Cost per visit is what the company spends on a field sales rep and their van in a month, divided by the number of calls they make. Fill in the sentence above with the all-in salary, the van cost, working days, daily visits, the share of visits that end in an order and your margin, and the calculator returns what each call costs, what each order costs, and the smallest order whose margin pays for the trip. It is set up for distributors in Saudi Arabia: amounts in SAR, figures from your own books, and an example rep working 26 days a month.
How to calculate cost per visit and the minimum order
Add up what the rep and the van cost in a month and divide by visits (working days × daily visits). Calls that end without an order still cost money, so the same monthly cost divided by orders alone gives the cost per order. An order pays for itself when its margin equals that cost, so divide the cost per order by the margin percentage.
Per visit = Monthly cost ÷ (Days × Visits/day) · Min order = Cost per order ÷ Margin %
What goes into a sales rep's monthly cost
A rep's cost is everything the company pays because that person is in the field, not the basic salary alone: allowances, any fixed incentive, the employer's GOSI share, medical insurance, iqama and work permit fees for a non-Saudi rep spread over twelve months, and the phone bill. The van adds the lease or instalment, fuel, maintenance and tyres, and insurance and annual fees spread over the months. Switch on the cost breakdown to enter each item separately; the calculator adds them into the sentence.
Together these are the direct cost to serve the route. Warehouse costs and management salaries stay out, because the question is what this rep's orders have to cover by themselves.
Strike rate and why it moves the minimum order
Strike rate is the number of visits that ended in an order divided by all visits. When it slips from 50% to 40%, the minimum order climbs from SAR 500 to SAR 625 without any change in salary or fuel, as example 2 shows. Review it for each rep every month and look at the outlets that get visited and do not buy: do they need a weekly call, or would a phone order do?
How many outlets a sales route needs
Outlets on the route = visits per month ÷ visits per outlet. With 520 visits and a weekly call (4 a month) the route covers 130 outlets; with a call every other week it covers 260. Fewer outlets than that means the rep has spare hours; more means some outlets miss their visit day.
Comparing two van sales routes
A van sales rep in the city makes more calls with smaller drop sizes; on the outskirts they make fewer calls with bigger orders and burn more fuel. Switch on the route comparison and enter the second route's figures to see the minimum order and the margin left on each, which is the route profitability that matters.
Break-even sales for a rep each month
Break-even sales are the sales whose margin exactly covers the rep and van costs: monthly cost ÷ margin. At SAR 13,000 of costs and a 10% margin, the rep has to sell SAR 130,000 a month before the route earns a single riyal. Compare that figure with the monthly target; a target below it means the route loses money even when it is met.
Common mistakes when costing a sales rep
- Costing the rep at basic salary only and leaving out allowances, GOSI and the van.
- Dividing by orders when you want the cost of a visit, or by visits when you want the cost of an order.
- Using markup on cost instead of margin on the selling price, which makes the minimum order look smaller than it is.
- Forgetting variable commission, which comes straight off the margin that covers the costs.
- Setting one minimum order for every route when remote routes cost more per call.
What to do with the result
Turn the minimum order into a written policy that reps and customers both know, or tie it to free delivery. Move outlets that order below it to a fortnightly call or phone ordering, and run the numbers again after every route change. Download the result as a PDF for the sales meeting, or as an Excel file with live formulas to test other scenarios. To see how the commission rate changes the rep's own pay, use the sales commission calculator.
When dozens of calls a day are run from a notebook
Working out the minimum order once is easy; tracking it every day for every rep and outlet is the hard part: who called and sold nothing, who sold under the line, and what is left on the van. At Microtec we offer O-Orange, a system for field sales and distribution, to distributors running routes across Saudi Arabia. Try it before you decide.