2

I am aware of sites such as salary.com for finding traditional salaries. How can I find a reliable source for average sales commission rates for my area, industry, etc.? What factors would influence the average rate? Google has not yet given me anything vaguely complete or reliable so far. My perspective is that of a small business owner who might hire a salesperson.

7
  • Any reason why the rates themselves (already a relative factor) might be specific to your area? In any case, I hear 10% is pretty common for a SBO hiring a commission-only salesperson. No evidence to back that up though.
    – Nicole
    May 11, 2012 at 7:54
  • While salaries might be geographical, sales commission percentages are highly dependent on what it is you are selling. May 11, 2012 at 11:03
  • I guess I'm unsure what factors into an "average" commission. If it's not geographical, no problem -- I still am wondering where to find the information. I'll edit to clarify.
    – Andrew
    May 11, 2012 at 13:51
  • I see information regarding the sale of Car and Home Owners insurance, so you would likely have better luck indicating your specific industry. May 14, 2012 at 20:49
  • 4
    This question appears to be off-topic because questions asking us to recommend or find a tool, library or favorite off-site resource are off-topic for Stack Exchange as they tend to attract opinionated answers and spam. Instead, describe the problem and what has been done so far to solve it.
    – Jim G.
    Dec 8, 2013 at 22:11

1 Answer 1

6

Having been unable to locate a single comprehensive source for commissions in general, nor software sales in particular, I can provide you following links which as a group appear to address the What factors would influence the average rate? portion of your question.

If you are considering a commission only route the software sales commissions thread on SoftwareCEO gives the following "formula":

or an existing business with existing sales it's pretty easy to work out because you can compare against your costs for doing sales in-house on a 100% salary basis.

and

What do you think this person will need in total compensation? What percentage of that will be commission? How many licenses do you expect him to sell in a year? What is the average sale? It's fairly simple arithmetic to use those numbers to derive a commission percentage.

However, this and other discussions on the site and the web generally, warn against going the commission only route:

working on commission only and I find a lead ... who owns the lead? The sales person does.

More importantly, you lose all control over the sales process. If your commission only sales guy would rather go sailing, how can you get pissy with him or her. They are on commission only.

For specific numbers from IBM, Oracle and possibly Microsoft see the Quora question What are common compensation structures for salespeople in the software industry?

And finally for Software as a Service calculations there is SaaS Sales Compensation Made Easy which gives the details behind the summary:

The ONLY difference between SaaS sales compensation and sales compensation for software or other products is that you should pay based on the LIFETIME VALUE of THE DEAL instead of the unit price of the product

Not the answer you're looking for? Browse other questions tagged .