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If your sales representatives help to determine the customers’ pricing, instead of paying them a percentage of sales, try paying a percentage of the gross profit. If you want to increase your overall profit margin, and the sales staff are in a position to affect pricing, reward those sales personnel with a cut from the gross profit. Pay them frequently and tie it to their overall profit margin dollars. You may want to add a caveat of a minimum profit margin and an incrementally higher percent payoff in the bonus awarded every month. Unless you do not allow them to set or seek out price increases, pay them against gross profit which motivates them to look for price increase opportunities.
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