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Todas las empresas minoristas pagan enormes sumas en concepto de comisiones de venta. Los beneficios que obtienen son los ingresos por ventas menos la comisión pagada a los representantes de ventas. ¿Afectan estas comisiones a los beneficios? Pues no, ya que las comisiones se pagan por las ventas generadas por los comerciales, y cuanto mejor se les paga, más se inspiran para mejorar las ventas, lo que en última instancia aumenta los beneficios. 

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Según los resultados de la investigación, casi el 43% de los trabajadores están dispuestos a cambiar de trabajo por mejores comisiones. Unas mejores estructuras de comisiones de ventas ayudan a las empresas minoristas a retener a los vendedores con mejor rendimiento.

In this blog, we highlight the various retail sales commissions that employers offer for their employees.  

What is retail commission? 

A retail sales commission is a percentage of the sales value that is achieved by the sales employee which is paid out to the retail sales employee for the achievement of the sales quota or target as set by the employer. Retail commissions are usually set between 5 and 45 percent based on the type of product. 

If the base pay is set to the industry standard or slightly above, the commissions may start at 5 percent. But the most common method of paying out commissions is by paying an average base pay and a higher percentage of commission value set between 20 and 30 percent - which helps in motivating sales employees to sell more in order to earn more.  

Sales employees in the retail sector are going through ‘the great resignation‘- a time where employees are quitting their jobs to find better jobs that are worth their while. Almost 4 million people quit their jobs in 2021 which indicates poor sales structure and job satisfaction. Of the people who quit their jobs, 63 percent of employees revealed that the most important reason was the lack of satisfactory compensation which may include wages, salary, commissions and incentives. 

how does commission work in retail? 

5 Types of retail commission structures with examples on how it works 

Attrition is extremely highat 60.5 percent in the retail space and therefore having a good salesforce that is compensated well with a good commission structure helps in retaining high performing, trained, valuable resources.  

Here are some popular commission structures in most retail companies and an explanation on how commission work in retail. 

1. Comisión directa 

A straight commission plan is the simplest form, where salespeople earn a percentage of their total sales. This is a pure incentive structure, meaning earnings are directly tied to performance. 

Example: A sales associate in a clothing store earns 5% commission on all sales. If they sell $5,000 worth of merchandise in a month, they earn a commission of $250. 

2. Base salary plus commission 

This structure combines a fixed base salary with a commission on sales, offering a balance of security and incentive. The base salary provides a safety net, while the commission motivates employees to exceed targets. 

Example: A furniture store salesperson receives a base salary of $2,000 per month plus a 3% commission on all sales. If they sell $10,000 worth of furniture, their total earnings for the month would be $2,000 + ($10,000 * 0.03) = $2,300. 

3. Comisión escalonada 

Tiered commission structures offer increasing commission rates as salespeople reach higher sales targets. This motivates employees to push beyond their comfort zone and achieve exceptional results.

Example: A car dealership might offer the following tiered commission structure: 

0-5 cars sold: 1% commission per car 
6-10 cars sold: 1.5% commission per car 
11+ cars sold: 2% commission per car 
If a salesperson sells 12 cars, their commission would be calculated as follows: (5 * 1%) + (5 * 1.5%) + (2 * 2%) 

4. Pool commission plan 

A pool commission plan involves pooling a percentage of total sales revenue, which is then distributed among the sales team based on various factors, such as individual sales, seniority, or performance reviews. This fosters teamwork and shared responsibility for overall sales success. 

Example: A department store allocates 2% of its total monthly sales to a commission pool. This pool is then divided among the sales staff based on individual contributions and performance metrics, encouraging collaboration and a focus on overall store goals. 

5. Residual commission

 

Common in industries with recurring revenue (like subscription services), residual commission pays salespeople a commission on initial sales and a continuing commission on renewals or repeat business. This encourages building strong customer relationships and ensuring customer retention. 

Example: A salesperson selling software subscriptions earns a commission on the initial sale and then a smaller commission each month the customer renews their subscription. 

How retail commissions drive more sales 

Retail commissions play a crucial role in driving sales by motivating sales teams, rewarding performance, and attracting top talent. By implementing a well-structured commission retail system, businesses can ensure their sales reps are motivated to close more deals and enhance customer experiences. 

