Calculating Commissions When Including Free Gifts with Purchase

Brandon Lewis

How would sales commissions be calculated if a dealer includes a $500 television with the purchase of a used car?


Let’s say the profit on the car is $2,000 and the salesman gets 25%. Is the salesman’s commission calculated after subtracting the $500 cost of the television? Would the commission be 25% of $1,500 instead of 25% of $2,000?

Ricky Patrick

I would imagine it would be calculated just like any "We Owe" or Due Bill. The TV is included in the cost of the vehicle.

Chris K Leslie

Yeah, you don't want to mess how people are paid. if you remove the cost of the tv from the available commision. The sales team will feel like they are paying for the TV. Which in essence they would be.. 

mark rask

Chris is right....The quickest way to demotivate a salesperson is to mess with pay

Brandon Lewis

Thanks everyone. Would it work the same way if we worked with a marketing firm and they charged $500 per vehicle they helped us sell? Do we just add that to the cost of the vehicle?

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