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HELP!....Looking for experienced opinions on my situation...

post #1 of 14
Thread Starter 

This will be a lengthy post but I encourage anyone that wants to chime in to please read the entire post before replying.

 

 

After having a few years of experience in sales I decided to take on a position as catering sales for a small organic Asian restaurant. The focus would be on catering for corporate lunches, meetings, parties and eventually bigger events. I would be paid a small flat rate and 20% commission on all orders. 

 

First thing that caused concern was the catering contract that he had devised. All orders would be subject to a 20% "service charge" which I was told was to cover transportation, trays etc. Added to that would be a 15% gratuity. He maintained that these fees were to cover "my end" so that he still could be profitable. Even though I had never been in the catering business I knew that this sounded ludicrous but I let it go cause I wanted to make it work. 

 

First client(huge corporate company) I acquired did not want to pay for service charge, to which my boss agreed. The client left a 8% tip(on a 300 dollar bill) to which I assumed belonged to me. I was wrong. He mentioned that I am already getting a commission so I shouldn't be getting a tip, and since they didn't pay for service charge this went to transportation etc

 

I know negotiated with the owner that we were going to charge a 15% delivery fee, but even that was insane to calculate. Why would someone pay 45 dollars on a 300 dollar order? 

 

This week I got a huge break. Only 2 months in I secured a 250 person boxed lunch, different than our regular tray service, an order that was 1800ish with tax. Such an order the owner could only dream of before I came along. I needed to rent a cargo van to transport all these lunches(50 bucks) and needed to individually label them which costed 50 bucks. I tried applying the 15% which came to $253, but she balked at the total and said that she could only afford to pay 2k thus lowering the charge to 170ish. Added to the fact we had to box all the stuff and unpack it at their location. The client didn't even tip. 

 

My owner is now saying he is unable to pay my commission. He states that all this additional costs and extra time spending making different boxed lunch variations made him lose money on this deal. He can only pay me 10% which would be 168 of the original 337.

 

My questions are:

 

1. Am I nuts or is he an idiot to expect people to pay 35% on top of their order, because every friend and client I have had has rejected doing so.

 

2. He says his food costs are 34% which I know are a bit high. Is he telling the truth that he cant afford paying me or is he bullshitting me?

 

 

Any additional opinions are welcomed.

post #2 of 14

Service fess in offsite catering are standard practice....18-20% covers shtuff

delivery charges are either added into the cost of doing business or a nominal fee

Tips in my mind are just that....optional.

 

It'd be good if you & your employer could figure out a win-win situation.   One where both of you are making money.  

cooking with all your senses.....
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cooking with all your senses.....
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post #3 of 14
Thread Starter 
Quote:
Originally Posted by shroomgirl View Post

Service fess in offsite catering are standard practice....18-20% covers shtuff

delivery charges are either added into the cost of doing business or a nominal fee

Tips in my mind are just that....optional.

 

It'd be good if you & your employer could figure out a win-win situation.   One where both of you are making money.  

 

When you talk about offsite catering are you including when I just drop it off? When they are in trays I just set them on a table or in the 250 boxed lunches case I just unpack and set them on a table. 

 

I'm not bashing but how do I justify to a client that a charge of 253 dollars on a 1800 dollar order is perfectly fine? No other deli or company i.e. Cosi, Cafe Metro or any corporate place in Manhattan charges a delivery fee that high. I explain that it covers transportation, extra man power, time etc but not 1 client I have had has accepted this. Why?

post #4 of 14
I always go back to original contract.

He agreed to 20% commission on all orders. Period.

You are a sales rep. You are getting him new business & more repeat business. That's your job.

Next

20% of what?
Net sale? Gross sale? What was the fine print?
Whatever was agreed, written contract & signed...that's it. I stand firm with contracts. If it wasn't a laid out in detail from get-go then you need to move on. This guy will take your knowledge & never pay your worth.
Signatures, dates.
Please tell me u have a copy.
post #5 of 14
Thread Starter 

No contract. I don't expect to stay here long. I have been looking to on various job forums for a new job and I just want to acquire clients while I am here so I can have a decent client list and work for  REAL businessman. 