Here are the key benefits of commission in retail and how they contribute to business growth. 

1. Motivate employees 

A commission-based structure encourages retail sales associates to go the extra mile to meet or exceed sales targets. Additionally, commissions incentivize excellent customer service, as employees are motivated to build better relationships with shoppers. 

2. Reward employees based on performance 

According to Gallup’s State of the Global Workplace: 2022 Report, nearly 44% of employees experienced high daily stress levels in 2021. Recognizing and rewarding top performers through a well-defined commission retail structure can help boost morale and engagement. Compensation tied to performance makes employees more invested in increasing sales and contributing to the company’s success. 

But there are a few drawbacks to it as well. 

Drawbacks of commission-based pay

 

While a retail commission structure has many benefits, there are some challenges that businesses must address. 

1. Complicates payroll 

Commission-based pay structures can make payroll management more complex. Calculating commissions based on sales volume, transaction value, and tiered percentages requires precision and efficiency. 

Compass simplifies this process by automating commission calculations, integrating sales data, and ensuring accurate payouts—eliminating manual errors and payroll complexities. 

2. Negative competition among employees 

A commission-based system may sometimes lead to unhealthy competition, where employees prioritize earnings over teamwork. This can result in aggressive sales tactics that harm customer experience.

Using Compass, managers can track employee behavior and performance, ensuring fair competition and recognizing collaborative efforts rather than just individual sales numbers. 

3. Discourages employee growth 

When employees focus solely on hitting sales targets, their professional development can take a backseat. They may neglect broader retail skills, such as customer relationship management, leadership, and teamwork. 

With Compass, businesses can set up incentive structures that reward not only sales but gamification feature that can keep your sales reps engaged. Motivate your reps to close more deals and increase sales revenue by running sales contests and publicly. Recognize their wins on the sales floor TV screens with sales gamification software

Now that we know how we can use Compass to combat the drawbacks of retail commission. Let’s understand how to set it up in 7 steps. 

7 steps to create a retail commission structure

 

Studies reveal that in 60 percent of companies, the commissions are created by the senior management or CEO with the help of the sales managers. Here is a simple and effective way to create and implement a retail commission strategy: 

1. Choose the appropriate commission structure

 

Based on the type of product or service and the complexity of sale, companies must choose the right type of commission structure that they want to offer to their employees. Not all employees may benefit from the ‘one size fits all’ approach.  

2. Establecer objetivos realistas 

Targets or quotes for retail sales employees must be set by taking into account the overall sales objective for the year and the number of sales employees using which, realistic goals must be provided as sales quotas for month, quarter and annually.  

3. Communicating with sales team

 

Sales employees in the retail sector tend to shuffle a lot - this means that companies may have to deal with new employees a lot. Keeping quotas and commission structure clear and communicating them effectively helps in better productivity from the employee.  

4. Establish effective tracking and reporting systems 

Employees in retail usually lack the technology to report and track their sales data and their achievements. Make sure that employees have the right tools to record their day to day sales achievements and proper reporting format for the same on a weekly or monthly basis.  

5. Consider tax implications 

Commissions are taxable under the income tax and IRS norms of the US. This means that employers must withhold the tax before paying them as commissions to the employees. Make sure that tax amounts are calculated properly and the right commission structure and payment is made as per the taxation laws for employers.  

6. Track employee performance 

Tracking of employee performance helps the management to identify areas where intervention is required and areas where the employees are doing well. This helps in adjusting the commission structure or introducing additional training, sales incentives or rewards programs to help the employees out.  

7. Continuous improvement  

As employers in the retail space, strategies and payment structures should be dynamic and adjust to the market conditions and competition in the industry. Creation of strategy and making sure all employees are benefitting from the same must include activities such as: 

  • Gathering feedback from sales team on their satisfaction level with regards to the current compensation and commission structure - 63 percent employees agreed that collecting their feedback to create a better workplace would make them keener.  
  • Adapting to changing market conditions and checking for competitor compensation strategies using competitor analysis tools 
  • Staying informed about industry trends and creating provisions for other monetary and non monetary benefits for employees. 

