Jane’s Attic Background In 2008, Jane Whitler had opened a high-end used furniture retail store in a metropolitan area in Southwest United States. Her business has been flourishing due to the increasing aging population in the United States. A major part of her market segmentation is snowbirds (people who travel south during winter from colder states). She is able to buy their used furniture at a reasonable price as they move to different houses, or if they move to care facility. The retired market is also her target market for selling her furniture. This is because as the retired people are moving from their homes in the north to their homes in the south permanently, they tend to buy their furniture from her store. By the end of 20ll, Jane was pleased with her sales, as they approached close to $2 million. However, has she looked back her records, she couldn’t figure out how she was still losing money. In 2009, she lost 68,000, in 2010 the loss was $31,000, and in 2011 it was down to $20,000. She determined that 2012 would be profitable, but sales began to plateau.…show more content… With this realization she has begun thinking of altering the sales force compensation plan. She has asked her accountant, John, to compose some sales statistics that might help her consider different sales compensation. John had also had mentioned to Jane that some of his other retail clients that employ salespeople or other getter versus order takers, tried to have each employee generate at least twice their annual compensation and fringe benefits in gross margin dollars. Thus, if a salesperson had total compensation of $50,000, they would need to generate between $100,000 and $150,000 in gross margin dollars. The data that the accountant developed is as
