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| *Ostroff, Fair and Company>>>Marketing & Sales |
How does sales commission work? |
I never got the concept of making commission. How does that go about in retail. I used to run the back office at an appliance store. The sales people were allowed to bargain with the customers within a range with the price. There commission was a percent of the profit where the percent was different for different products. Some small items had no commission. There were also times when the manufacturers gave SPIFFs or rebates directly to the sales people. There was also a basic salary given in addition but I was not involved in that. In retail, sales people can make commision based on specific product lines their store is trying to move. It can be a line of clothing, it can be a store credit card. A sales person can make a specific amount in commission; if you get a person to sign up for a store credit card, you can make a $50 spiff. If a store is trying to sell gucci, they may give you 5% of the sell price of every gucci item you sell; encouraging you to steer people toward that product line. You get a small percentage of the total amount of goods sold. It is that simple. For example if you sold $1500 worth of goods this week , and your commission is 2%, then you made $30 you get a percentage of the sales you made I was a mortgage broker working on 100% commission, and here is how my pay was structured. If I closed a deal for someone, I would generally charge 3% in closing costs. For example, if I closed a $100,000 refinance transaction I would charge $3,000. Since I was working for a brokerage firm, my commission split was 50% which means I would take home $1,500. Close 4 or 5 of those per month and you're doin' alright! You get, _ percentage of the sales, you make as 'Incentive'_ a motivating factor, allowed to encourage employees. I make 40% of everthing I sell. Plus overrides and monthly bonuses. If I sell $500 I make $200. Sell $2000 then I get $800. Email me I talk you through the concept. |
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