Q: How do I build a tiered commission structure from scratch?

Q: How do I build a tiered commission structure from scratch?

Tiers reward volume, but a bad ladder either pays for nothing or never triggers. Build it backwards:

— Start from your margin. Know the absolute max commission you can pay on a sale and still profit. Your top tier lives below that line.
— Set the base tier where most partners will sit, around your current default rate.
— Place the next rung just above where your better partners already perform, so it's reachable but earned. If good partners do 20 sales a month, set tier two at 25.
— Measure on a rolling 30-day window, not lifetime, so partners stay motivated to keep producing.
— Make the jump meaningful. A 2-point bump nobody chases; 5 points moves behavior.

The caveat: never reset everyone to zero at month-end without warning. Sudden downgrades feel like a pay cut and partners leave. Grandfather active producers for a grace period before any tier drops.

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