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How does commission work in direct sales?

In summary, commission is a form of payment given to salespeople or agents as a percentage of their total sales or revenue. It is calculated by multiplying the agreed upon percentage by the total sales or revenue generated. There are two main types of commission: fixed and variable. Commission and bonuses are different forms of compensation, with commission based on individual sales performance and bonuses typically given for achieving set goals. Not all jobs offer commission, with sales-based roles being the most common positions that do.
TerraOB83
Gold Member
220
Ok no one really explained this to me and I have never done any direct sales before but how does the commission work? Is it a precentage of the commissionable sales? TIA
Terra
 
In your business binder, look in the first chapter "business basics" and the commission is explained on page 9.

Basically, you earn commission based on the sales you submit in the calendar month (no matter what date is on the show). As you submit more, your commission increases. Again, see the chart on page 9 to figure the percentages.
 
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thanks I guess I should have read the whole thing instead of skimming over it :)
 
Thanks, Deb. I was going to tell her to read the guide too.
 
About a year ago, a consultant at our cluster meeting spoke up. She had been with PC for like 5 years and had just read the Recipe for Success for the first time.

She said if she had read it sooner, she would probably be a director by now. :) Once she read it, she started recruiting and is almost to directorship.

KNOWLEDGE IS POWER!!!
 
Can't believe it took her 5 years to decide to read it. At least the new guides are thinner! I would be lost without my information. I didn't find this site until I was already in the business a year or so. I am still referring to different things every now and then to make sure I understand the rules.
 

Related to How does commission work in direct sales?

1. What is commission?

Commission is a form of payment that is typically given to salespeople or agents as a percentage of the total sales or revenue they generate for a company.

2. How is commission calculated?

Commission is calculated by multiplying the agreed upon percentage by the total sales or revenue generated. For example, if a salesperson has a commission rate of 10% and they generate $10,000 in sales, their commission would be $1,000.

3. What are the different types of commission?

The two main types of commission are fixed commission, where the commission rate is predetermined and remains the same, and variable commission, where the commission rate can change based on certain factors such as sales performance or reaching sales targets.

4. Is commission the same as a bonus?

No, commission and bonuses are different forms of compensation. Commission is based on individual sales performance, while bonuses are typically given as a reward for achieving certain goals or targets set by the company.

5. Are all jobs eligible for commission?

No, not all jobs offer commission as a form of compensation. Typically, sales-based roles such as sales representatives, real estate agents, and financial advisors are the most common positions that offer commission as part of their salary package.

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