How Roofing Companies Pay Commissions
I started to answer this common question in the reader comments section, but realized I should probably post my reply as a full-blown article instead because everybody will ask themselves the same question at one point or another.
Let’s start by posting Janet’s edited comment here and then I’ll answer below…
I have been reading all the questions and your replies. I have found helpful information on you site. You do know your stuff!
I have several questions. I’m new to roofing sales as of last year.
Can you explain some of the different ways roofing companies pay commissions?
And what would be the duties or job description for sales reps?
Is it normal for sales reps. to do the estimating and supplement requests, submitting orders and basically managing the account all the way to the materials order?
As well as collecting the supplement/depreciation checks?
Is it acceptable for me to request a breakdown of the job costs from my company, so I know exactly what the costs were?
I am working with a roofing-siding company that has only been in business for a year. I think they have me doing more than other companies require. In the beginning, I was gung ho and sold a lot of roofs.
I have been so busy managing the 78 accounts that I have, that I don’t have any time to canvass. I am on the computer and phone all day and most of the evening. My company requires that I touch base with the customer every 3-4 days.
What are the normal responsibilities of a sales rep for an established company?
You would think they would utilize me on the sales end which is my strong point instead of paperwork & phone calls with ins. co./adjusters, and multiple trips to the customer’s home, picking up supplement checks.
I haven’t had any new accounts b/c I’m too busy managing the ones I have.
Maybe a company that is more established is the answer. I’m thinking about going to a different company.
Thank you Mike!
Here’s my response to Janet…
First of all, congratulations on your 78 accounts. That’s impressive. Sounds like you have your hands full though.
That may not be a bad thing though, here’s why…
When I got into the roofing business back in ’95, I was responsible for everything from A-Z too. About the only thing I didn’t do was order the materials and schedule the crew.
After awhile, I did get involved in scheduling the crew too just because I wanted to make sure my customers got exactly what I told them I would be providing… I had to be extremely hands-on to keep my promises.
I’m just guessing, but you sound like you might be a lot like me. That isn’t unusual. A lot of us have Type-A personalities. We’re entrepreneurs at heart and know exactly what we want… and how we want it done.
It wasn’t difficult for me to find out about the job costs, I just asked. A lot of times, I lined up the gutters, drywall, fence repair, etc. Since I personally negotiated their costs and collected their invoices, I knew what everything was going to cost anyway. After awhile, I was able to figure up the costs within a few hundred dollars in my head without even looking at the invoices.
You’re probably running extra material out to the job sites too. If so, you see the invoices and know about what materials costs. Until you get to the point where you can estimate costs in your head, ask to see the job costs. Shouldn’t be a problem.
However, you have to be able to trust your roofing company to do right by you. There’s just too much to do to worry about every single dime. You can find 10 cents and lose 1,000 dollars for all the time it takes you to track it down. That’s why it is vitally important for you to trust your roofing company.
If you don’t trust your roofing company, you’ve got a problem.
One day, back in the summer of 1995, the owner of the roofing company I learned the business under came up to me (while I was working my way through a stack of insurance invoices) and said something I’ll never forget…
He said, “Mike, you’ve got to take time out of every single day to prospect. You can always hire somebody to help you do the $10 hour work. Invest your time doing the $100 hour work.”
I’ve never forgotten that.
Like you said, the most valuable thing you can do for yourself and for your company is to generate new business.
Nothing happens until somebody sells something. Anybody can be taught to answer the phones, type and fax out an invoice or file paperwork, but generating new business is what makes the world go ’round.
Janet, if you trust your roofing company, it has been my experience that it is better to stay where you are then to go somewhere else… until the day you’re ready to go out on your own.
Sure, you can find a roofing company where they expect a lot less from you, but there’s so many other variables to consider (e.g. business relationships, crews, financial strength, integrity, etc.).
One problem I’ve personally found is that they’ll say they take care of everything else, but then they don’t because it isn’t as important to them as it is to you. Guess who ends up taking care of all those little things then?
I did leave my mentor’s company and go work for another place for a short amount of time before starting my own company. Because I had learned how to do everything from A-Z at my mentor’s roofing company, I was shocked by all the seemingly fundamental things the new company didn’t know, wouldn’t do or couldn’t understand. It was so frustrating.
I really wished I had never left. The grass wasn’t greener, I just thought it was. I made less money, even though my commission rate was higher.
My commission rate way back in ’95 was a 50/50 commission split with 10% overhead… about the same as it is now for most established roofing companies. For example, our sales people work on a 50/50 commission split with a 5% overhead for self-generated jobs (door knocking, referrals, flyers, etc.) or a 10% overhead when we generate the leads for them.
Some roofing companies pay less… much less for rookies. Some pay more.
If you like and trust your roofing company, my advice is to ask them if they’ll get you some help. If not, find somebody you trust and pay them to help you.
Real Estate agents do this all the time. They focus exclusively on what they do best (make the cash register ring) and then they hire people to do everything else on a per-job or per-file basis. Build your own team and you’ll find yourself selling more and making more than you ever could doing it all by yourself.
Anybody who can sell 78 jobs in their first year is an amazing sales person. AMAZING!
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