We’ve worked with legal experts and proofreaders to create a commission agreement form that you can use time and time again as you scale up your salesforce.
We’ve worked with legal experts and proofreaders to create a commission agreement form that you can use time and time again as you scale up your salesforce.
What’s in this template?Commission is a type of variable remuneration based on the level of performance from an individual or business. It’s where a company (principal) will reward a salesperson (agent) with a commission fee based on the amount of revenue they generate.
For example, a sales agent may make a 10% commission of the total revenue they generate beyond the first $1000 in one calendar month.
Commission structures are commonly found in sales fields, including real estate, financial services, mortgage brokerage, and consumer goods.
A commission agreement is a formal contract between an agent and a principal to capture the terms and conditions of revenue share to suit all parties involved.
DISCLAIMER: We are not lawyers or a law firm and we do not provide legal, business or tax advice. We recommend you consult a lawyer or other appropriate professional before using any templates or agreements from this website.
Having a solid commission agreement template will help you get away from doing tedious paperwork, and spend more time developing a successful sales team.
Your commission contract is also a powerful business document that challenges you to get clear on the most beneficial commission structure for agents and your company.
Click below to access a copy of our commission agreement sampleOne of the most challenging parts of growing a successful sales team is developing a culture of high performance and loyalty.
How do you help you keep your average performers engaged in making more sales? And how do you keep your best performers from leaving your company to join a competitor or starting their own agency? It’s quite a dilemma for principals around the world.
The first step to safeguarding your practice is to nail your commission contract with prospective sales talents.
Having an airtight sales commission agreement keeps all parties honest to the commitments they’ve made to each other, thus mitigating the risk of stealing clients, under-the-table deals, and lack of motivation.
Depending on the size and turnover of your sales team, your commission agreement template may be one of your most-used formal documents.
You want to ensure you’re using a commission agreement when you bring on a new sales representative, promote an associate to a sales agent, or in any situation where you may pay a stakeholder in the form of a revenue share.
Put it this way, if you work out some commission split in any of your business-related dealings, be sure to pull out your commission agreement, so you’re covered, and everything is above board.
Having a solid commission agreement template will help you get away from doing tedious paperwork, and spend more time developing a successful sales team.
Your commission contract is also a powerful business document that challenges you to get clear on the most beneficial commission structure for agents and your company.
Click below to access a copy of our commission agreement sampleYou need to be incredibly intentional in integrating commission agreements into your business successfully. Below are some best practices we’ve identified when using commission contracts.
When presenting commission agreements, it’s always best to do it face-to-face, whether it’s in person or virtually. Connecting with agents on this level is essential to ensure they’re comfortable with the terms laid out in your agreement.
It also allows you to develop a professional relationship where there are clear boundaries for how your company operates. Without this meeting, prospective agents may sign your agreement without doing their due diligence, causing confusion, and sometimes conflict down the line.
So do the work of getting face-to-face and take it a step further to get the agents’ consent for each term, so there is no confusion with expectations as you move forward in your relationship.
The most important part of your commission agreement is your commission rate. How you determine your revenue share with agents is entirely based on how you want to run your business.
However, the more specific you can be in your fee structure, the clearer your agreement. Agents and principals alike can start to plan around a commission rate motivating all parties to grow the business.
Vague or overly complicated commission structures often create confusion and thus are not as motivating for agents.
When presenting your commission contract to potential agents, take the time to explain why you’ve structured the agreement the way you have.
For example, if you have a restriction on what geographical areas an agent can make sales, explain why that’s important. Be open about how your business makes revenue and how it’s able to sustain itself.
Being transparent upfront will help you to build trust with the best talent quickly and also help you to get valuable feedback and develop the most optimum terms over time.
