Hi Jeffrey. I've been around since dirt and am the "ghost" author of that article back in 2004. The one article by me that Russell sent you a link to us actually mis-titled, because it was meant to be about EARNING $50,000, not SELLING $50,000.
If you have salespeople earning at that level regularly, then you probably can skip reading it, but if you would like to have such a staff, then you should change your sales management focus to their goals and manage around only that - and let YOUR goals take a back seat. How you pay is a matter of what you believe is right. Salespeople are paid to close good quality.
Paying on Gross Margin is, a good barometer for the merchandise department, but if you allow salespeople to discount, I think that's a mistake from the get-go. There's always the difficult balance between advertised price (SALE price) and profitability - but that's a difficult thing for salespeople to navigate. Just pay on written business that clears financing, and has required deposits, and delivery dates - or some such safeguard.
Sales managers need to manage the team like a football coach - in-the-game, on-the-floor, all the time. It's all you have going to generate sales revenue and , eventually profits.
Track close ratio and average sale but do not pay on those things - they are personal sales effectiveness stats that are the only two things salespeople have control over. Tack them daily and cumulativly every day, week, and month and look at the range-or -performance from highest to lowest in each stat. Then, make you managers accountable for bringing the people who perform below average, up to average - so your average goes up and their income-per-opportunity goes up too. Leave margins up to marketing, merchandising, and buyers.
Joe Capillo
Top Line Strategies