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Ultimate Bootstrap: I'm making $200,000+ doing Residential Sales

teabag

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I'm not debating that the lifetime value will exceed $1000, it might over $3000, but when you take into consideration all of the other costs involved I still don't understand how $1000 commission is charged. I'd definitely be interested to hear from Silverhawk on how they came to this figure, whether it is an industry standard etc..

Average salesman wage? Say $23 p.h?

If I was an employee I'd quit right away if I knew my boss was getting $1,000 commission for my 3 hours of work PER sale.

That'd mean I'd earn $69 on average for every sale I made, and my boss would make $1,000.

Am I missing something lol? That's quite impressive.

How much are your clients paying upfront once they've signed the dotted line?
 
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Kyle Tully

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Average salesman wage? Say $23 p.h?

If I was an employee I'd quit right away if I knew my boss was getting $1,000 commission for my 3 hours of work PER sale.

That'd mean I'd earn $69 on average for every sale I made, and my boss would make $1,000.

Am I missing something lol? That's quite impressive.

Yes he his paying them $700 per sale.
 

Silverhawk851

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I'm not debating that the lifetime value will exceed $1000, it might over $3000, but when you take into consideration all of the other costs involved I still don't understand how $1000 commission is charged. I'd definitely be interested to hear from Silverhawk on how they came to this figure, whether it is an industry standard etc..

If I was an employee I'd quit right away if I knew my boss was getting $1,000 commission for my 3 hours of work PER sale.
That'd mean I'd earn $69 on average for every sale I made, and my boss would make $1,000.
iAm I missing something lol? That's quite impressive.
How much are your clients paying upfront once they've signed the dotted line?


Was waiting for someone to ask this question, it was something I'd been asking myself and took me years to figure out.

How are these guys paying $1500 upfront to me and my sales team, despite the lifetime value being over $10K? Who would do that/ has that kind of a bankroll to float for so long?

After delving into the behind the scenes, what the company was doing was getting these contracts by having us sign people up, for $60/month, as rentals. The average customer stays for 20 years, that's 12 months x 20 years x 60 dollars = $14,400 Customer Lifetime Value.

What they do is take that contact, and sell it as a note for 50cents on the dollar to other private investors, VCs firms, etc, putting $7,200 in their pocket immediately.

Pay me $1500-2000 and pocket the rest.

In hindsight, all the guy really did was get a contract with the Furnace/AC manufacturer for wholesale pricing, hire a sales team and get contracts, hire a maintenance company just in case, and then just unload the contracts.

For every one sale the owner was making somewhere between $3000-$4000 almost immediately.

At the time, all the people in top management were driving a $150K car at minimum, trips to Bahamas every week. Didn't add up at the time...makes sense now.

I've actually had this contact end and have pivoted the focus for my online company on more online stuff these days.
Was a great experience while it lasted.
 
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Harry321

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Was waiting for someone to ask this question, it was something I'd been asking myself and took me years to figure out.

How are these guys paying $1500 upfront to me and my sales team, despite the lifetime value being over $10K? Who would do that/ has that kind of a bankroll to float for so long?

After delving into the behind the scenes, what the company was doing was getting these contracts by having us sign people up, for $60/month, as rentals. The average customer stays for 20 years, that's 12 months x 20 years x 60 dollars = $14,400 Customer Lifetime Value.

What they do is take that contact, and sell it as a note for 50cents on the dollar to other private investors, VCs firms, etc, putting $7,200 in their pocket immediately.

Pay me $1500-2000 and pocket the rest.

All the people top management were driving a $150K car at minimum.

I've actually had this contact end and have pivoted the focus for my online company on more online stuff these days.
Was a great experience while it lasted.

Thanks for clearing up.. I guess I underestimated the loyalty of the customers and how long they would stay with the company on average..
 
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Silverhawk851

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I guess I underestimated the loyalty of the customers and how long they would stay with the company on average..

It's not really a customers voluntary choice. Why? Thing is, here all these rentals show up on your gas bill, even though it may be that your renting from a 3rd party. To them it's just a gas bill. That's why they don't really care.

