. What kind of percentage are we talking about?
4. And is that cut based on the total project value or just the portion they actually brought in?

Any help would be huge—I've got a feeling this guy might be trying to fleece me...
🙄

So, is nobody gonna help out this poor, helpless girl who’s just dying to marry some hot, dangerous corporate manager?

😢

thanks a million, seriously

mod.... kill this thread

Look, don't be in such a rush to ask 😉

Here’s the deal: most sales managers usually pull in a decent base salary plus a commission—somewhere in the ballpark of 5 to 10% on sales.
Whether the deals actually go through you or not... I don't know, maybe it matters, but honestly? It might not. I mean, if people start trying to bypass you just to dodge the cut, you’ve gotta figure out how to protect yourself from that.

Just be specific about what we're actually talking about.

So, I just officially launched my own design studio, and I’m currently sitting here at my desk with my boyfriend, who’s basically hunting for work...
The issue is, he’s under the impression that we should be equal 50/50 partners. He wants half of everything that comes through his leads, plus half of everything else—even stuff he had zero hand in—plus his payroll registration and gas money too.

Meanwhile, I’m the one footing the bill for every single business expense, taxes, filings, and all that fun stuff...

Honestly? It feels like a massive reach.😕

Oh, and I totally forgot to mention one more thing...

Thanks, you're a lifesaver😘

So what exactly is he bringing to the table at this company??

I mean, does he have connections? Market knowledge? Sales experience? Capital? A physical location or something... I don't know, who knows...

Is he actually a co-owner of the company? If he is, you need to deal with him immediately. 🙂
Generally speaking, a standard commission is somewhere between 10% and 30% gross of the total deal value, and that’s only once the client has actually PAID. Anything beyond those numbers is pure fantasy; he can dream about that all he wants. Personally, I usually pay around 10-20% gross for referrals, and even then, I only cut the check after the job is finished and the funds have cleared. I'm talking about IT services and software development, so the business structure is pretty much identical to yours. All of his overhead—taxes, gas, coffee, social security, whatever—is his responsibility and should be baked into that percentage. It's all included in that gross figure. And honestly, I don't bother with any kind of retainer or recurring fee; that just doesn't make sense to me. Even when I hand off a project to someone else because I either lack the specific expertise or just don't have the bandwidth, I still only take a 10% cut. As for how I pay, I strictly use direct deposits via a 1099 contract, or I pay their LLC/business directly upon receipt of an invoice. Occasionally, if they're a student, I might use a student work arrangement, but that's about it.

Kyle Nelson2 said:So, what's he actually bringing to the table at this company??

I mean, does he have connections, market insight, sales experience, capital, office space... you name it.

He’s done this kind of thing before—so yeah, he definitely has some experience and a few contacts under his belt...

The physical space and equipment aren't his, though—he just uses the gear he already has at home (laptop, printer, etc.).

The absolute kicker was when this gig—which was already a done deal under my name and my company’s name, and I’d actually already started the work—was handed off to some other guy just because apparently 50% wasn't enough cash for him.

So now, get this: I’m stuck doing all the work for a job I won't see a single cent from, and I still have to cover all the various taxes on it.

I’d say cap his cut at 20% of what was actually agreed upon and paid. Honestly, you might even want to think about making him offset the damage he already caused on that previous deal first...

Sales managers are experts at one thing: selling themselves. 😉

Are you reporting him through HR or is this just an independent contract situation? Maybe suggest a simple freelance agreement or a referral fee structure to start—that way you can actually see if he delivers.
If he’s already handed off a closed deal to someone else, you really need to watch your back so he doesn't sabotage your other accounts.

And for heaven's sake, make him sign an NDA.
Also, it's pretty standard practice—if he's pushing for a higher commission—to include a non-compete clause so he can't jump straight to a competitor the second he leaves.

Look, you really need to give us more elements to work with here if we're actually going to be able to dive into any kind of detail.

Honestly, explaining all this is getting way too complicated... I was really just trying to get a general sense of how things usually work—you know, what’s considered standard versus what’s just going overboard.

Look, I’m totally fine with being transparent and doing a fifty-fifty split, but even that doesn't seem to satisfy him. So now I’m seriously questioning if I even want to deal with someone like this in the first place.

😢

I think you're being way too generous here...

Honestly, I’d just give him an ultimatum...
Like, here’s 20%, take it or leave it. That's it.

Then I'd just cut ties and move on, no hard feelings... I really can't stand people who try to hike up their prices like they're made of solid gold...

And I wouldn't even be surprised if he ended up settling for that 20% anyway.

I guess he figured I was just some airhead blonde who’d be happy to let him play boss for a month while I sat around being grateful he was "feeding" me work

Angela Newman33 said:What really drove me crazy was when a contract that was already settled (under my firm's name and mine—I had actually already started working on it) was handed off to some other guy just because he apparently felt like a 50% cut wasn't enough money.

And now I’m stuck facing all sorts of taxes for a job I won't see a single cent from.

Gle, if someone pulled a stunt like that on me, I wouldn't just stop doing business with them forever; I wouldn't even grab a coffee with them. I'd honestly rather go hungry than let someone walk all over me like that.

Joshua Chavez said:Gle, if someone pulled a stunt like that on me, they wouldn't just be blacklisted from doing business—we wouldn't even be grabbing a coffee together. I’d honestly rather go hungry than let anyone walk all over me like that.

I mean... yeah, but I don't want to end up being a total jerk myself 😢

Angela Newman33 said:I get that... I just don't want to end up looking like a total jerk.😢

They're going to screw you over anyway, so why worry about being the bad guy?
At the end of the day, business is business. Everyone involved is looking out for their own interests, including you. 🙂

So, here’s the latest update on my manager...

He decided to launch his own LLC and—surprise, surprise—he basically swiped every single contract he ever landed for the agency (all three of them) to run through his new business (which doesn't even exist yet). Meanwhile, I’m just left hanging. And don't even get me started on the workload—I’m the one actually doing all the heavy lifting while he just plays the role of the "closer."

Now, he’s decided to outsource some of the work to another designer—someone who’s willing to take less than 50% of what I make.

Yeah, those deals were definitely closed based on his charming smile rather than any actual reputation the company had built up.

So, where does that leave me?
I honestly feel like I could lose it thinking about how much effort I poured into working for a guy who would sell his own mother out for a quick buck... though, I guess there's a silver lining in finally being done with him.

Nothing, you’ll get through this. Every bit of training comes with a price tag, and honestly, this was pretty cheap 🙂 You should probably start looking for work on your own. I’m sure you have a million friends out there, so tell EVERYONE you need a job. Something will always turn up eventually. For starters, just take whatever comes your way, no matter how small, just to get some experience under your belt and build a network. In a few months, you’ll likely look back on this and laugh.