Commission structure for a product with a low average sale price and limited opportunity for larger leads?

Hi - I work in HR and have lots of experience designing and implementing commission schemes for a range of sales roles.

Happy to support with some more information - to determine the best commission structure you need to be clear on what behaviour or result you want to motivate, and also take into account financially how the scheme can 'pay for itself'. For example, by rewarding number (volume) of sales, or total revenue, but ignoring profit, the individual will understandably focus on revenue or volume, and profit may suffer.

Feel free to reach out to me direct if you'd like to explore further to reach the right solution.

You might find resources such as People Management (online) useful for further reading.

Katie

There are many publications, articles, and books on this subject. I feel I would be doing you a disservice recommending any without more detailed knowledge of your business model.

The one thing I can say and its the best advice I ever got when paying commercial folks and I live by it now, "You get what you incentivize." Often in sales we unconsciously incentivize activity. Activity doesn't mean results.

I am not certain the size of your sales team but take a look at Price's Law. Price's law says that 50% of the work is done by the square root of the total number of people who participate in the work. For thirty years this has been nearly a science. Keep that in mind when creating an incentive plan. I also keep this in mind when creating teams. 4 is a magic number. 2 people do 50% of the work and the other two do 50% of the work.

I have created many comp plans. I have seen some that work amazingly and if you have done this long enough some that you look back and think what was I thinking. It's nice to have lived long enough to make mistake to learn from. If someone tells you that they haven't either they are lying or their mistakes are coming soon.

Feel free to give me a call if you wish to brainstorm or develop a plan for growth.

Make it a great day!

David

My answer will:
1️⃣ Give you a simple framework for low-ticket commission plans
2️⃣ Explain what actually works when high volume is your only real lever
3️⃣ Point out what others missed or didn’t make actionable

✅ TL;DR (Too Long; Didn’t Read)
For products with low average revenue per user (ARPU) and limited upsell potential, your commission structure must:
✅ Be volume-based
✅ Trigger early (small wins, fast payouts)
✅ Include team-level incentives to support scale

❌ Avoid deep customizations or complex tiers — they confuse reps and kill speed

Start with:
💵 Flat $ per sale + 🎯 milestone bonuses for consistent closers
It’s predictable, motivating, and affordable — and scales better when leads are abundant but small in value.

🧠 Full Answer
Here’s how to think through a commission plan that actually works in your case:

1. When ARPU is Low, Volume is King
If each sale nets you $20–$200, forget classic “10% commission” models — they:
Feel tiny
Don’t excite reps
Create friction between marketing, support, and sales

✅ Instead, offer a flat fee per sale
E.g. “Every converted lead = $10–$50 payout,” depending on margin

2. Keep It Simple. Sales Shouldn’t Do Math
Make sure a rep always knows:
How much they’ll earn per sale
How close they are to the next tier or bonus
What behavior is rewarded (calls? closes? referrals?)
If you make them guess, they check out mentally — or worse, game the system.

3. Use Milestone Bonuses to Drive Consistency
You don’t need to pay more per deal — just add bonuses at volume checkpoints:
50 sales this month = $250 bonus
100 sales this month = $700 bonus
5+ days in a row with 5+ sales = $100 consistency bonus
This motivates daily performance and long-term discipline.

4. Don’t Forget Team Incentives
When margins are tight and sales volume is high, shared bonuses for team wins are powerful:
Whole team hits 1,000 sales = everyone gets $150
Highest team NPS = lunch, day off, or light bonus
Helps with morale, avoids burnout, and encourages peer accountability.

🔍 What Others Missed or Said Vaguely
❌ “Think about what behavior you want to incentivize” – True, but not useful unless it connects to how reps get paid. Most reps care about what gets them paid now.

❌ “Price’s Law and group dynamics” – Interesting but not actionable for designing your first commission model.
✅ One answer nailed it: “You get what you incentivize.” We took that principle and turned it into a plan.

🧭 Final Word
✅ For low-ARPU, high-lead businesses:
Use flat $ payouts per sale
Add tiered bonuses for momentum
Keep payout frequent and easy to track
Layer in team rewards for retention and culture

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If you want help modeling the numbers for your product and margins, I’m happy to hop on a call and map it out.