Pacific Medical Supply

In: Business and Management

Submitted By insafarthur
Words 2692
Pages 11
Sales Management Summer 2015
Case Study 1

Pacific Medical Supply: Hiring, Motivating, and Retaining Good Salespeople

Jim Shine had some big problems on his hands as the owner and sales manager of Pacific Medical Supply Company. But these are the types of problems owners of a successful small businesses like Jim like to have. Jim problems involved his most junior salesperson, Nicole Landis. Nicole’s impact on Pacific Medical Supply’s sales was huge, despite the fact that the company hired her right out of college. The specific problems Jim faced as a result of Nicole’s extraordinary sales efforts involved professional jealousy among his sales staff, the discovery of an out-of-whack sales commission structure, and a customer service department that was tired of being dumped on by the salesperson they nicknamed the “land shark.” The company’s sales commission structure is as follows:

Pacific Medical Supply Company pays a commission on customer orders placed based on the tiered commission rates on the chart below.

[pic]
Example: Monthly sales of $120,000 would result in a monthly commission of $10,500.00 ($100,000 X .085 + $20,000 X .10). This commission level, if sustained, would equate to $126,000 in annual income.

Note: If all the orders were new business, $1,200 per month, or $14,400 per year would be added to the salesperson’s commission.

Pacific Medical Supply’s Sale Commission Structure

• Commissions are paid on each month’s sales orders by the 5th day of the following month • One percentage point is added to new business for a term of 12 months. New business is defined as an account which has not placed an order with Pacific Medical Supply for a two-year period • If an order is placed by one account, and the product ships to an account of another salesperson. the commission is split 50/50 between…...

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