One such example of this is Walmart. Walmart created and structured a retail commission that provided them with success.

Walmart is one of the biggest retail stores and an employer of over thousands of workers. Walmart aims to reduce its turnover in their sales division and help employees with better standards of pay and quality of work. Walmart uses various benefits and perks to capture employee retention and improve their quality of life including:

Recognizing employees for their performance 
Additional benefits based on hierarchy 
Higher wages and better performance based incentives 
Healthcare insurances starting at 25 USD per day 
Employee discounts etc 

One such example of this is Walmart. Walmart created and structured a retail commission that provided them with success.

In case you are short of retail commission ideas, unlike Walmart, we have a few in store for you. 

6 Retail sales commission ideas for 2025 

Following are the 6 retail sales commission ideas you can consider implementing in 2025. 

1. Product-specific bonus 

Introduce a bonus commission for selling specific products or product categories. This can be particularly effective if there are new or high-margin products you want to promote

Example:

- Sell Product X: Earn an additional 3% commission on the sale of Product X. 
- Achieve a certain target in a specific product category: Receive a one-time bonus of $500. 

2. Gift card power-ups 

Incorpore un incentivo de tarjetas regalo a su estructura de comisiones. Permita que los vendedores ganen tarjetas regalo por alcanzar hitos específicos, lograr un rendimiento sobresaliente o alcanzar objetivos de forma sistemática. Las tarjetas regalo pueden ser para tiendas populares, restaurantes u otras opciones atractivas. 

Example:

- Achieve 150% of monthly sales target: Receive a $50 gift card of your choice. 
- Close the highest sales in a quarter: Earn a $100 gift card. 

3. Experience-based commission 

En lugar de los tradicionales incentivos monetarios, ofrezca a los vendedores la oportunidad de ganar experiencias únicas en función de su rendimiento. Por ejemplo, días de spa, entradas para conciertos, actividades de aventura o bonos de viaje. 

Example: 

- Exceed quarterly sales targets: Enjoy a weekend getaway package. 
- Achieve the highest sales in a specific product category: Receive tickets to a popular show or event. 

4. Customer retention bonus 

Encourage salespeople to not only focus on acquiring new customers but also on retaining existing ones. Implement a commission bonus for sales generated from repeat business or from customers who make frequent purchases

Example:

- Generate sales from a returning customer within a specific period: Earn an extra 2% commission. 
- Achieve a certain percentage of sales from repeat customers in a month: Receive a loyalty bonus. 

5. Team-based performance pool 

Create a shared commission pool where a percentage of each sale goes into a collective fund. At the end of a set period, the pool is distributed among the entire sales team based on overall team performance, fostering a sense of collaboration. This encourages teamwork and collaboration among sales team members.

Example:

- 2% of each sale goes into the team performance pool. 
- At the end of the quarter, the pool is divided among team members based on a weighted average of individual sales contributions. 

6. Upselling and cross-selling bonus 

Incentive a los vendedores para que realicen ventas adicionales y ventas cruzadas ofreciéndoles una bonificación por cada venta adicional o venta cruzada realizada con éxito. Esto les anima a centrarse no sólo en las ventas de productos individuales, sino también en aumentar el valor global de la transacción. 

Example: 

- Successfully upsell a higher-tier product: Earn a 5% bonus on the upsell amount. 
- Cross-sell complementary products with the main purchase: Earn an additional 3% on the cross-sell amount. 

Now comes the hot question about retail commission. How much do the retail sales rep make? 

¿Cuánto gana de comisión un comercial? 

The projected overall compensation for a Retail Commission Sales position in the United States area is approximately $94,953 per year, with an average annual salary of $61,666. These figures denote the median, signifying the midpoint of the ranges derived from our exclusive Total Pay Estimate model, based on user-contributed salary data. 

 La retribución complementaria prevista se estima en 33.287 $ anuales, lo que incluye posibles componentes como primas en metálico, comisiones, propinas y participación en los beneficios. La "horquilla más probable" refleja los valores comprendidos entre los percentiles 25 y 75 de todos los datos salariales disponibles para este puesto. 

