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Tools City

Commission Calculator

The Commission is a form of remuneration to an agent or a salesperson for their contributed services. You can find your commission on the basis of sales price and commission with Tools City's free online Commission tool.

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The Commission Calculator tool is a very efficient and easy-to-use tool. For any person who is a very enthusiast in Finance, this free online tool can be very beneficial.

It offers its users to calculate commissions and related earnings effortlessly.

If you are new to the finance sector and eager to understand terms like commission, the Tools city website is here to help you.

WHAT IS COMMISSION?

The Commission is a form of remuneration to an agent or a salesperson for their contributed services.

It depends upon which thing is being sold by an agent or a salesperson and offers the payment with respect to these sales; the more the sales, the more will be the commission.

For Example, an automotive firm hires an agent to get potential sales for their cars. For each sale, they give a certain amount to that agent.

HOW IS COMMISSION CALCULATED?

The concept of percentage determines the Commission.

We have defined the formula for calculating Commission so you may understand it conveniently:

Commission = Sales Price × Percentage of Commission offered / 100

SAMPLE to UNDERSTAND COMMISSION CALCULATION:

Let’s consider a case: a business owner is asking you to sell his product which costs $20. On selling this product, he will give you 15% per product:

Commission = Sales Price × Percentage of Commission offered / 100
$3 $20 × 15 / 100

Now that your commission has been calculated, you may be questioning who will be responsible for the cost of your earned commission.

Don’t worry; most of the time, the selling company owns the cost of the agent’s commission.

When the company bears the cost of your commission, they subtract it from the final price of sale.

It can be calculated by % decrease formula:

Real Revenue = Sales Price - Sales Price × Percentage of Commission /
100

In our case, it will be:

Real Revenue = Sales Price - Sales Price × Percentage of Commission / 100
$17 $20 - $20 × 15 / 100

However, the formula mentioned above is not a fixed rule. Sometimes consumer bears the commission.

For finding customer base commission, the % increase formula is practiced:

Price with Commission = Base Price + Base Price × Percentage of Commission / 100

Putting our assumed figures in this formula:

Price with Commission = Base Price + Base Price × Percentage of Commission / 100
$23   $20 + $20 × 15 / 100

HOW TO USE COMMISSION CALCULATOR?

It is easy to use the Commission tool from Tools City. All you need to do is enter the Sales price and the Commission, and then this tool will automatically display.

  • Commission Amount
  • Price + Commission
  • Price – Commission

You can reuse this calculator by using the Reset option, which will clear all the entered data.

what is a typical commission?

The commission usually changes with different enterprises and does not have a fixed rule.

Further, it also depends on the type of product and capability of the agent or salesperson.

Commission can vary from 4-5% to 20-50%, depending upon various aspects.

WHAT IS A COMMISSION STRUCTURE PLAN?

You must understand how to commission systems to work whether you are in the sales business or considering moving in a sales role.

Some kind of commission compensates most salesmen. What and how much their annual family income has to do with their sales. In this article, we outline the sales commission system and give some examples.

Types of Commission

    • Straight Commission – Salesperson who works only on commission earned.
    • Base Salary Plus Commission – Salesperson gets a stable salary, plus additional commission on sales.
    • Gross Margin Commission – The salesperson earns a percentage of profit on the final cost.
    • Residual Commission – Encourages salespeople to retain their customers with ongoing accounts, which constantly generates revenue and commission.
    • Revenue Commission – Salesperson who achieve a predetermined percentage of revenue they have generated.
    • Tiered Commission – Salesperson earns a certain amount of commission for all sales up to a designated amount; after fulfilling the given target, their commission increases.

 

WHAT MAKES COMMISSION JOBS ATTRACTIVE?

Many people wanting to enhance their income are attracted to earn their livings on commissions. There are a few reasons why people like to work for commissions:

  • Capability: Commission offers income comparative to one's sales caliber and capacity of earning a commission. The bigger the number of sales, the higher the fee. The sales guy has everything to do with his imagination and sell and make money.
  • Freedom of work: Contrary to a business employee, a salesperson or an agent is not responsible to anybody, nor his schedule is fixed, and he is not troubled by other problems at work.
  • More Opportunities: A commission agent is free to work with various firms and does not need to commit to one company or brand. That paves the path for more without higher boundaries. 
  • ­No limits to earning: For agents to enhance sales, most firms are ready to provide a good proportion of commissions. That gives commission agents an excellent opportunity to make the most, which is frequently not earnable in wage-based professions.

Earning from the Commission is a better solution to the problem of unemployment. These jobs provide the jobless with financial and emotional security. 

WHAT ARE THE best COMMISSION-BASED JOBS?

Commission-based jobs have a vast and versatile range, however, we have tried our best to concise the best examples of commission-based jobs.

  • Sales Engineers
  • Advertising Sales Agent
  • Brokers For Real Estates
  • Insurance Agents
  • Medical Representatives
  • Stockbrokers
  • Literary Agents
  • Inside Sales
  • Travel Agents

WHY DO BUSINESSES FAVOR COMMISSION AGENTS?

Every company's principal objective is to generate profits through sales.

Commission brokers prefer to work hard in many situations and raise sales to a maximum extent due to their appealing commission.

Many people who are considered commission agents have strong marketing abilities and persuasive talents. This will thus benefit the company in setting up its brand in numerous locations and also in increasing sales.