Designing a sales commission plan for a building products BDM in Australia

By James Bowesman, Specialist Recruiter, Specified Select Group

At Specified Select, we see the same pattern every quarter. A manufacturer hires a BDM. The plan looks reasonable on paper. Eighteen months in, the BDM walks. The plan, the team and the client all blame each other.

Most building products comp plans are paying reps for the wrong job. The structure was built for a sales cycle that doesn’t exist in this market.

Below is the design pattern we’ve seen work for our manufacturer and importer clients in lighting, building envelope, civil, interiors and chemicals.

Why is building products comp harder than other B2B sales?

Because the cycle is long, the credit is shared, and the revenue arrives in waves the rep can’t time.

Five things make this category specific:

• The spec cycle runs 6 to 24 months from architect engagement to product on site. Most comp plans pay quarterly. The mismatch is structural.

• Channel mix splits the credit. The spec rep creates demand. The channel rep takes the order. The plan needs to recognise both.

• Territory inheritance is real revenue. New BDMs inherit between $1M and $4M of legacy specified product flowing through the wholesale channel. Pay them on territory revenue from day one and you’re paying for someone else’s work.

• Margin spread is wide. Pay flat percentage on revenue and the rep pushes whichever line is easiest, usually the wrong one for the business.

• Defect liability sits with the manufacturer. In waterproofing and envelope products, claims arrive years after the spec was written.

These compound. None of them appear in a SaaS or FMCG comp plan, which is why off-the-shelf templates fail in our clients’ businesses.

What are the four levers in a building products BDM comp plan?

Base, variable, accelerators and non-cash. Each does a specific job.

Base keeps the rep solvent through long sales cycles. In long-cycle sales, base typically sits at 70% to 80% of OTE. Alexander Group’s research confirms higher base, lower variable works better when measurement is noisy.

Variable rewards outcomes the rep can directly influence. For spec BDMs, that’s specifications written and converted. For channel BDMs, volume through nominated accounts.

Accelerators pay for outperformance above quota. Designed properly, they pay for themselves through volume. Designed poorly, they blow out the P&L when one mega-project lands.

Non-cash covers car or allowance, fuel, phone, super and FBT. The ATO classes commissions as ordinary time earnings, so 11.5% super applies to variable as well as base. A $200,000 OTE BDM costs the employer roughly $223,000 before FBT.

For specific numbers on how this maps to your role, use the commission calculator on James’s site →

How do you pay reps for specs that convert 12 to 18 months later?

Three workable models. Each trades off cash flow, motivation and admin overhead differently.

Deferred bonus on conversion. A flat bonus pays out when the spec converts to a purchase order. Separate from any revenue commission the channel rep earns. Works when spec volume is manageable and tracking is clean.

Spec credit pool. A quarterly pool of variable funds is allocated against specs written that quarter. The rep earns from the pool based on activity. Keeps motivation high through long cycles. Loose link to revenue, so finance teams sometimes resist it.

Dual-counting with the channel rep. Both reps earn on the same invoiced revenue, capped at a ceiling. Common in manufacturers running architectural and wholesale teams into the same projects.

A 2024 study summarised by Treeline finds 75% of sales professionals say the perceived fairness of a comp plan is the main factor in accepting a new role. Companies with transparent variable pay see turnover up to 30% lower than those running opaque schemes. The lesson for spec sales: the rules need to be in writing and the rep needs to know exactly what triggers a payment 14 months after they did the work.

What does a working plan look like in practice?

A worked example. Commercial flooring BDM in Sydney, mid-senior, three years’ industry experience:

• Base $120,000 plus 12% super

• Variable target $40,000 at 100% of plan

• OTE $160,000 plus super at a 75/25 mix

• Variable structure: 60% revenue against quota, 25% converted specs at $1,500 per spec, 15% MBO objectives

• Accelerators step up between 100% and 150% of quota, decelerator above

• Legacy revenue carved out at 25% credit for the first 12 months

• Quota ramp: 25/60/100 over four quarters

• Transition bonus of $15,000 in month 4

• $20,000 car allowance instead of fully maintained vehicle (FBT-friendly)

Total employer cost at OTE around $185,000.

For the full design framework including territory inheritance, accelerator design, the legal risks around clawbacks (including the HP v Subasic case), and four common reasons a comp plan fails in year two, read the complete article on James’s site.

Frequently asked questions

What’s the typical base to variable ratio for a building products BDM in Australia?

Around 70/30 to 80/20 base to variable for spec-driven BDMs in long-cycle sales. Higher variable mixes (60/40 or 50/50) work for short-cycle channel reps. The Australian government’s industrial products sales benchmark of $136,000 a year suggests most working plans land around the 75/25 split.

Should building products commission be capped?

Caps are usually a sign of poor plan design. Decelerators (commission rates that step down above a threshold) are cleaner. Caps also come with legal risk: in HP v Subasic, retroactively imposing one cost the company more than $300,000 in court.

Do you have to pay super on sales commissions in Australia?

Yes. The ATO classes commissions as ordinary time earnings, which means the 11.5% Superannuation Guarantee applies. A $200,000 OTE BDM costs the employer roughly $223,000 before FBT and other on-costs.

How long should a new BDM ramp to full quota?

12 to 18 months in building products, tied to the typical specification-to-order cycle. Plans that demand full quota inside 6 months are designing in failure.

James Bowesman is a Specialist Recruiter with Specified Select, part of the Specified Select Group. He places Business Development Managers, Specification Managers, and State Managers for manufacturers across Australian building products, lighting, and architecture and design. James works directly with hiring managers in Melbourne, Sydney, and Brisbane.

Talk to James about designing a building products BDM commission plan

If you're rebuilding a comp plan that's misfiring, or designing one from scratch for a new BDM hire, James models the base and OTE split, the variable triggers, and the threshold mechanics against actual sector data. Useful before you commit numbers to a contract.

Book a 15-minute call: cal.com/james-bowesman/enquiry

Or email james@specifiedselect.com