How is retail commission calculated? 

Studies reveal that only 32 percent of employees in the retail sector were actually satisfied with their compensation from their employers. 

Esta es la razón por la que la gente abandona los puestos de trabajo en el comercio minorista, lo que supone una pérdida de dinero y de valiosos recursos humanos para los empresarios. Con una sólida estructura de comisiones, las empresas pueden retener a más empleados.  

Cities like New York and Chicago paid a good basic pay structure of 55,983 and 52,087 USD per year. Commissions are paid over and above this value based on the sales quota achievement. 

Los empleados con más de 10 años de experiencia cobran entre 65.000 y 70.000 USD al año como salario base, lo que favorece el potencial de ingresos de los empleados de ventas a largo plazo.  

Sales commission is calculated by multiplying the commission percentage with the sales quota that needs to be achieved. Typical sales commission percentage for B2C is 10 to 30 percent based on the product. For B2B clients, this value is estimated at 7 to 15 percent. In garments and fashion, the percentage for commission is set between 10 and 20 percent.  

For example: if an employee's base salary is 10,000 USD and his sales commission is 10 percent for target achievement, then his commission on achieving 100 percent quota achievement of 20,000 USD would be: 10,000 + (10 X 10,000) = 11,000 USD.  

 

Este es un ejemplo del modelo de base + comisión. Si los empleados en el modelo de sólo comisión, las cuotas de ventas son más altos con mayor porcentaje y valor de la comisión. 

Take Chanel retail sales reps as an example. Chanel, a luxury brand that sells a variety of jewelry, accessories, apparels and other fashion items offers one of the best compensation and commission structures for its sales employees. The base pay of employees is at 137,642 USD of which commissions are valued at 57,280 USD approximately. Employees get around 20 to 25 percent commissions on various items based on the product value. 

How Compass can optimize retail sales commissions for better performance? 

Compass

Managing commission-based payroll can be complex, especially with tiered structures, varying percentages, and performance-based incentives. Compass simplifies this by: 

1. Automating commission calculations for accuracy 

  • Automatically calculating commissions based on sales data. 
  • Reducing manual errors in payroll processing. 
  • Ensuring timely and accurate payouts to employees. 

2. Encouraging fair competition and teamwork 

  • Tracking individual and team sales performance. 
  • Offering insights into fair commission distribution. 
  • Recognizing not just sales numbers but also collaboration and customer engagement. 

3. Driving employee motivation through gamification 

  • Running sales contests with real-time leaderboards. 
  • Displaying top performers on sales floor TV screens. 
  • Introducing rewards that go beyond commissions, such as badges, gift cards, and experience-based bonuses. 

4. Simplifying reporting and performance tracking 

  • Providing detailed sales reports and insights. 
  • Helping managers identify high-performing employees. 
  • Allowing employees to track their own earnings and progress. 

Retail businesses often struggle with tracking commissions and sales performance in real time. Schedule a call with Compass now! 

Wrapping up with key points: 


The talent and efforts of the salespersons go a long way in influencing the productivity of you retail business. Due to this fact, sales commissions should not be considered an expense. The compensation to retain the best talent helps accelerate the productivity of the retail business store. In this blog, we learned,  

  • Offering competitive commissions motivates employees to sell more, leading to higher profits. 
  • Common models include straight commission, base salary plus commission, tiered commission, pool commission plans, and residual commission. 
  • Choosing the right structure depends on factors like product type, sales cycle, and business goals.

Preguntas frecuentes

What is a typical commission for retail sales? 

A typical commission for retail sales ranges from 5% to 30% depending on the type of product and sales structure. 

What is a reasonable commission rate? 

A reasonable commission rate is usually between 10% and 20% for most retail products, though it can vary. 

How much commission does a salesperson earn if they get 25% of a $30,000 car? 

The salesperson would earn $7,500 (25% of $30,000).

Do retail workers get commission? 

Yes, many retail workers do earn commission, especially in industries like car sales, furniture, and high-end retail.

What is the normal commission in retail? 

The normal commission in retail is typically between 5% and 10%, although it can be higher in certain sectors like luxury goods or automotive sales. 

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