How do you work out commission structures?

Answer

This topic is twofold in it's value and approach usually. %95 percent of all companies have a completely useless commission structure in an attempt to fool their hi turnover positioned employees into thinking their is unlimited money making potential. They will wow you with figures and talk of "bonus" money or monthly goals and weekly goals that never seem to pan out and that only a very small percentage of people ever hit. Always remember the 80\20 rule in sales, and then you can understand why you structure your sales compensation plan accordingly. 80 % of the people make 20% of your total sales, and vice versa, 20% of the people make 80% of your sales. It's the way it always works. Always. You have heavy hitters and below average burnouts. Only two kinds. By the time your employees figure out that hitting their sales quota is as elusive as the white buffalo or the unicorn, they have usually spent a couple of years of their life and all of their time "chasing" the money. The remaining 5% percent of companies have either a temporary monopoly through some sort of patent or technology and have a select and hand picked number of employees who make a lot of money and of course if your a manager, don't forget to give him an overide- or a percentage of everything that everybody else sells.

First answer by Eco99. Last edit by Eco99. Contributor trust: 394 [recommend contributor]. Question popularity: 124 [recommend question]

Can you answer other questions about business and finance?