Helping you choose what’s better for your business
With the ability to measure the results of sales behavior more finely comes the corresponding ability to reward sales behavior more precisely. Therefore, having useful information at your hands will enable you to choose the suitable commission tracking model for your sales team. One of these models could be the % gross profit commission method.
This time, I’m here to explain, and hopefully enlighten you a little bit more regarding the gross profit commission tracking method. I hope this actually helps you to understand this method. The gross profit commission tracking method is when the incentive received by the sales person is based on the gross profit of the items sold. This model is especially good for product services; if this is the type of business you have, pay close attention.
Gross profit commission tracking method benefits and characteristics
With this model, commissions tie a sales rep contribution to the bottom line, which could really save you from extra complications or obstacles that may occur throughout your commission tracking process. Basing your commission tracking method on gross profit will make and allow your sales reps to focus exclusively on the margin.
This commission calculating structure can also give certain advantages to your sales reps. One important advantage is that they can meet their goals through these results:
1. Increase sales revenue
2. Significantly reduce sales expenses
3. Selling a different mix of products
If you decide to base your commission calculations on gross profit, Blitz is the ideal commission tracking software to help manage this business structure. Remember that we adapt to your needs and commission plans. Let us automate your commission tracking process.
- Book: The Sales Compensation Handbook by Stockton B. Colt. Second Edition, 1998.