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Commissions and percentages to distributors and salesreps

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Anonymous

I've read on these postings that distributors generally receive a 40% discount and retailers a 50% discount, but is there an acceptable commission paid to a salesrep who sells direct into large retailers (Toys R Us, Wal-Mart, etc)?

Zzzzz
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Commissions and percentages to distributors and salesreps

Though I am far from an expert at the business side of the world, I would treat the sales rep as a distributor. They are basically doing the same things as a distributor, so unless you want o make a special offer to help get you product out the door, I think distributor cost should be acceptable.

PS: Sorry for the long delay, many of us on the site are design oriented. There are a couple (such as myself) the attempt to hit the self publishing side of the industry, but I have been busy with RL items these days.

Anonymous
Commissions and percentages to distributors and salesreps

While there will be exceptions, expect a distributor to want (and require) a 60% discount, then they will sell to the retailer at a 50% discount, who will then charge retail.

In other words: your $30 game a distributor will want to get for $12 per unit -- and that's after you pay to ship it to that distributor.

Anonymous
Commissions and percentages to distributors and salesreps

Looking at it from another angle, a retailer needs to at least double ('keystone') your wholesale price to arrive at their selling price, so if you are selling it at $10, a retail store will need to sell it for $20. That being said, a distributor needs to get a discount off of your wholesale cost so that they can sell it to their accounts at $10. You usually give them a markdown of 20% to 35% of your wholesale price, depending on quantity. The plus side is they order in quantity, you don't have to worry about collection issues for small accounts, and they warehouse your goods.

A sales rep visits accounts on your behalf and write orders that are forwarded to you. You ship and worry about collections. A sales rep should be 10% to 15% of the written order. If any large accounts are asking for significant discounts off of your wholesale price, then the sales rep will generally give up part of their percentage to help you meet that discount.

Hope that helps.

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