How Much Does a Roofing Salesman Make?
The compensation plans for roofing salesman pay are almost always based on an as earned commission struture.
The vast majority of residential roofing sales opportunities are as an independent contractor, contract labor, or subcontractor working for an 1099 tax form.
While there are a few employee salary sales positions out there, they are primarily in commercial roofing, and most of those require extensive experience and proven sales performance.
Benefits in Roofing Sales
In commercial roofing sales jobs, you may even be offered benefits including health, life, and dental insurance as well as paid vacation, sick days, and scheduled time off. Some will offer you a company truck and a gas card too.
These benefits are rarely found in residential roofing sales. Although some will pay to relocate you if you’re willing to travel or “storm chase”. A few roofing companies may be willing to offer you a housing allowance or living expense stipend when you’re working away from home.
I guess you could call this job “recession proof” as long as you’re willing to go to the latest storm. Personally, I don’t like to travel. I sleep in my own bed at night.
While a salaried sales position with benefits sounds good, there are usually strict sales quotas required to keep your job. Either that, or the salary is small and requires added commissioned sales or bonuses for you to make a living wage.
Some roofing companies will offer you a paycheck guarantee, usually in the form of a draw against future commissions, for your first several weeks in the business. You may also find a roofing company that will pay you to attend their roofing sales training sessions. These incentives can help sustain you as you learn the roofing business.
Either way you look at it, you get paid for selling roofs. If you’re not selling, you won’t keep your salary roofing sales job for very long or you’ll go broke working as an independent contractor.
Average Annual Earnings
However, if you can sell, you’ll make money.
Although most roofing companies will give you an average first year earnings target, that number can range by tens of thousands of dollars.
Roofing sales can be extremely seasonal work with you making the majority of your annual income in the busiest months. A true average will factor in all twelve months; the good months and the bad months.
You have to be careful when considering averages.
If I stick my right foot in a pail of ice cold water, and my left foot in a pail of boiling hot water, I’m about right on average.
There are just too many variables to give you an accurate average pay range. We’ll try to cover as many of these variables as possible because I want you to draw your own conclusions on how much you can make selling roofs.
Since residential roofing sales jobs are primarily commission-only, you’ll hear all kinds of promises from roofing companies looking to recruit you to work for them. Unless you’re getting paid to train or a time-limited, guaranteed paycheck, the financial risk to the roofing company is minimal because you’ll only get paid when you sell something.
You’ll hear promises of “the highest commissions”, “the most aggressive compensation plan in the industry”, “best commissions”, “negotiable commissions”, or even “we’ll pay you more than what you’re making now.”
Commission Rates and Compensation Plans
Commission rates and compensation plans can vary quite a bit from one roofing company to the next. There’s a reason for the differences in pay, things you’ll need to understand before you start working. For now, we’ll focus on sales commissions and compensation plans.
The normal commission rates are based on either a flat percentage of the contract or a percentage of the profits. Although percentage-based roofing salesman pay sounds simple in principle, the devil is always in the details. More on that as we go along.
Flat Percent of Contract
The flat percentage of contract is probably the easiest method to explain. Your pay is based on a percentage of the total contract sold.
Those percentages start as low as 5% and can be as high as 13%, 14% or 15% of the contract. The standard flat percentage pay in the market today is right around 10%. You may have to take a lower percentage while in training, but you can work your way up as you hit sales performance targets.
Percent of Profit
My personal favorite compensation model is based on an percent of profit.
There’s three reasons for that…
First of all, if you sell a job that makes more than average profit, you don’t want the money that goes into your pocket to be capped at 10% of the contract.
Secondly, if you find yourself in a competitive bidding war, you want the liberty to take a low profit job even if it means you’ll make less money. When you get paid the other way, as a flat percent of the contract, the office will only allow you to take jobs with a minimum profit level.
Finally, your job may require extra work or qualify for overhead & profit. As the profit grows, you want your paycheck to grow too.
Commission Split Percentages
On the low end, some roofing companies will pay 25% of the profits to their sales people. There is always a justification for why the percentage is this low (e.g. experience, training, draws, leads, marketing materials, etc.). You’ll have to do the math for yourself to see if it is a good deal for you.
On the high end, I’ve seen commission percentages as high as 60% to 70%. Some of these percentages are promotional for the first few months and go down during hail season or when other services are provided by the roofing company.
To get these higher percentages, you’ll generally expect almost no training, as well as less marketing and office support. In short, you’ll do more work and have more expenses, but you’ll get paid more. This can be good for some sales people. Again, you’ll have to weigh everything before you decide if this is a good deal for you.
Average Percent of Profits
Most roofing companies offer percentages in the 40% to 50% range with a reasonable level of training, marketing, and office support. These levels of support can vary greatly from company to company though.
If there is an average commission pay level in roofing sales, 50% + Bonuses/Incentives is where most of the experienced sales people I know are most comfortable.
Paid Profits on Additional Revenue
You’ll want to specifically ask if you get paid a percent of profits from supplements, additional work, and overhead & profit. You may bring in a contract for $10k with $2k in profit, but if the office handles the insurance paperwork for you, that $10k job may grow to $15k from supplemental work or overhead & profit.
If you work for a roofing company with an licensed insurance adjuster on staff who is familiar with Xactimate, your total dollar amount could grow very quickly. Many roofing companies do not pay on this additional revenue. You can give yourself an immediate raise by working for a roofing company that pays you a profit split on every dollar collected.