90% of people in Ontario rent their water heating equipment anyways, so it's not a uncommon thing here.
 

Kyle Tully

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The average customer stays for 20 years, that's 12 months x 20 years x 60 dollars = $14,400 Customer Lifetime Value.

What they do is take that contact, and sell it as a note for 50cents on the dollar to other private investors, VCs firms, etc, putting $7,200 in their pocket immediately.

Pay me $1500-2000 and pocket the rest.

Love it.

Most people never look past the initial transaction.
 

teabag

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Was waiting for someone to ask this question, it was something I'd been asking myself and took me years to figure out.

How are these guys paying $1500 upfront to me and my sales team, despite the lifetime value being over $10K? Who would do that/ has that kind of a bankroll to float for so long?

After delving into the behind the scenes, what the company was doing was getting these contracts by having us sign people up, for $60/month, as rentals. The average customer stays for 20 years, that's 12 months x 20 years x 60 dollars = $14,400 Customer Lifetime Value.

What they do is take that contact, and sell it as a note for 50cents on the dollar to other private investors, VCs firms, etc, putting $7,200 in their pocket immediately.

Pay me $1500-2000 and pocket the rest.

In hindsight, all the guy really did was get a contract with the Furnace/AC manufacturer for wholesale pricing, hire a sales team and get contracts, hire a maintenance company just in case, and then just unload the contracts.

For every one sale the owner was making somewhere between $3000-$4000 almost immediately.

At the time, all the people in top management were driving a $150K car at minimum, trips to Bahamas every week. Didn't add up at the time...makes sense now.

I've actually had this contact end and have pivoted the focus for my online company on more online stuff these days.
Was a great experience while it lasted.

Thanks for clearing up.. I guess I underestimated the loyalty of the customers and how long they would stay with the company on average..

Ok I understand now, but yikes to the 20 year contract. Is your business going to be running in 20 years? In Australia a 20 year contract would be illegal. What happens if the client dies?

Also what is the age demographic of your clients? I've heard of a similar business model to yours (completely different fields) where the business was pressure selling older people into deals, with the incentive of them saving lots of money in the long term.

Lastly, have you asked why your customers they're cancelling? 60-40% cancellation rate is huge. What measures are you implementing to reduce this?

I'm in no means doubting your business or success (my questions look hostile but aren't) - I'm just thinking of ways to mirror your business structure into other fields.

Cheers!
 
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jcaldwell85

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It's not really a customers voluntary choice. Why? Thing is, here all these rentals show up on your gas bill, even though it may be that your renting from a 3rd party. To them it's just a gas bill. That's why they don't really care.

90% of people in Ontario rent their water heating equipment anyways, so it's not a uncommon thing here.
Love this thread. My husband and I have secured a contract to do marketing for an energy company but we will be paid $110 per lead, regardless of if they cancel, reschedule etc. Hoping to accomplish a decent speed, we're getting everything finalized on Tuesday :)
 

pickeringmt

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Read this article

Thanks for sharing this, very cool stuff

Inspiring thread also, killer. Congrats on your success man - I look forward to seeing everything develop for you
 
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Ubermensch

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My turn to add the little value I can to people's lives!


I've recently been making decent change while I bootstrap some capital together to start up and fund my fastlane venture.

I have decided I'm going to be a big player in Real Estate and a couple other businesses, but all requires capital; bills have to be paid, and you can only grow as fast as your spending ability allows.

After doing all the whining and complaining, I realized 0 people who give a damn about my ambitions.

So I began venturing and scanning my surroundings, canvassing my network for opportunities that will pay me well.

And if you search long and hard enough, something will click.


I approached an HVAC energy company in Toronto, got a contract as a marketing company, doing residential sales for rental HVAC equipment. Door-to-Door.

I told them I can increase their sales by X amount, and it can be only straight commission. Pay me once the services are sold and installed. Luckily my company had a lot of employees leave for holidays, school, etc, which opened up a need.

I've set it up so that our service allows customers to upgrade any old furnace or AC without paying a dime out of pocket, and offset costs on their energy bills so they stay exactly the same.

