DRAFT
Distributor memo # 01-014
To: All Mohawk Distributors
From: Steve
Re: GSA Commissions, State Contract Commissions & National Account
Commissions
Date: September 17, 2001
Occasionally we need to re-inform existing Mohawk reps, or confirm to new(er) reps how these commissions are broken out & compensation goes to you as the area rep. This memo refers to distributor memo #99-026A
dated 10/99.
To receive commissions, a 24 lift minimum sales on a pro rate basis is needed.
GSA SALES (any Federal Agency)
#1. Orders are to be placed with Mohawk, as Mohawk is the holder of Federal GSA contract
#GS07F-7099B. Mohawk is the GSA contractor, and we are responsible for reporting
our quarterly sales & paying a quarterly fee on all GSA sales. If your company invoices
GSA, we’re unable to report the correct sales figures.
#2 Mohawk pays a 5% (of list price---not wholesale cost) territorial sales commission for
GSA business that goes into your territory.
#3 Mohawk will pay up to10% on some lifts of GSA installation price to the territorial representative
(you.) No, we can’t charge 10% on all lifts as that’s unfair to our (your) customers as well.
#4 If you have the lift in your inventory, we can offer to “turn your inventory”
faster, by accessing the lift from your stock at the purchased price and issuing a credit to poor accounts.
Most GSA sales are installed sales. Given that, you’re already driving to the
Facility to install the lift, Mohawk will also pay a courtesy delivery fee of
$100.00. If you’re not delivering from you inventory, Mohawk will ship
directly to the GSA buyer. Either from your stock or shipped directly from
the factory, Mohawk will give you a choice as to access or not access your
inventory. You’ll have 24 hours to get back to us with the decision as to
which inventory (your or ours) is being accessed
If the bookkeeping department doesn’t receive a signed sheet from you identifying whose inventory (yours or ours) the lift is to come from, then the lift(s) will ship from the factory. Enclosed is a sign off sheet authorizing whose inventory the lift(s) will come from.
GSA audits Mohawk annually for our business practices, commissions & to verify that the GSA is doing business with a financially stable company. There can be no variances from the above policies.
Attached is a sample memo from a typical GSA sale.
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DRAFT
STATE CONTRACT SALES
If your state has a state contract, we’re sure you know about the program. These programs are more profitable to Mohawk Distributors; as Mohawk isn’t audited by the state re: commissions paid to area reps.
#1 Orders must be placed with Mohawk as Mohawk is the state contract holder and we’re
responsible for reporting annual state sales. If your company invoices the state, we’re unable
to report the correct sales figures. In one state, while Mohawk held the contract, the business was
being written to the Mohawk rep. When this happened, and Mohawk asked for a contract
modification (adding new lift to the contract) the state refused citing “contract inactivity”
and threatened to cancel the contract as too small a sales figure was being reported …
Therefore,purchase orders must come to Mohawk!
#2 Mohawk pays the entire territorial sales commission for state business that goes into
your territory. Commissions are determined by subtracting your wholesales cost of the
lift from the state contract sales price. Simply state, if you “buy right” (at the deepest
discount) your commissions will be better.
#3 Mohawk will pay up to 10% of state contract installation price to the territorial rep.-you.
#4 If you have the lift in your inventory, we can offer to “turn” your inventory faster, by accessing
the lift from your stock, at the purchased price via a credit to your account. Most state sales
are installed sales. Given that, you’re already driving to the facility to install the lift; Mohawk will also pay a courtesy delivery fee of $100.00. If you’re not delivering from you inventory, Mohawk will ship directly to the State buyer. Either from your stock or shipped directly from the factory, Mohawk will give you a choice as to access or not access your inventory. You’ll have 24 hours to get back to us with the decision as to which inventory (yours or ours) is being accessed. Also enclosed is a sign off sheet authorizing whose inventory the lift will come from.
If the bookkeeping department doesn’t receive a signed sheet from you (again, within 24 hours) identifying whose inventory (yours or ours) the lift is to come from then the lift(s) will ship the lift from the factory and freight charges for single units will consume a larger part of your commission.
#5 Regarding the cash discounts that you may take when paying Mohawk (but are not offered or
taken by government buyers) we can only include the 5% cash discount as part of your commission
when the government buyer uses a Visa card to buy the lift (immediate payment to Mohawk.)
However, as Visa cards cost Mohawk a 3% processing fee, the 3% fee will be deducted from
The 5% cash discount, which still leaves you 2% “ahead” on a lift that’s purchased under
30-day payment terms.
NATIONAL ACCOUNT SALES
National Account sales commissions are based on the pricing the factory has established with each individual National Account. As in the two previous examples;
#1 We try to access (turn) your inventory.
#2 We pay the $100.00 courtesy delivery fee if from your stock.
#3 We get what we can from installations.
Basically National Account commissions break down to the differences between sales price (possibly less freight cost) and your wholesale cost.
Some National Accounts are better than others. If you don’t buy TP-15’s “right” or stock them, then American Medical Response isn’t a great deal. But, if you do…it is! While U-Haul isn’t the juiciest deal, the equipment buyer at U-Haul once sold Mohawk, knew the discount structure and wasn’t about to buy 100 TR-25’s from anywhere but on a factory direct basis. Again, some National Account sales are great, some are just good. Yet they’re all profitable and all lead to a Mohawk being installed rather than brand blue (which leaves Mohawk reps with nothing.)
Attached is a sample credit memo from a typical state sale. Obviously, there is a big difference, but
As discussed, Mohawk is not audited by the state contract while we are with GSA. Simply stated, the commission is the difference between cost & state contract pricing.
If there are any questions regarding Federal GSA or State contract prices or sales commissions, please call.
Thanks.
Steve Perlstein
CC: Rick Wells
Mary Minkler