Will you also get paid profit on all trades (e.g. painting, gutters, drywall, etc.) or is your profit only based on the roofing portion of the contract? Can you make more money by selling extra work like radiant barrier, exterior painting, or a new fence? Some roofing companies will pay a lower profit percentage on any extra work sold.
Bonuses, Incentives and Sales Contests are common in roofing sales. Some roofing companies don’t offer these extras, but many good companies will have them to encourage, motivate and reward their sales team.
Office Fee, Operating Expense, or Overhead Charge
Most roofing companies charge an office fee, operating expense, or overhead charge to help cover the expenses of running a company. This is usually based on a percentage of the total contract or total revenue collected.
These percentages can be anywhere from 2%, 5%, up to 12% of the contract. There are some roofing companies who have a ceiling on what the total overhead charge can be (i.e. 12% Overhead Capped at $500) or they may have a flat operating expense (i.e. $350 flat expense per job).
Generally, the more training, marketing and office support you receive, the more likely you are to pay overhead.
There are roofing companies that pay a good commission split (e.g. 40% to 50%) and do not charge an office fee, but still offer training, marketing and office support. However, as they grow and mature, I’ve found that they’ll often start charging these fees and increase them over time.
One last word on paying overhead, even if you aren’t paying an overhead fee, you have to be careful because you may still be paying an overhead fee when the roofing company artificially inflates their labor or material charges. They could add surcharges, fees, or expenses to the back side in order to decrease your profit percentage.
You should know what your job costs to produce. Experienced roofing sales reps have a general feel for job costs because they’ve done it so often. They know what materials and labor cost.
When you’re first starting out in roofing sales, you won’t know what it costs unless your roofing company tells you. That’s why I’ve always said, “If you don’t trust your roofing company, you need to find another roofing company.”
Creative Compensation Plans
There are other, more creative, compensation plans. These are generally not as good as the flat commission or percentage of profit plans. In the final analysis, you have to look at how much money you’re making overall.
Some companies will pay you per lead while you are training. This payment is usually somewhere between $20 and $50 per lead you generate.
Getting paid on leads could be contingent on several factors including whether or not the experienced sales person was able to meet with the homeowner or was able to inspect the roof. Once you are comfortable selling on your own, you’ll usually transition over to straight commission.
Another creative compensation plan is to pay you a set dollar amount of $10, $20 or $30 for every square of roofing material sold. Some may offer a flat dollar amount of $100, $250, or $500 per sale. While both compensation models are interesting, I would personally prefer to have the commission profit split.
Finally, there’s always somebody out there who wants to pay you $8, $10, $20 or more per hour to sell roofs as an independent contractor. Obviously, I think this is a terrible idea because there will be times when it takes you less than an hour of prospecting to sell a roof.
Would you rather make $8 bucks or 50% of the profit?
Draws are one way to make it financially when you first start selling roofs. However, there is a wide range of definitions for what is a draw. Generally, a draw is when you get money up-front, before the customer has paid in full. Some roofing companies only offer draws for a short period of time. They’ll cut off your draws after you have sold several jobs.
Most roofing companies will want to see a signed contract with insurance papers before you get a draw. Many want you to bring in a first check before they’ll give you a draw. If you collect money up-front, you can usually get a draw.
The draw could be a flat amount like $150, $250, or $500 when you turn in the contract with the first check.
Your draw could be based on a percent of the contract. Usually, somewhere around 4%-5% for turning in a contract with the first check.
Some roofing companies who pay on the flat percentage compensation model will pay you your full flat commission when you turn in checks. Usually, you’ll get your percentage of whatever the check is that you bring in.
Some companies will pay you your full flat percentage of the entire contract when you bring in the first check. My caution to you here is whether or not you’ll be paid for any future increases in the revenue due to additional work, supplements, or overhead & profit.
My Favorite Roofing Companies
My favorite roofing companies will pay you a draw when you sign a contract before you get the first check. This is unusual though.
Another thing you need to know is when you’ll get paid. Most roofing companies I know want to pay you once a week on Friday. One roofing company I know will pay you on Friday if you’ve turned in your paperwork no later than Wednesday at Noon. Knowing when you’ll get paid is important.
My favorite roofing companies will chase you down and pay you when you sign a contract and when you collect a check regardless of the day of the week. They’ll pay you on Monday, Tuesday, Wednesday, Thursday, Friday, Saturday, or even Sunday if you need to get paid.
When Do You Get Paid In Full?
Although there are roofing companies who will pay you your full flat percentage when you turn in your job, you’ll have to wait longer to get paid your full commission when you’re working on a commission split. That’s because labor and material invoices have to be received and final job costs calculated before splitting commissions.
You want your final profits to be calculated (a.k.a. capped or cost-out) as quickly as possible. If you can get a cost-out on the day you collect the final check, that’s great. You might have to wait until Friday to get paid, but faster is better.
Basically, anything that delays your customer paying their final check can keep you from getting paid.
If your roofing company is slow about getting your job produced or they’re slow handling the office paperwork, it can delay you getting paid in full.
It isn’t unusual for these delays to cost you weeks or even months without getting paid.
Faster is better.
P.S. I’m going to write this section on Roofing Sales Jobs as an 4-Part series. The next article will discuss all of the possible responsibilities and job descriptions of a roofing sales person. As always, if you have any questions, contact me.
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