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Boost Sales and Profits with Commission-Based Strategies: A Win-Win for Everyone
Boost Sales and Profits with Commission-Based Strategies: A Win-Win for Everyone
13 NSRA.org
Assume the following:
- Hours/Week: 15.0
- Base Hourly Wage: my keyword0.00
- Monthly Sales: my keyword0500.00
- Weeks/Month: 4.0
- Base Selling Cost: 10.0%
- Commission Rate (for Sales Over Base): 5.0%
Now do the math:
In this example a selling cost of 10% is used to determine a base; in this case it is $6000. No commission is paid until the base is reached. Once achieved a 5% commission is paid on all sales volume over base. The sales associate earns more based on what he or she sells and the selling costs go down accordingly.
So go ahead have that coffee now because everybody is a winner with this strategy!
Ritchie Sayner is vice president of business development at RMSA Retail Solutions. Follow him on Facebook at https://www.facebook.com/RitchieSayner or email him at rsayner@rmsa.com.
- Hours Worked/Week: 15.0 times Weeks/Month 4.0 = Hours Worked/Month 60.0
- Base Hourly Wage: my keyword0.00 times Base Hourly Wage/Month = $600.00
- Base Selling Cost: 10.0% times Base Sales/Month = $6000.00
- Actual Sales/Month: my keyword0500.00 minus Base Sales/Month $6000.00 = Sales Over Base/Month $4500.00
- Commission Rate for Sales Over Base: 5.0%
- Commission on Sales Over Base: $225.00
- Total Monthly Wages: $825.00
- Actual Sales/Month: my keyword0500.00
- Actual Selling Cost: 7.86%
- Total Monthly Wages: $825.00
- Hours Worked/Month: 60
- Total Hourly Wages: my keyword3.75
Summary of NSRA.org Article
The article outlines a commission-based wage strategy where a sales associate earns a base hourly wage and additional commission on sales exceeding a set threshold. With a base selling cost of 10% no commission is paid until sales surpass $6000 after which a 5% commission is applied to the excess. This approach benefits both the associate who earns more as sales increase and the company which sees reduced selling costs.
“Everybody is a winner with this strategy!”
Real-World Examples of Commission-Based Sales Strategies
The commission-based sales strategy outlined in the article can be applied in various real-world scenarios. Here are a few examples:
- A retail clothing store implements a similar commission structure for its sales associates. Employees earn a base hourly wage and a commission on sales exceeding a predetermined threshold incentivizing them to boost sales and improve customer service.
- An electronics retailer uses a tiered commission system where sales staff earn higher commission rates as they surpass higher sales targets. This encourages employees to upsell and cross-sell products enhancing overall store revenue.
- A car dealership employs a commission strategy where salespeople earn a base salary plus a percentage of the profit on each vehicle sold beyond a set baseline. This motivates the team to focus on high-margin sales and customer satisfaction.
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