What is Commission?

A definition of Commission

“A commission is a fee paid to an employee or agent for a transaction or sale they facilitated. It serves as a performance incentive to increase sales and productivity.”

Commission in Business Glossary - What is a Commission?

Business Glossary > What is Commission?


Examples of Commission in a Sentence:

He earns a commission for every car he sells.

The sales team works on a commission basis.

She was thrilled about her commission after closing the deal.

Why is Commission Important in Business?

Understanding commissions is essential for businesses as they motivate employees to increase sales. Structuring commission systems correctly can lead to higher productivity and enhance company revenue.

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Associated Terms

Here are some associated business terms and synonyms for “Commission”:

  • Brokerage Fee
  • Sales Incentive
  • Performance Bonus

Real Estate Commission

In real estate, agents typically earn a commission for each property sale. For example, if a house sells for $300,000 and the commission rate is 6%, the agent would earn $18,000.

Final Notes on Commission

When structuring commission plans, consider the following:

  • The fairness of the commission rate
  • The alignment with company goals
  • The impact on employee motivation

These factors can help establish a successful commission strategy.


This has been a definition of Commission meaning.

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