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How to design a commission table?

operations cases
Neue Antwort am 12. Jan. 2021
3 Antworten
967 Views
Dan fragte am 10. Jan. 2021
Looking to practice TMT cases (primarily telecom)

Hello.

I'm thinking about a business problem. Could you please help a bit?

Say we are a curated well-established B2C marketplace. What are the key factors that would define our commission collected from partners' orders on the marketplace?

I would think about rewarding (with lower commission) the partners with:

  • larger gross merchandise volume
  • more extensive product range
  • larger geography of sales (in terms of countries)
  • partners who use our additional services to promote their products on our marketplace

Cheers!

(editiert)

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Ian
Experte
Content Creator
antwortete am 11. Jan. 2021
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate

Hi Dan,

Fundamentally, you have to say:

a) What matters (to our business)

b) What commission strructures change behavior to impact what matters

We need to determine the above before going any further! Then, the scale needs to also incentivize and "stretch" sales

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Vlad
Experte
antwortete am 10. Jan. 2021
McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School

Hi,

The most common issue with the marketplace is the lack of supply.

Thus, you should incentivize the supply to accept certain orders by lowering commissions / increasing pricing for customers

Best

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Clara
Experte
Content Creator
antwortete am 12. Jan. 2021
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut

Hello!

On top of what has been shared beofre, I would advise you to look at retail and ecommerce cases. If you don´t have any, feel free to PM and I will share with you

Hope it helps!

Cheers,

Clara

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Ian

Content Creator
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate
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