The Ultimate Guide to Understanding 80/20 Commission Splits

Are you tired of feeling like you’re not getting paid enough for your hard work? Do you feel like you’re putting in all the effort, but not seeing the results in your paycheck? If so, it might be time to consider an 80/20 commission split.

An 80/20 commission split is a compensation structure that rewards salespeople for their hard work and dedication. The basic idea is that 80% of the commission is paid to the salesperson, while 20% goes to the company. This structure incentivizes salespeople to work harder and sell more, because the more they sell, the more money they make.

But, what exactly is a commission split and how does it work? Let’s dive in and find out.

What is a Commission Split?

A commission split is a way of compensating salespeople for their efforts. Instead of paying a salary, salespeople are paid a percentage of the sales they make. The commission split determines how much of the sale goes to the salesperson and how much goes to the company.

For example, if a salesperson makes a sale worth $100, and they have a 50/50 commission split, they would receive $50 and the company would receive $50. If the same salesperson had an 80/20 commission split, they would receive $80 and the company would receive $20.

Why Choose an 80/20 Commission Split?

There are many reasons why a company might choose to offer an 80/20 commission split. Here are just a few:

• Encourages salespeople to work harder: When salespeople know that the more they sell, the more money they make, they are more likely to work harder and sell more. This can lead to increased sales and revenue for the company.
• Rewards top performers: The 80/20 commission split rewards salespeople who are the top performers. This can help to motivate and retain the best salespeople, and attract new top performers to the company.
• Fosters a competitive environment: The 80/20 commission split creates a competitive environment where salespeople are motivated to sell more and work harder. This can lead to increased sales and revenue for the company.

So, if you’re looking for a way to increase sales and motivate your sales team, an 80/20 commission split might be the perfect solution.

How to Make the Most of an 80/20 Commission Split

If you’re a salesperson, there are a few things you can do to make the most of an 80/20 commission split:

• Set sales goals: Setting sales goals can help you stay focused and motivated. Make sure your goals are realistic and achievable, and track your progress towards meeting them.
• Develop a sales strategy: Developing a sales strategy can help you sell more effectively. This might include identifying your target market, researching your competition, and developing a sales pitch that appeals to your target market.
• Build relationships with clients: Building relationships with clients can help you sell more effectively. Make sure you understand their needs and are able to provide them with the solutions they are looking for.
• Continuously improve: Continuously improving your skills and knowledge can help you sell more effectively. Attend sales training courses, read sales books, and seek feedback from your colleagues and manager.

By following these tips, you can make the most of an 80/20 commission split and increase your earnings.

The Bottom Line

An 80/20 commission split is a great way to motivate and reward salespeople for their hard work and dedication. It encourages salespeople to work harder, rewards top performers, and fosters a competitive environment. If you’re a salesperson, you can make the most of an 80/20 commission split by setting sales goals, developing a sales strategy, building relationships with clients, and continuously improving your skills and knowledge.

So, if you’re tired of feeling like you’re not getting paid enough for your hard work, consider an 80/20 commission split. With the right approach, you can increase your earnings and achieve your sales goals.