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A business management system can be an effective tool for managing sales commission system which should incentivise staff to sell the goods you want at the most profitable prices, advises Andrew Maszyr, development director, Cromwell Business Systems.
Sales commission is one of the many thorny issues a retailer has to consider as a means of rewarding staff who do well. Tricky because the retailer has to weigh up the advantages of sales commission versus other forms of remuneration. And, if commissions are used to incentivise store staff, he has to decide on what basis the employee should be awarded and how best to manage the process.
While commission offers sales staff an opportunity to supplement their earnings – sometimes considerably – they are also subject to fluctuations depending on their ability to sell product and on the ups and downs of the economy.
It’s not impossible to manage a basic commission scheme in a spreadsheet. However, it’s much more effective to use a store management system such as Cromwell’s Open-Retail as there are multiple permutations that will incentivise and inform your staff as well as ensuring they sell the goods you want them to sell at the most profitable prices.
The options
At its simplest, a basic commission scheme is based on a percentage of each sale, rental or maintenance transaction. Open-Retail controls whether commission is calculated as a percentage of the gross retail price or net retail price. As in any IT system worth its salt, there are numerous permutations and refinements to get you thinking. For instance, commission can be paid on brand new products only, or on different types of products, eg those from specific manufacturers; or on cash sales only, not rentals or maintenance. Decisions can also be made on whether you reward individual sales staff or whether the commission is paid on a pool basis (or a combination of the two). Open-Retail also allows you to set up varying commission rates for different categories of product, including surplus stock or one-off items.
In the case of rentals, you can assign commission on any variable of new customer, changeover customer or renewal customer. You can also withdraw commission if a customer returns the goods and receives a refund. The number of days during which you have the power to take back the commission can also be specified.
How does it work?
