1. Plan Mechanics

2. Tale of Two Reps

3. Plan rewards unprofitable sales
GP Commission Plan
Plan rewards unprofitable sales

4. NBC Commission Plan

5. (Operating Profit) + (Sales Comp Total)
Sales Comp Rates
Most companies pay an effective rate of 50% to 60% of NBC. (total pay)
Self-check:
(Sales Comp Total)
(Operating Profit) + (Sales Comp Total)

6. NBC Commission Plan may have a monthly base salary component
new reps / territories
geographic differential
may have a guarantee
new reps
new territories
new business segment
pays a fixed percentage based on rep’s NBC
negative commissions are allowed

7. NBC Commission Plan (cont’d)
should have a transition mechanism
decrementing guarantee
should be flexible to allow for unforeseen circumstances
may incorporate territory realignment