B2B Cloud Based Product Selling

[Singaravelan T]

Hi All,

One of my friend, is planning to sell his B2B Cloud Based Product  in Singapore, Following are his queries , Can anyone help to answer the queries ?

1) Being a cloud solution, Is local presence necessary ? meaning does he need to have a local sales team/office here in Singapore ?
2) If so how does the sales commission calculation works in  price /user/month based revenue model ?
3) Is the commission a % of the total revenue or it is a % of price /user/month and approx what is that % commission in general

Thanks a lot

Cheers,
Velan

[Damian Thompson]

Firstly I am not a lawyer, so this is not legal advice.... but here goes.

1. It depends. How is going to sell the solution? Online only? Telesales reps in a different country? if he doesnt have to see his clients face to face to sell then no. For example my company headquartered in Singapore is not staffed at all. I do all of our selling via VoIP in whichever country I happen to be (Philippines now, Vietnam next week)

2. This question is unanswerable, what's he selling? what's his cost of goods? what's his tax situation? what are his competitors priced at? can he demand a premium because he has positioned himself as the better choice?

3. Again totally depends and you know the BEST thing about owning your own business? YOU get to decide. Personally I would never pay a % commission to salespeople. I think you need to assign them a sales target (quota) and pay them based on their achievement against that number. This way you can increase their target over time as the business gets more traction and you can bring the cost of sales in line.

DT