The term “sales commission” is one that shows up pretty consistently in the sales landscape, and it’s something all sales professionals should be familiar with. A sales commission is the additional compensation provided to a sales professional based on specific factors, like a measurement of that individual’s performance or their ability to achieve their sales goals.
Unlike a base salary, sales representatives can receive fluctuating higher or lower commissions depending on their performance, or the conditions of the market.
A sales commission is an additional cash injection given on top of a salesperson’s base salary when they achieve a specific professional goal.
Usually, companies offer their salespeople a “sales commission” to help motivate the team to sell more products. Sales commissions motivate representatives by letting them know they can earn significantly more money if they achieve specific goals.
Sales commissions can also help to encourage specific behaviors, like spending more time selling products instead of managing existing accounts.
Factors that may influence a typical sales commission include:
Managing sales commissions requires a careful strategy on behalf of the business. Most plans will involve specific legal terms and conditions that participants need to accept to enroll in the plan. These terms and conditions cover topics like general eligibility, leaves of absence, and even terminations. Incentive plans can also specify caps that will prevent the company from paying too much on a commission basis.
When starting a job with a commission-based payment schedule, sales professionals will need to ensure they understand the full terms and conditions of their role going in. For instance, sales experts may need to ask about things like:
For companies, sales jobs with commission can be an excellent way to attract additional talent and improve the overall motivation of a team. Commissions can drive better results from employees, and help brands to achieve their goals faster.
For sales professionals, commissions are an excellent way to increase your potential income, by achieving specific goals related to your role. A commission could help you to earn a lot more.
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