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Commission in sales is a form of payment given to salespeople based on the amount of sales they generate. It is usually a percentage of the sales value and serves as an incentive to encourage higher sales performance.
Synonyms: sales commission, commission payment, sales incentive, commission rate
Commission motivates salespeople to increase their sales efforts because their earnings directly depend on their success. It aligns the interests of the salesperson with the company’s goals, driving revenue growth.
Sales commissions are typically calculated as a percentage of the sale price of a product or service. For example, a salesperson might earn a 5% commission on every sale they close. This system rewards productivity and can vary by industry or company policy.
