A manufacturer of prosthetic devices has decided to review his company’s sales c

Question

A manufacturer of prosthetic devices has decided to review his company’s sales compensation system. Historically, salespeople were paid on straight salary. While the company has grown in recent years, the president is convinced that the sales force could generate more sales volume. A major part of the sales job is missionary, yet with the increasing number of physician groups expanding into rehabilitation medicine, a new target market is possible. The manufacturer is also convinced that not all the products in the line have the same margin.

What form of compensation would you recommend?

Explanation / Answer

Ans: I would prescribe a commission arrangement, in which the sales representative is paid in view of offers execution regarding volume, net income, or edge. The benefit of this arrangement is that the sales representative is unmistakably centered around the business errand. It additionally has the benefit of value in that great entertainers are remunerated more very than the individuals who are less capable. The commission pay arranges fluctuate specifically with the association's income, permitting the firm an implicit cost advantage. Commission have a few restrictions, one major that the sales representative concentrates too intensely on the business errands alone; and non deals exercises and preacher capacities may not get justified consideration in the transient as the businessperson tries to boost wage.

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.