 

I agree but my job is to get the 15% for service charge as well which I didn't. He was satisfied with the order being the way it was hoping that she would at least tip but didn't. I agreed to pay for the labels(50 bucks) but other than that I want the rest of commission. 

 

20% of all gross orders minus tax,tip and delivery charge obviously.

post #6 of 14
YOU paid for labels?

Why?

That's what petty cash is for

I think they are taking advantage of you
post #7 of 14
Thread Starter 

I paid for the labels, train fare, but I send an invoice end of week and get reimbursed.

 

If I could get more input on this 15-20% service charge deal and how to handle clients that order all of the stuff and expect not to pay for the added cost and time that it involves I would appreciate it.

 

I just cant see myself walking away from a 2k order that someone wants to order on a weekly basis even if it means I have to take less for it. My base salary is so low that I cant expect to reject jobs like that.


Edited by mrsweetpotato - 11/30/12 at 6:50pm
post #8 of 14
Unfortunately that's the standard

The definitive part would lie in a written contract....your 20% commission is the gross SALE. That does not include tips, delivery, hidden charges unless specified in written contract.

I always write a contract.

Write your own, bring it to owner & come up with something you're both happy with.

Owners have overhead...their brains are on bottom line and their profit. Spell out how you are making him profit while getting the $ you want. Simple as that. But lay it all out on paper.
post #9 of 14
Thread Starter 

2nd week of being on the job he told me that he is operating in the red and barely pays invoices yada yada yada. I thought he was scheming me but how unwilling he is to budge I don't know. 

 

Okay. If you say its the standard then I guess I am going to have to differentiate myself to my clients by explaining that I am not serving deli sandwiches and salads but rather organic Asian cuisine. 

 

Contracts mean nothing. Having spent 1 1/2 years in law school and countless hours in landlord tenant court they are just paper and are broken every time. 

 

Thing is I haven't had experience working on commission in catering to know that if you are getting paid a base salary+ commission are the tips usually part of the deal. 

post #10 of 14

1) While I dont know exactly how he's calculating things, 34% food cost on 250 lunches is about 2.45 per person,

which I dont find unrealistic.

 

2)

 

Quote:
It'd be good if you & your employer could figure out a win-win situation. One where both of you are making money.

I concur completely . Whether or not he's in contract breach on your commission depends on what your comission is

based on. Gross sales? Net profit? Etc, and how it's worded. Regardless, if the current agreement is not protecting the

work you do, I suggest you both go over it and change the wording (usually means ADDING wording) to serve both

your interests and avoid misunderstandings. And to protect you from feeling cheated.

 

3) I think you have a right to be told and to understand, how he is calculating costs, fees, delivery, svc charge,

food costs, fixed costs etc. (and  your commission is also one of those costs) This is in his best interests as

well--if you're in the dark you cant explain it to the client, which causes dissent and distrust--neither are

conducive to referrals or return businesss. He may consider some info "eyes-only" confidential--that's

expected, you just need to know about what the clients are likely to question.

 

4) The company I started out with and learned the businesss from also charged a 20% service fee. And several

clients had a problem with the fact it was not explained on the invoice, and that it was added in after all of the

charges listed that they considered themselves already paying for.

But the interesting thing was, the company was charging WAY below the competitive catering rate--

about 2 to 3 dollars per person less. So even though the client KNEW they were getting a steal, they'd

complain because they didnt like the way it "read" on the invoice. (And I suspect many thought it was a

"hidden" mandatory gratuity) I tried to get them to change it--they refused--after all it was ME that had to deal

with it. And I believe it cost us a LOT in lost tips.

 

5) To an extent, certain costs are more or less fixed, like delivery charge within a radius, or per mile etc.

rather than directly related to number of people, or the overall contract price.

And we all must have our minimums on things like delivery, service fee etc.

I have no idea what his costs are or how they're being figured, so it's tough to have an opinion

as to whether or not he's being unreasonable. But if he's including things like xtra manpower/time etc

in his delivery charge, I think that's a mistake, it's best to keep that charge as "pure" as possible

and not lump other fees in with it. Itemizing is what keeps people happy. And it sounds like the clients

aren't "buying" your explanation anyway.