Their net cost is ZERO dollars.

best part is that I get paid over $1000 for every deal I sign and have hired close to 10 guys at this point.

The average guy closes 2 deals a day, in 6 hours of knocking doors, that's 3hrs/deal. 10 guys doing 2 a day, thats 20 deals a day.

There is a however a cancellation rate, where some deals will get cancelled, say 60%.

Still 12 deals a day. I.e. $12,000.

Some days the sales are low, some days high, some days average.

Guys are making $200,000 to $800,000 a year doing this. It's not the easiest job in the world, but $250,000 beats the crap out of $40K retail jobs with the same hours :)

Not to mention I can talk my way into, out of, inside and over anything. And I used to think picking up girls was hard :rolleyes:Lol


I want to note that this is tough for me to write, because of the slowlane but justified fear of "increasing competition", but hey somebody introduced me once, and maybe I can someone improve their life.

Feel free for questions.
*Please refrain from questions too direct regarding who I'm working for, I am under contract and cannot answer.

I didn't know who you are until @Thiago Machado linked me to this thread.

Great stuff.

The United States market is prime for your company's type of offering, especially in high-priced electricity states, like California.

In California, folks pay over 20 cents per kWh.

That's WAY higher than Canadian electricity prices.

In other words, they have a lot more to save.
 

JAJT

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To add to SilverHawk's message about buyer ignorance - it's totally true.

I live in Ontario and you could put a gun against my head and ask me if I own or rent the water heater or furnace and I'd probably wimper "own" but that's a total guess. I'm going to go check that out right now :)

Keep in mind what he's doing is also HARDLY rare here. I get salespeople knocking on my door every damn week that follow the same basic principle - "It won't cost you anything, we'll save you money, if we can just come in and inspect....".

Furnace and water heater salesmen are here every other week. The popular one right now is "at the source" water filtration units. Stops nasty "chemicals" from entering my drinking water which would otherwise poison my children and probably kill the neighbors dog if I leave the sprinkler on (that's a joke but they DO lay it on that thick). Luckily I'm eligible for a free installation at the low monthly rental rate of... :p

All three of these groups practically storm the house trying to get inside to talk about this stuff - I have to basically block the door entrance with my body or they'll end up inside my house. It's ridiculous as a customer but it tells you how hard it is as a salesperson.

Personally the sales guys I love the tactics for are the driveway asphalt repair guys. Their value and proposition is immediately tangible and low-stress. Before they even knock on the door they have a filled out, custom quote in their hand for the cracks in my driveway. Goes something like "Hey, we'll be in your area next week doing all your neighbor's driveways so you get a special group discount since we're doing the whole street. You've got 4 cracks in your driveway we can fix for this amount if you are interested. Also the company makes me say that this is only good for when we're here next week - if you call us after we've left it costs a lot more to re-bring the equipment and staff out for a one-off order...". I've considered signing on the spot with those guys every single year with how slick and awesome they make the process but luckily I care more about money than the quarter inch crack in my driveway :)
 

Silverhawk851

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The United States market is prime for your company's type of offering, especially in high-priced electricity states, like California.

In California, folks pay over 20 cents per kWh.

That's WAY higher than Canadian electricity prices.

In other words, they have a lot more to save


I agree, US is a HUGE market.

Especially the northern cities, close to the border where it's pretty much Canada-cold.

I've been out of this space for a while,
(in the search for better way to get customers I got turned onto paid traffic
and it's been gravy since hah)

But most of the companies are breaking into US now
and the Banks have started buying the notes

and on top of that,
Seeing how profitable it is,

I agree with @JAJT , water purifiers is the new thing.
They are doing the exact same model

Put people on contact for x years,
bill them through their gas bill
sell contract to bank/fund
pay out sales rep
pay out installation+unit cost
and cash out couple Gs immediately

Like @JAJT said,
Thing is,
this industry has gotten alot more shadier and scammier since then
I've been hearing some super shady shit where people walking in houses with these fake badges haha

Glad I learned what I did and got out,
Was a means to an end for me

Now I just do lead gen for them and get paid commission per lead sitting at home :)
 
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