Commission - earnings of active people

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Commission is the payment for the work of an intermediary (person or company) for the provision of services or support of a transaction/transactions on behalf of another person and at his expense.

The services of intermediaries are often used by firms seeking to increase their turnover. Therefore, the commission is most often calculated as a percentage of the turnover achieved by the intermediary. It can take many forms.

Commission is often applied in a linear form: the higher the turnover or sales volume, the greater the amount received by the intermediary. In this form, the payment for work is easily calculated, additional forms of encouragement can be applied in parallel, but there are also disadvantages in it. For example, with a very high level of turnover achieved by an intermediary, his earnings may be higher than that of the head of the firm-guarantor. Naturally, in this case, tensions in relations in the team may arise. In addition, the high earnings of the intermediary may reduce his interest in applying additional efforts to increaseturnover/sales volume.

In Western countries, degressive commissions are often used, when the percentage of turnover allocated to the remuneration of an intermediary decreases with an increase in sales / turnover. In this case, the correct calculation of the change in the percentage of remuneration is very important, which would take into account both the interests of the guarantor company and the contractor, otherwise he will not be interested in the growth of turnover/sales.

Commission in a progressive form, when the percentage of the amount of remuneration increases with an increase in sales / turnover, is often used when selling goods or services that are not in high demand. This form effectively stimulates intermediaries, but causes high costs for the sponsoring firm.

To speed up the sale of certain goods or services, firms often use a special form of commission - increased interest on transactions with these goods/services at a certain time period.

An example of speci alties in which remuneration is calculated precisely in the form of a commission is the work of an insurance agent - a person who officially represents an insurance company and draws up documents for personal or property insurance.

This job is suitable for active, energetic people who know how and love to communicate with people. Work as an insurance agent does not require special education, since each insurance company itself trains its employees at different levels (initial,with experience as an insurer, group managers). For the work of an insurance agent, such components of activity as professional ethics, service culture, knowledge of the rules and conditions of all types of insurance provided by the company, the ability to keep records of their activities and reporting on them are important.

The duties of an insurance agent include advising clients on all types of services provided by the employing company, assistance in choosing a particular product in accordance with the needs of the consumer.