 

 

 

ETA:

 

Quote:

Contracts mean nothing. Having spent 1 1/2 years in law school and countless hours in

landlord tenant court they are just paper and are broken every time.

I didnt realize you felt this way, I started this post a while ago and dint see some of the new ones.

 I would never work on commission without a contract specifying how and what I get paid.

post #11 of 14
Thread Starter 

1. If I ask for everything to be laid out and he refuses, how should I react?

 

2. So you think I should make it 5% tip, 5% delivery, 5% added manpower etc ? Then I feel it leaves us open to the client to pick and argue even more over each charge. 

 

I asked him to redo the ala carte menu to already include the 15% considering the prices(less than $7 an entree) is way below what is charged in majority of Manhattan but he refuses.  

post #12 of 14

1. If I ask for everything to be laid out and he refuses, how should I react?

Assuming that in addition to asking him that, youre telling him why, that its to keep the clients happy

and not looking elsewhere for a caterer....Id say if he's gonna be so stubborn with such a proven

valuable resource like yourself, then he's not being so smart. I think sooner or later youre going to

have to take charge of your own job here with him--youre making HIM money. And in the absence

of a contract, it all relies on your relationship to him--including trust. From what youve said, Im inclined

to agree with Eclair4me above.... youre going to end of being taken advantage of.

So the answer is....I think you should "react" in accordance with how much you agree or disagree

(with him not me) and how important it is to you to continue working for him.

 

2. So you think I should make it 5% tip, 5% delivery, 5% added manpower etc ?

Basically.....yes. If youre billing for it, list it.

 

Then I feel it leaves us open to the client to pick and argue even more over each charge

Not sure I understand your thinking here. We're talking about a client arguing about what appears to them

(and by your own admission, you) an exorbitant delivery charge--if you itemize and separate the charges,

assuming all three would now be more reasonable, then that issue is solved.

If the client wishes to argue about the separate charges... well that's another issue.

 

I asked him to redo the ala carte menu to already include the 15% considering the prices(less than $7 an entree)

is way below what is charged in majority of Manhattan but he refuses. 

 

Let me get this straight. He's charging way below the going rate, refuses to change it, then tells his sales rep

who's bringing in viable new business he cant afford to pay him? Sounds like he can't afford the sales rep.

post #13 of 14
Thread Starter 

Pretty much. He told me 2nd week of working there that he is in the red and barely gets by. Whether he is lieing or not I think I sold him so much on the interview he had no choice but to hire me.

 

He was even complaining about the fact that the client picked rice that took a bit longer to prepare over the easier white rice. He is not accustomed to the size of business that I am bringing and cant emotionally handle it I see. 

 

An excerpt from his email

 

"You are giving away the farm, over selling. The contract is simple. Brown rice
should have been the default starch for that many box lunches. If they want to
add a noodle or rainbow rice an up charge should be added. Hook them in on the
basics and up sell from there."

 

 

So basically now he wants me to charge extra for items that are listed the same on the menu. Is any client going to agree to only having one type of rice for 250 boxes? He has never brought that up before and I am thinking he just wants things as simple as possible. Everyone on here knows that for a simple request like that you should be able to accomodate. He also mentions that he has to pay his workers " a little bit extra" besides their salary for coming in 8am. Everyone should be happy that more business is coming in not upset by it.

 

He wouldn't be this upset if she actually paid the 20% obviously. 

post #14 of 14

The excerpt from email is actually not inaccurate when he says hook them on

basics and sell up from there. Problem is, if the client sees a double standard there

on the rice as you said, then he either needs to get the menu and catering menu in sync

or justify it another way.

 

Sounds to me like he's running this catering part too close to the wire.

The things he's mentioning: extra rice time, extra time for workers etc, should

all be written into his price, including his profit.

When you do it wrong, your profit suffers first. If he's actually running in the

red on this, he should give it up until he figures out what he's doing wrong.

Because wrong it is.

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