commission refers to a fee paid to a business or an individual for facilitating a sale or providing a service, often calculated as a percentage of the sale value.
Example: A manufacturing company produces specialized equipment and partners with various vendors to sell its products. One of its partners, a sales agency, secures a large order from a client. The manufacturing company, in turn, pays the agency a commission, which is a predetermined percentage of the sales price, as a reward for facilitating the sale. This scenario illustrates how commissions can incentivize partners to sell more and reach broader markets in a B2B context.
Understanding commission helps businesses align their sales strategies with their compensation models, encouraging growth and collaboration while managing costs effectively.
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