Is It All About the Commission Split?

I love making money.  I really do.  And I love this industry because not only can I make money on my own sales, but I can make money on other people’s sales. I literally make money in my sleep!

Even though I am very proud of this income model I have built, today I want to talk about commission splits.  You see not only am I making money, I know HOW I am making it.  Do you?

Most of us in this industry earn our income based on the gross profit margins of each sale we make and the percentage of that gross profit dollar margin we keep.  Right?  I’m guessing that’s how you get paid.

Let’s review a sample sale together so we are clear on the terms I am talking about.

Scenario:  You make a $1000 sale of water bottles.  Your sales margin is 40%.  You currently get a 50% commission split of the gross profit dollars earned:

$1000                    Sale Amount

40%                        Gross Margin (what you sell these water bottles for)

$400                       Gross Profit Dollars ($1000 sale - $600 of Cost of the Water Bottles)

$200                       Your Commission Split (50% of the $400 Gross Profit Dollars)

I’m hoping we are now speaking the same language.

So, back to my question … Is It All about the Commission Split?  I am not here to tell you the split doesn’t matter because of course it matters.  Rather I am suggesting that you focus on something that very well may matter way more … the total gross profit dollar volume.

Let me say it again … FOCUS ON THE TOTAL GROSS PROFIT DOLLAR VOLUME.  Stick with me …

The problem with our industry is the hyper focus on this percentage commission split and the lack of focus on increasing the total gross profit dollars.  And yet it’s focus on the total gross profit dollar volume that will increase your personal income. 

If you are not focused on this, then you need to be.  Because this is HOW you make money.  It’s this number I would argue that you should be hyper focused on.  Why?  Because it’s how you get paid!

And just how do you go about increasing the total gross profit dollar volume on your own sales? Check out my blog for the Top 10 Ways I Focus on Increasing my Total Gross Profit Dollar Volume. In the meantime, feel free to contact me at josh@swagcoach.com to learn more about the benefits of The Swag Coach® Program.