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Good point Bob. I will definitely put it towards the agents now. Just wanted to be sure first that I was on the right track with breaking down the commission fairly. Thanks for your help.
Hi Bob,
Thank you for your help.
Yes the tiered commission structure is known by all employees and it is based on performance, dependant on total commission generated by each agent.
So, if I'm right in thinking I can also work it out like this;
Total Commission generated = 100,000
Because there are 2 agents involved in the deal plus the company, let's split that in two for the agents, 50,000 and 50,000
Agent 1 on 70% commission of 50,000 = 35,000, leaves company with 15,000 from the share
Agent 2 on 50% commission of 50,000 = 25,000 leaves company with 25,000 from the share
Company walks away with 40,000 in total which to me seems unfair because if agent 1 were to do the deal on their own they would have got 70,000 and company would have got 30,000. Again, if agent 2 were do the deal on their own they would have had 50,000 and company would have had 50,000.
In this instance I shared above, the company walks away better than both agents but I guess this is only an issue when multiple agents are involved and agents should be prepared to cut their losses to make a deal, rather than lose it entirely by trying to maximise their commission potential finding a deal on their own.
Please give me your honest opinion whether you believe this is the most straight forward/fairest way to break it down? If not, can you suggest something else?
Hello everyone,
Appreciate your time in helping me out with this. I have a business where employees earn extra on a tiered commission basis. Would love your help in explaining something to me so that it doesn't become a problem in the future when I try to calculate it;
So, Agent 1 always earns 70% split on commission with the company. With $100,000 for example, that would mean Agent 1 earns $70,000 and the company earns $30,000
Agent 2 always earns 50% split on commission with the company. With $100,000 for example, that would mean Agent 2 earns $50,000 and the company earns $50,000
Simple so far, right?
However, Agent 1 and Agent 2 have done a deal together and that's where I'm lost trying to figure out the best situation to do a fair split. So on $100,000 commission what would be the best/fairest way to split between 3 people, given the circumstances above?
My brain is turning to mush trying to figure this one out...
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