Sales Commission Structure: What Does it Involve?

Definition and explanation

A sales commission structure refers to the method of compensating a salesperson for their efforts in closing a sale. It involves offering a percentage of the total sale price as a commission to the salesperson. The commission rate is predetermined and may vary based on the type of product or service being sold. This structure is commonly used in industries such as real estate, insurance, and retail.

Why it matters in sales

In the world of sales, it's all about the Benjamins. Or rather, the percentage of those Benjamins that you get to take home. And that's where a sales commission structure comes into play. It's the financial carrot that salespeople can chase, the dangling prize that motivates them to close the deal. Without a proper commission structure, a sales team would be about as motivated as a sloth on a Sunday afternoon. So, if you want your sales team to hustle like they're running from a horde of zombies, you better have a damn good commission structure in place.

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