How do you work out commission structures?

Make sure you paying it from profits and not from capital. Also, know your break even point in the business and depending on your business and what you do, ie if there is a basic salary a staff member receives then it would make sense to only start paying a commission once break even has been reached. If not, just focus on paying from profits.

The short answer is "however you want". Commissions are payed either on gross profit, net profit, or gross sales. A percentage is derived based on what the employer feels will be enough to hire and retain qualified salespeople.

Whatever structure you decide on, it is important that it be clearly communicated from month to month for each sales rep. A handful of free tools are available online to do this. The one I most recently found (see Related Links below to view website) happens happens to be paid ($20) month.

In summary, whatever plan you choose, make sure it is well thought out and meets all your criteria. Seeking advice on a site like this is also a great start!

I remember when I was doing research on dating websites, I noticed that all of them like match or dream marriage have very interesting commission structure that is based on the amount of sales. I guess advertiser who attracted the most clients receives the highest commissions.