Commission
How Commission is Calculated
3min
When an order comes into Velocity, there are four things that are used to calculate the commission.
- Each line item on the order
- The category or categories that each line item belongs to
- The zip code for the order
- The commission strategy for each category
The basic commission calculation flow looks something like this:
- The order comes in
- Gather zip code and category information
- Zip code:
- If it is a digital order, we use the billing address zip code
- If it is a physical order, we use the shipping address zip code
- Category:
- Get the categories that each line item applies to
- For each category, determine the sales rep responsible based on the zip code ownership from the alignment
- This is the lowest level rep
- Calculate the commission based on the category's commission strategy
- This first determines the total commissionable amount
- This will then calculate the commission for the lowest level rep
- If that rep has a manager, calculate their commission
- Repeat until commission for all rep levels have been calculated
Each category is assigned a commission strategy that is used to calculate commission.
- Percentage - the commission paid out at each level is a fixed percentage of the commissionable amount.
- Customer Group Percentage - the commission paid out at each level depends on which group the customer belongs to.
- Base Price Commission - commission is calculated based on the total amount paid for an item relative to a configured base price.