the startups.com platform about startups.comCheck out the new Startups.com - A Comprehensive Startup University
Education
Planning
Mentors
Funding
Customers
Assistants
Clarity
Categories
Business
Sales & Marketing
Funding
Product & Design
Technology
Skills & Management
Industries
Other
Business
Career Advice
Branding
Financial Consulting
Customer Engagement
Strategy
Sectors
Getting Started
Human Resources
Business Development
Legal
Other
Sales & Marketing
Social Media Marketing
Search Engine Optimization
Public Relations
Branding
Publishing
Inbound Marketing
Email Marketing
Copywriting
Growth Strategy
Search Engine Marketing
Sales & Lead Generation
Advertising
Other
Funding
Crowdfunding
Kickstarter
Venture Capital
Finance
Bootstrapping
Nonprofit
Other
Product & Design
Identity
User Experience
Lean Startup
Product Management
Metrics & Analytics
Other
Technology
WordPress
Software Development
Mobile
Ruby
CRM
Innovation
Cloud
Other
Skills & Management
Productivity
Entrepreneurship
Public Speaking
Leadership
Coaching
Other
Industries
SaaS
E-commerce
Education
Real Estate
Restaurant & Retail
Marketplaces
Nonprofit
Other
Dashboard
Browse Search
Answers
Calls
Inbox
Sign Up Log In

Loading...

Share Answer

Menu
Commissioning: Commission structure for a product with a low average sale price and limited opportunity for larger leads?
LK
LK
Lyubim Kogan, I don’t teach theory. Only what I survived. answered:

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

Was this helpful? If yes, an upvote is appreciated.
If you want help modeling the numbers for your product and margins, I’m happy to hop on a call and map it out.

Talk to Lyubim Upvote • Share
•••
Share Report

Answer URL

Share Question

  • Share on Twitter
  • Share on LinkedIn
  • Share on Facebook
  • Share on Google+
  • Share by email
About
  • How it Works
  • Success Stories
Experts
  • Become an Expert
  • Find an Expert
Answers
  • Ask a Question
  • Recent Answers
Support
  • Help
  • Terms of Service
Follow

the startups.com platform

Startups Education
Startup Planning
Access Mentors
Secure Funding
Reach Customers
Virtual Assistants

Copyright © 2025 Startups.com. All rights reserved.