An exclusive report from Advantages® magazine, published by the Advertising Specialty Institute of Trevose, PA, says competition from online sales is cutting into profit margins and the average incomes of promotional products salespeople, despite a rise in overall industry revenue.In “Fixing the Funk,” Advantages provides distributor sales reps with a seven-point plan to counter negative trends and increase earnings, such as focusing more on referrals and upsells and selling value versus price.
“As our report shows, until just recently, salespeople in our industry were earning far more than the average American and enjoying moderate to very good salary boosts each year,” said Advantages Editor Dave Vagnoni. “To help sales reps regain their earnings momentum, our June issue provides specific steps they can take starting right now to adapt to the changes impacting our industry.”
In 2015, following three years of increases, average annual earnings decreased by about 1% in 2015, according to an exclusive compensation report in the June issue of Advantages magazine.
In “Fixing the Funk,” Advantages Senior Writer Christopher Ruvo (@ChrisR_ASI) attributes the earnings dip to greater competition from online prices and the ensuing drop in profit margins, with distributorships increasingly giving salespeople 30% or less, versus the standard 50/50 profit split.
In 2014, e-commerce accounted for 16% of distributor sales, or $3.44 billion, with some of the fastest-growing, highest-revenue-generating distributorships now operating on Web-driven models.
Furthermore, says Ruvo, some distributorships are now holding on to a greater portion of the profit because they’re providing additional services and supports to sellers – measures they say are necessary to keep sales pros in the game in a tech-disrupted, highly competitive marketplace.
The annual Advantages Compensation Study shows both average and median monetary compensation for sales reps and managers declined 0.88% to $82,361 and by 1.8% to $55,000, respectively, in 2015. At the same time, total distributor sales increased by 3.4% in 2015, marking the sixth consecutive year of annual growth.
The Advantages report also points out that:
- Sales reps’ average annual earnings in 2011 were $72,000, meaning the 2015 average was up more than $10,000, or 14%, from four years ago.
- 43% of sales pros report that they work from home part of the time in 2016, compared to 38% in 2015. One-third of sellers say they work from home all the time.
- 87% of sales reps and managers say they are happy where they are and are not looking for a new job. MORE INFO