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Commissi0n Rates In Retail Furniture Stores

Posted By C0nstance, 7/25/2008

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Larry, I read your article in Furniture World magazine about variable rate commissions. Exactly what is the industry standard for flat rate commissions? I was recently offered a job as a “design consultant” with a furniture store at 5% flat commission on furniture sales and 6.5% on accessories. Is this a standard? It seems rather low to me. My sister makes around 10% on sales in a design firm with a furniture showroom.   I assumed rates would be higher in a metropolitan area and was surprised.

Your thoughts? Constance


From Margarite, 2/24/2011  1:18 AM

What have most stores done in this economy to adjust from the lower sales volume of previous years?
Are stores hiring more salespeople?
Is taking a commission rate down 1% to the salespeople common?
Thank you.

From Mike Oldfield, 1/27/2009  5:14 AM

A missing part of the equation is also

1. Protectin plan sales commissions of 5% to 50% can rsult in figures if you can pump enough volume
2. Bedding spiffs can result in thousands of dollars a month again based on volume

My experience with three top 100 retailers

5% on gross
5% on gross
10%,11%, 12.5%, 13.5%, 15% on net dependingon volume

15% kicked in at %15,000
minimum expectation was 12,500 per week

SOme retailers also penalize for long term fiancing discounts.

I have also seen an incentive for converting from a credit card to a debit card discussed to save about 2%.

Mike Oldfield
Author of "Retail Furniture Selling Techniques"

From Russell B. Right, as usual, 7/26/2008  2:34 AM

Flat rate is better than some inclining percentage, where people will find a way to maneuver sales in a way that benefits THEM not the CUSTOMER. Very bad.

Some high volume stores pay 3%, but the sales people average $100,000 income a year. Some high end, lower volume, high margin retailers pay 12%.

Like our host says, it's how much you can expect to make in a year for the time you put in. The way its calculated just doesn't matter. Be sure to find out how much the Top Writer makes, and realize you are unlikely to exceed that right away.

Hint: From DAY ONE keep track of every customer, get contact info, follow-up, and WORK HARD to generate your own traffic. Let every in-store action show YOU CARE ONLY ABOUT THE CUSTOMER, and WHAT SHE WANTS.

From Russell at Furniture World Magazine, 7/25/2008  1:19 PM

Hello Constance, I've fowarded your inquiry onto Larry Stark. I believe that he is still doing some consulting for PROFITsystems.

My feeling is that it isn't so much the raw percentage rate that matters as what you might expect to earn.

If there are several salespeople in the store, I would want to find out the range of sales volumes those salespersons made over the last year. At least, I would like to get the highest, the lowest, and the median sales volume.

You may not be able to get these figures, but it couldn't hurt to ask.

If the store has good traffic, and the salespeople have excellent close ratios and high average sales, then you will be better off with 5% than if you were working in a store with poor retail fundamentals.

I've also posted your message to the furninfo.com site so that our readers can respond.

Let me know if this helps.

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