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In your opinion, what are the pros and cons of hiring commission based plumbers as against fully employed ones. I'd appreciate honest contributions. Thank you
Commission Based Plumbers
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Well, who's taking odds on how many pages this thread will get to in 24 hours! This could be a hot potato!!
I want to totally stay out of the T/M vs flat rate thing.
I will comment this way: Business grows by making new/more sales. One could make a general comment that a good salesman is worth WHATEVER you have to pay him. SO the issue becomes, is the service man who you send into a customers house because he is a trained, excellent technician.....is he the right guy to be doing SALES? I think we are all aware that abuses have happened, folks who have every incentive to sell something whether it is needed or not, and perhaps no company ethics policies guiding them.
Hence, the debate will rage on!
I want to totally stay out of the T/M vs flat rate thing.
I will comment this way: Business grows by making new/more sales. One could make a general comment that a good salesman is worth WHATEVER you have to pay him. SO the issue becomes, is the service man who you send into a customers house because he is a trained, excellent technician.....is he the right guy to be doing SALES? I think we are all aware that abuses have happened, folks who have every incentive to sell something whether it is needed or not, and perhaps no company ethics policies guiding them.
Hence, the debate will rage on!
A few questions come to mind...
How big is the shop?
Is the 'owner' on the road in a truck or at the office?
When you say 'sales', are we talking selling a WC rebuild or a new bathroom from tile to ceiling? Maybe we are selling service contracts?
When I worked at a larger shop (employed hourly) we were instructed to have the cutomer make arrangements with our office for the 'sales rep' to stop by to discuss larger work with them. This would be tub re-fits, bathroom groups, kitchens, or even high end shower doors and the like. We, as 'plumbers' only 'sold' what we could carry on the trucks-i.e. faucets, maybe a toilet or toilet seat, hose bibbs, new laundry trays, etc.
In my humble opinion, if you can afford to do it this way, it's better than having (forcing?) the techs assume what can be an uncomfortable role, and it even makes service call scheduling smoother because guys don't get wrapped up giving sales pitches for 45 minutes after the primary call is completed. Again, we need to define the scope of 'sales' that we are discussing.
Now, regarding service contracts, I have'nt been able to get my head around this one, mainly because I personally find service contracts generally to be a waste of money just like extended warranties at Best Buy etc. For HVAC they may work, but for plumbing? The friends\family\customers I've discussed it with aren't interested, and before I started my own business I even counseled people to avoid them. I would be interested in how companies set them up, because maybe I'm not understanding how they work...
How big is the shop?
Is the 'owner' on the road in a truck or at the office?
When you say 'sales', are we talking selling a WC rebuild or a new bathroom from tile to ceiling? Maybe we are selling service contracts?
When I worked at a larger shop (employed hourly) we were instructed to have the cutomer make arrangements with our office for the 'sales rep' to stop by to discuss larger work with them. This would be tub re-fits, bathroom groups, kitchens, or even high end shower doors and the like. We, as 'plumbers' only 'sold' what we could carry on the trucks-i.e. faucets, maybe a toilet or toilet seat, hose bibbs, new laundry trays, etc.
In my humble opinion, if you can afford to do it this way, it's better than having (forcing?) the techs assume what can be an uncomfortable role, and it even makes service call scheduling smoother because guys don't get wrapped up giving sales pitches for 45 minutes after the primary call is completed. Again, we need to define the scope of 'sales' that we are discussing.
Now, regarding service contracts, I have'nt been able to get my head around this one, mainly because I personally find service contracts generally to be a waste of money just like extended warranties at Best Buy etc. For HVAC they may work, but for plumbing? The friends\family\customers I've discussed it with aren't interested, and before I started my own business I even counseled people to avoid them. I would be interested in how companies set them up, because maybe I'm not understanding how they work...
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I would love it if I could just pay my guys straight commission....
But when your company has a mixture of new construction, Renovations and service it is pretty hard to figure who gets paid what by %.
A service only company would be able to do commission easily.
But when your company has a mixture of new construction, Renovations and service it is pretty hard to figure who gets paid what by %.
A service only company would be able to do commission easily.
