Salespeople Work Commission Company Sell Sales Price People

Many salespeople work on commissions. This is because the "payment arrangement" (the way people are paid) "aligns" (makes things work together in the same direction or for the same purpose) the interests of the company and the salespeople, so that everyone tries to sell as much as possible.

Salespeople sometimes earn commission as a "flat fee" (an unchanging amount) for each sale they make. When salespeople are able to "negotiate" (reach agreements on) the sales price with their customers, they often earn a commission as a percentage of their total sales, so that they have an "incentive" (a reason to do something) to negotiate a higher sales price and help the company increase its profits. Percentage-based commissions are used with people who sell cars, for example.

"Real estate professionals" (people who help individuals buy and sell homes) work on commission, usually receiving around 2-3% of the sales price of a home. "Insurance brokers" (people who help individuals find the best insurance policies) and "mortgage brokers" (people who help individuals find the best loan to buy a home) also work on commission, receiving a percentage of the amount that their customers pay to the insurance company or "lender" (a business that makes loans).

Commission-based payment arrangements work well, because the salespeople have an incentive to work hard. However, they can also encourage dishonest or "fraudulent" (breaking the law through dishonesty and deception) practices, like when salespeople lie to customers about their products in order to "make the sale" (persuade someone to buy something). For that reason, companies sometimes make the commissions "contingent upon" (dependent on) customer satisfaction, so that the salespeople do not receive their commission if the customer complains or tries to return the product.