What is the industry standard commission rate on ERP sales?

Question
From: James Crowe

I am currently researching commission rates on ERP sales. I am curious as to whether commission rates on high ticket ERP systems follow the general market rate of 15-20%, or whether these rates are reduced due to the large sums of money being exchanged in these deals. Any help is much appreciated.

Answer
From: Dave Savard

Commission rates vary by company and commission plans that they have implemented with their sales reps. Some companies have higher paid reps and lower rates of commission on sales, while others may have very low paid reps and the reward is higher commissions on sales - sometimes 15% to 20% of software license value. The commission rates typically vary on the type of services sold. Commission on data conversion and training may be much lower that what is offered for license sales given the added costs to provide those services to0p a new client. As well, companies may have commission plans that include penalties where targets are not reached in specific sales periods. A rep may earn a large commission on one sale but missed their goal for the period. That commission payment may be reduced. Sales commission plans can be very complex. Earnings for successful reps can be very high and waning reps very low relative to their peers in the industry. You need to show results and keep up that pace to be a successful sales rep in the software industry.

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Tom Feltham

About the author…

Tom Feltham was Editor at ERP Focus for three years from 2013-2016. Tom still keeps tabs on the ERP software market and occasionally puts pen to paper when inspiration strikes.

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Tom Feltham

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