Your company’s commission structure is an essential part of your business organization. How you compensate your sales reps not only affects your bottom line, but can also help you attract and retain top sales talent. Studies show that companies Czech Republic Phone Number that pay competitively at the 75th percentile or higher have 50% less revenue. In some cases, paying more could save you money in the long run. Here are some common sales commission options for sales managers to consider and how you can choose the best one for your team.

100% Commission

In a simple commission plan, the only income sales reps earn comes directly from their sales. The biggest advantage for traders is that it offers the highest earning potential. Most companies don’t set a commission cap on commission plans, so the sky’s the limit for sales reps. Since the company does not have to pay a base salary, it can offer a higher commission on each sale. This structure gives sales reps complete control over their earnings, as they can work more hours if they want to make more money. It’s also a way for them to gauge how well they’re doing in the role. For businesses, this structure provides the fastest route to market, which is why this option is desirable for startups.

Base Salary + Commission

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One of the most common sales commission structures is a base rate plus a commission on each sale. Some companies offer an hourly rate as a base, while others stick to a fixed salary. This model empowers both the business and the salesperson. The company invests in the representative with a monetary reward regardless of their performance, in addition to compensation for anything they sell. In exchange, the salesperson fully invests their skills and time to earn both parts of their compensation.

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