Compensation Benefits
Evaluate whether or not the compensation system at Collegiate Promotions is effective.
If a company wants to introduce a new product to market in a quick way, but has rigid funds they have the option of utilizing an independent sales representative model. This allows a company to use representatives in their business to cut expenses and increase sales over the phone or enter into new markets or territories. Companies use representatives as direct sellers in order to show and eventually sell products in high amounts. Not only is direct selling an economical way to market and spread a good, but it can also help in the recruiting endeavor as well (How to Work With Independent Sales Reps, 2011).
The compensation system at Collegiate Promotions is effective for them since it keeps their cost low and yet allows for them to sell a lot of their products. They don't have to expense out a lot of money for training and/or brick and mortar sales office. Each representative pays for their own materials in order to get started and then is responsible for selling the products by way of whatever channel they chose. The compensation that each rep gets is completely dependent on how many sales they make. So the more product that they sell the more money they make and thus the more money that Collegiate Promotions makes in the end.
2. Discuss why a sales representative would try to sell at the top of the price range? Why at the bottom of the price...
Collegiate Promotions Evaluate whether or not the compensation system at Collegiate Promotions is effective. At Collegiate Promotions, independent sales representatives have a great deal of autonomy. They have freedom to work when and where they choose and the ability to structure their own pricing within guidelines provided by the company. It is a very effective compensation system for the company, since sales representatives pay an initial $300 fee for start-up materials. Sales
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