Selling products and services can be a complicated task and therefore requires professionals with the skills and abilities to do so. Similarly, this activity requires reward and some motivation, which are offered through the commission on sales.
Do you know how to calculate the commissions of your salespeople? Do you know the elements that you must take into account? In this article we tell you everything you need to know to bill sales commissions in a fair way, without reducing your profits.
What are commissions?
Commissions are those bonuses that sellers earn, depending on the behavior of their sales. Usually, it is a percentage in relation to the amount of profits you have generated for the company.
Commissions can be paid as a salary, agents earn according to what they sell, or they can be given in addition to a basic salary. It all depends on the initial contract that is stipulated with the salespeople, however fair would be the second option.
Each company should have its own commission plan in relation to the sector it belongs to or the characteristics of products and/or services it offers, as well as the cost scheme it is governed by.
How do you account for sales commissions?
There are different types of commissions in relation to different elements. Below, we show you some of the commission variants you can implement in your business:
Standard commission: This is where a percentage is set in relation to what the sales agent invoices. According to the value of the products or services that are sold, it can vary from 2 to 15 percent.
Goal-based commission: This type of commission is based on the fulfillment of objectives such as reaching a certain sales cap, number of visits, number of clients captured, among others. Experts recommend this variant, since the incentives are more systematic, which contributes to the professional growth of the agents.
The system to invoice commissions for sales, must be conformed according to the characteristics of the products or services that you offer. Taking into account the costs, the real value of what you market and the sales behaviour of each agent, it will be easier for you to offer fair commissions for each seller.
You must make clear, from the beginning of the relationship with the agents, the characteristics of this commission system. The percentage that will be given for each sale, as well as the moment in which this payment will be made, constitute significant elements to motivate the work of the agents.
To further encourage your group of salespeople, try to reward those with the most sales by offering a better percentage or a sales commission system that can be very effective.
Commissions should not be seen as an expense for the company, but as an investment in training fast, effective and committed agents for the project. Choose the sales commission system according to the characteristics of your business and its profitability.
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