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Software Sales Commission Structure

  • August 21, 2007 9:59 AM EDT

    To PL`s advice, I`d also add that oftentimes it`s best to offer a tiered commission structure. We typically offer a realtively low base salary, then offer a different percentage for each tier.

    For example, a $25 k base, then 5% of the first dollar after $5k/mo in sales. The next tier may be10% of the first dollar over $30k/mo in sales, and so on. It`s a great incentive to reach those high numbers!

    • 99 posts
    August 14, 2007 7:46 AM EDT
    I`ve spent many years as an in-house attorney for large software companies, and now represent many of them as part of my private practice.  I can tell you that the commission structures vary widely (anywhere between 3% to 250%).

    Some of the criteria that are used to formulate the structure include:
    • type of account (major or smaller customer)
    • whether support services will also be sold, and if so, whether they are charged on a recurring, annual basis
    • the date of the sale during the company`s fiscal year (during certain slower fiscal quarters, there are "kickers" for selling during those times
    • the amount of discount taken from the "list" price
    • how much will be fixed salary versus commission
    • quota size

    ---

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    • 1 posts
    May 3, 2010 10:53 AM EDT

    Hello

    Are there any sales commission software which calculates different tires of sales commission for different executives, leaders  based on their post and heirarchy?

    • 26 posts
    April 19, 2011 9:09 PM EDT

    R you want  to purchase software for your business  or for any other purpose then  must purchase with it software for wholesalers because they gives you extra facility.

    • 5 posts
    August 13, 2007 8:38 PM EDT

    For the past year my company has been developing an enterprise software product for Arts and Entertainment Industry. We are at the point where I would like to bring on a sales rep (or two) to focus on software sales.My question is: what are typical sales commission structures in the software industry? And what are the common percentages that commissions are paid on?

    -Thanks in advance for your help!

    • 5 posts
    August 15, 2007 11:51 AM EDT

    Thanks pepperlegal! Those are great criteria to consider.