Commission Sales Agreement Generator

What is a Commission Sales Agreement?

A Commission Sales Agreement is a legal contract between a company and a salesperson or sales agent that outlines the terms and conditions for selling products or services on a commission basis. The agreement defines the commission structure, sales territory, performance expectations, payment terms, and other key aspects of the commission-based sales relationship.

Key Sections Typically Included:

• Parties Identification
• Appointment and Authority
• Products or Services Covered
• Sales Territory or Market
• Exclusivity Terms
• Commission Structure and Rates
• Commission Calculation Method
• Performance Quotas or Targets
• Payment Schedule and Terms
• Expense Reimbursement Policy
• Sales Reporting Requirements
• Lead Generation and Management
• Customer Relationship Ownership
• Intellectual Property Usage
• Term and Termination
• Post-Termination Commissions

Why Use Our Generator?

Our Commission Sales Agreement generator helps you create a comprehensive document that clearly establishes the parameters of your commission-based sales relationship. By defining commission structures, sales territories, performance expectations, and payment terms upfront, both the company and the salesperson can focus on generating revenue with clear incentives and boundaries.

Frequently Asked Questions

• Q: How should commission structures be designed?
  • A: The agreement should clearly define the commission calculation method (percentage of sales value, gross margin, or fixed amount per unit), tiered commission structures based on volume or revenue thresholds, accelerators for exceeding targets, special rates for new versus repeat customers, and whether different products carry different rates. It should specify what constitutes a "sale" (order placement, delivery, payment receipt) and how returns, cancellations, or defaults affect commission payments.
• Q: How should sales territories be defined?
  • A: The territory definition should be specific and unambiguous, whether based on geographic boundaries, customer segments, industries, or named accounts. The agreement should address whether the territory is exclusive or non-exclusive, how leads outside the territory are handled, circumstances under which territory boundaries may be adjusted, and compensation for territory reduction. It should also specify how to handle customers who operate in multiple territories.
• Q: When are post-termination commissions payable?
  • A: The agreement should clearly state whether the salesperson is entitled to commissions on orders placed after termination if they originated the customer relationship or worked on the deal pre-termination. It should specify the time period during which post-termination commissions will be paid (often called a "pipeline period"), qualification criteria for such commissions, and how the commission rate may differ from during-employment rates. The contract should also address commissions on renewals, reorders, or expanded business from existing customers.