Mathematics and Statistics · Ch 18 — Commercial Mathematics
Commission and Brokerage
Commission and Brokerage
Businesses often sell through agents rather than directly. The agent is paid out of the value of the business transacted.
Commission and brokerage
- Commission — the remuneration paid to an agent/salesman for services (usually selling goods), computed as a percentage of the turnover (value of sales).
- Brokerage — the charge of a broker, a middleman who brings a buyer and seller together, computed as a percentage of the transaction value. A broker frequently charges both parties.
Slab (differential) commission
Many schemes pay a higher rate on sales above a threshold. Split the turnover into the slabs and apply each slab's rate separately, then add.
Net proceeds to the principal
When an agent sells goods on a principal's behalf, the principal receives the sales value minus the agent's commission (and any expenses):
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An agent's/salesman's pay, . May use different rates on different slabs of turnover (dif …
A broker's charge as a percentage of the transaction value; often levied on both the buyer …
What the principal actually receives: (less any expenses th …