My answer to How common is it for sales people to receive commission based on the profit from their sales, rather t…
Answer by Jeannette Marshall:
It is not uncommon for the to be sliding scale depending upon the profitability of the sales.
“Cost of sales” varies from company to company and is not just the commission paid out to the sales rep. Cost of sales can include upfront costs to get a sale – car allowance, expenses for entertainment, marketing tools, etc.
Whenever this topic comes up on a prospective sales opportunity, one should be asking what “tools” will be provided. Car allowances and entertainment expenses can be offset by higher commission percentage, that the sales rep can write off on their own taxes.
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