It would most likely be against the Salesman’s terms of employment, but would the following be illegal for either or both participants.
Customer offers some money directly to the salesperson in order to get the best possible price on purchasing an item.
This would bypass the commision calculation, in effect giving the salesperson 100% of a small sales markup commision. So the customer and salesperson win at the expense of the company the salesperson works for.
Would this bribeing of the salesperson be illegal? Does this sort of thing go on?
(Full disclosure, anyone following other threads I have written to might know I have been looking for a replacement car. I have allready bought that car, and did not try any underhand dealing like that mentioned in this OP. The experience though led me to wonder if the sort of thing happens and if it is legal .)
What you’re talking about is called “under the table.” I come from a long line of salespeople and can attest that it does happen (not by my family – my father taught us all that small-time chiseling causes nothing but trouble.)
Although usually, it’s the other way around – the salesperson gives the customer some kind of incentive for the business. That’s called a “kickback.”
As to the legality of it, it depends. You absolutely positively would be forbidden to do it with government contracts, where any deviation from the official bid process starts to drift into the nasty legal area “bribery of a government agent.”
With private organizations, I doubt if it’s illegal, but it will definitely get the sales agent fired, and the purchasing agent, if it’s a company-company deal.
It was from reading the Edmunds article about life as a car salesman. They seem to be commision only. Also they get in trouble for not selling enough cars, even if the profit is low. Finally the salesperson gets only about 10% of the profit as commision. The math looked to me like this for a $10,000 dollar cost car.
Salesman sells it fo $11,000, =$1000 profit of which salesperson gets $100 commision
If the salesman sells it for 10,300 = $300 profit salesperson gets $15 commision (commision rate is lower for low profit margines). But salesperson gets $100 under the table. The salesperson ends up with more money, and an easier sale. Customer saves $600.
If tax was payed propperly on the second deal, would any part of that deal be illegal?
In my experience the guys selling ads for magazines do this sort of thing all the time. I’ve seen televisions, beds, linens, and whatnot change hands for making ‘relationship’ pricing happen on ad space.
In the short term it may be profitable for the salesman. But pretty detrimental to his job. He’ll have a lot to explain why his sales are unprofitable and the boss will unload him fairly quickly.
