Split commission

Related terms

Commission

Commission is the percentage of invoiced sales a principal pays a manufacturers' representative for business the rep develops and services in a territory. Rates vary by industry, product, and deal size. Commission is usually paid monthly or quarterly after the customer pays the principal.

Territory

A territory is the geographic area, customer list, or market a manufacturers' representative is contracted to cover for a principal. Commission is typically paid on orders shipped to or placed from the territory. Clear territory lines prevent split-commission disputes.

Manufacturers' representative

A manufacturers' representative is an independent sales firm that sells for several noncompeting manufacturers, called principals, in a defined territory and is paid commission on sales. The rep finds programs, manages RFQs, and handles communication between buyer and plant. The principal pays the rep, not the buyer.