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This is a thought that has crossed my mind quite frequently. Taking closer looks at the numbers, there is alot of unpaid downtime. One way to cut cost on this would be to go to comission only. Pay the guys on what they bring in, and not what I think they are worth. The more they work billable time, the more they make, the more I make. I see it as a win win situation.
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:blink: You mean paid downtime right?
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I have considered this many times, especially if there is a callback. I just worry that it will get out of hand. I know good and well that I'm not going to look at every single ticket that comes in from 2, 5, 10, 20 plumbers and they will figure this out. Most customers won't complain, you'll just never hear from them again. It's very tempting and I may do it but I've worked so hard to bring this thing along, it would kill me to see one of my guys looking like a deer caught in the headlights in front of some "6 on your side" reporter. I don't know. Not at this time.
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I'd say the bottom line is commission based service tech is good for the owner, and bad for the customer.
When you are motivating the employee to make more money by selling more, the temptation in most cases for the employee is to over price and over sell.
I am proud to own a company that is not commission based even though we could probably make alot more money being commission based.
When you are motivating the employee to make more money by selling more, the temptation in most cases for the employee is to over price and over sell.
I am proud to own a company that is not commission based even though we could probably make alot more money being commission based.
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What is your CCB# for I can't even locate your business. Send me a PM with the number or are you on here to to advertise your web link?
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I worked on a commission based pay for at my last job, I just did not realize in untill right now
I would get paid billable hours. If I could bill 8 hours a day, that's what I got. 4, that's all I got.
So, the cheap faucet leaked, go fix it, no pay for you. HO put more paper towels in the drain, go clean it, no pay for you. (from the boss)"I'm taking off today(this week), make some calls, line up some work for yourself...." and, no pay for you for that.
What a horrible way to treat an employee. No sir, not for me. When I hire someone, I will not do that. If they aren't working out, then they're gone, simple. I realize stuff happens, and there is downtime. Part of the game.
BTW, once I got my License, I gave my 2 weeks the NEXT DAY. Had to go.
I would get paid billable hours. If I could bill 8 hours a day, that's what I got. 4, that's all I got.
So, the cheap faucet leaked, go fix it, no pay for you. HO put more paper towels in the drain, go clean it, no pay for you. (from the boss)"I'm taking off today(this week), make some calls, line up some work for yourself...." and, no pay for you for that.
What a horrible way to treat an employee. No sir, not for me. When I hire someone, I will not do that. If they aren't working out, then they're gone, simple. I realize stuff happens, and there is downtime. Part of the game.
BTW, once I got my License, I gave my 2 weeks the NEXT DAY. Had to go.
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1,017 Posts
My family business,I used to work for tried a few times to hire commisioned service plumbers, never worked out for owner, employee, or customer. What would happen, IMO, is that the commission guy was truly an honest person, but with the commission hanging over his head, he became dishonest, but not in his own mind. Slowly but surely, jobs started to get way overcharged, & like one said, customers stopped calling. I would go back on some of his screw ups, after he left, & was shocked at some of the work, & what customer was charged.
Bottom line, commission is ok if your honest, & stay honest. But most will not. Especially if they don't have another job lined up that day, they will try to upsell, or upcharge, the job their on, as a matter of survival.
Bottom line, commission is ok if your honest, & stay honest. But most will not. Especially if they don't have another job lined up that day, they will try to upsell, or upcharge, the job their on, as a matter of survival.
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15 Posts
hourly and commission
We went with a hybrid model since you can only do commission only in CA if they have a license and you are subbing the work to them. Our guys get paid by the hour. If their call is to install a kitchen faucet and they go out and sell replacing the p-trap too they get commission on what they up sell. We pay a fair hourly wage so the guys don't try to overcharge the customer. They have the option of using the flat rate price guide or just billing time/materials for the extra work. With 22 employees it makes it a lot easier on the payroll end.
We went with a hybrid model since you can only do commission only in CA if they have a license and you are subbing the work to them. Our guys get paid by the hour. If their call is to install a kitchen faucet and they go out and sell replacing the p-trap too they get commission on what they up sell. We pay a fair hourly wage so the guys don't try to overcharge the customer. They have the option of using the flat rate price guide or just billing time/materials for the extra work. With 22 employees it makes it a lot easier on the payroll end.
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